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The costs of law firm attrition

I was sitting here in the law library, preparing for my nonlinear dynamics final, when I realized I should have some kind of cover in case someone walked by and wondering what this undergrad might be doing in this place. So of course I pull up Anonymous Lawyer and through some very odd succession of hyperlinks ended up reading an interesting article by Calvert and Williams (2001) that mentioned, among other things, that it is very costly to replace attorneys who leave the firm. Specifically,
Law firms typically focus on revenue generation rather than bottom-line profitability.
For this reason, they may overlook the fact that they are losing millions of dollars to
high attrition. Replacing each attorney who leaves costs between $200,000 and
$500,000 – and this does not include the hidden costs of client dissatisfaction due to
turnover, lost business of clients who leave with departing attorneys, and damage to
the firm’s reputation and morale.
The footnote in the lexis article that led me to Williams and Calvert's article noted more specifically that the costs of associate attrition were generally highest, especially associates who left in their third or fourth year, right after the firm's investment in training was complete but before the associate had become net profitable.

A few thoughts: first, not having to pay the cost of training is obviously closely linked to the high signing bonuses that are given to associates with clerkship experience, etc. Second, a question: does the estimated cost of $200K-500K assume that the firm must hire a new fresh-out-of-law-school associate or does this cost germane to lateral transfers? Having only a minute academic knowledge of these dynamics, I'd hazard that in a closed market where law firms experience some level of attrition, the cost of attrition is mitigated by the ability to hire laterally, that is, associates whose experience is equal to or greater than the experience of the lost associate. So the attrition game is certainly a game that features non-negligible costs, but is primarily an exercise in optimal matching in which firms might be (and probably are, if we assume that associates look for matches better than their current firm) better off. Of course, relaxing the assumptions of that world makes things a bit more complicated, but I'll leave it at that.

The rest of the article is worth reading if you're interested; the authors do a nice job of debunking "conventional wisdom" regarding associate schedules and part time work in law firms.