 A new paradigm required for assistant retentionSo the credit crunch has put the brakes on the private equity-backed transactional juggernaut. And law firms, like their asset-rich buyout clients, are now wrestling with the same conundrum – how to extract yet more profit from organisations that have already cut costs to the core, without the relentless deal flow that had previously allowed them to get by without the need for any real leadership innovation.The answer is, of course, a return to traditional talent management, something that all law firms continue to struggle with. While the trials and tribulations firms now endure to hang on to their top partners have been well documented here, the real battleground (if you strip out partner-haemorrhaging firms like Hammonds, Barlows et al) centres around assistant retention. As our annual survey (page 53) finds, the biggest firms are now losing 25% of their assistants each year. Once recruiter fees, partner time spent interviewing, integration and training costs are accounted for, the cost of an assistant resigning is close to an entire year’s salary for the departee. Factor in the price of the bumper pay and bonus round, secured at the very height of the buyout boom earlier this year, and it is not hard to see how slack talent management can strip millions off a firm’s bottom line. Even the ruthless attrition strategy favoured by the likes of talent-rich firms like Linklaters and Slaughter and May is now being modified as firms, sick of seeing even non-partnership candidates leave for investment banking clients, encourage them to stay for longer so that, according to Linklaters, they can learn extra skills and ‘they can then join the bank at a higher level’. But the fact remains: throwing money at assistants has failed to buy their loyalty. Alternatives to partnership are strongly desired by assistants, but not if they are simply a job title given to those not considered good enough. Firms are simply too reliant on a limited number of assistants to keep pushing the traditional ‘up or out’ philosophy, yet at the same time they are shrinking the equity just to boost PEP. So a new paradigm must be created. Trouble is, with the recruitment market failing to plug the gaps, not one of our revered UK law firms has yet worked out what it is. James Baxter, Editor |
