Turnover: Your Secret Weapon for a Better Law Firm

When it comes to law firm turnover, there are two things you must know:

  • It’s higher than you think it is.
  • That doesn’t have to be a bad thing.

Let’s dive into the numbers first.

To determine the state of turnover in the legal profession, the data team at Decipher Investigative Intelligence examined every law firm in the AmLaw 200, charting lawyer hires and departures over the past four years. We then applied this equation:

(New Hires + Departing Lawyers) = Total Annual Volatility

Volatility/Headcount = Turnover

For example, in a given year, a law firm of 1,000 lawyers hired 100 lawyers and lost 100. Its total annual volatility is 200, for a turnover rate of 20 percent.

That number may seem high – but in fact, it’s lower than the averages.

Average Turnover by AmLaw Category

average turnover by AmLaw category






Among AmLaw 200 firms as a whole, over the past four years, the average turnover is 26.3 percent.

As few of us went to law school because we love math, let’s consider some of the context behind these numbers.

  • Visualizing the Average. With a cumulative average rate of 26 percent, for every four lawyers at your firm, one will swap out every year.
  • Highs and Lows. While the averages – aside from the anomaly of 2020 – consistently ranged in the 20s and 30s, over four years we saw a low of 5 percent (a very conservative firm in the AmLaw 151-200 quadrant), and a high of 86 percent (a now-defunct firm that shed most of its lawyers before its demise).
  • Arrivals and Departures. “Turnover” does not just mean people leaving the firm; as the equation above demonstrates, it also includes new faces – whether new hires, laterals or products of a merger or acquisition. Indeed, if a firm of 1,000 lost no one, but had a massive hiring spree of 300, it would still have a higher-than-average turnover rate of 30 percent. We use the word “volatility” purposefully; in a people-driven business, such as law, new arrivals can have just as much cultural impact as departures. (More on that in a moment.)

The Effects of High Turnover

To be sure, every departing lawyer brings cost to the organization; the average cost to replace a failed Am Law 100 partner is $2.3 million, to say nothing of the time and resources spent to train, onboard and integrate this individual.

But more attention needs to be paid to the cultural effects: What happens to your firm when the population flips every four years?

Again, it’s imperative to remember turnover comprises new arrivals as well as departures. There are risks on both sides of the coin: While it is hard on morale to see longtime colleagues or influential rainmakers leave, it is equally hard to adjust to multiple new faces (and new clients, work styles, and personalities).

Indeed, an influx of new faces can strain an ecosystem, even if they are positive, strategic cultural fits. What if they aren’t?

Last year, 29 percent of lateral attorney candidates screened by Decipher had a “red flag” in the due diligence process. This means that of the 5,382 partner moves that occurred in 2022, 1,560 brought baggage with them. And the most common category of red flag, covering 39 percent of candidates: “cultural fit or personality issues,” exceeding undisclosed business affiliations, financial irregularities, problematic social media content and more.

Given the risks inherent in a highly mobile talent pool, it’s not surprising that a survey of 500 business leaders in the United Kingdom found that two-thirds of businesses with high turnover experienced “negative effects on company culture.” Specifically:

  • 23 percent received complaints from remaining team members about a change in culture;
  • 23 percent have noticed the company drifting further from its stated mission and values;
  • 22 percent had issues arise between team members; and
  • 22 percent had long-standing employees leave as a direct result of the cultural change.

Turning the Page on Turnover

Let’s make 2023 the year that we take a different approach to turnover.

Let’s acknowledge that turnover is inevitable in a highly competitive, highly mobile profession.

And then let’s make it work for us: If you could change 26 percent of your law firm, what would that look like?

Start with this wish list, taking into account the characteristics of your ideal candidates:

  • Geography: Where are they?
  • Practice areas: What do they do? How do they complement what you do?
  • Client relationships: How do they drive your market share or protect existing work?
  • Succession planning: What skills, experience or relationships do you need to replace in the next five years?
  • Diversity: In what demographic groups is your firm underrepresented?
  • Cultural fit: What are the core values that we must share? What is the behavior we will not tolerate?

This is the foundation of your talent strategy. This is how you stop making bad bets on pop-up hires; this is how you stop paying exorbitant fees to headhunters whose incentives do not align with yours; and most of all, this is how you protect your culture – your one true differentiator.

In 2023, law firms must realize that their best opportunity to shape safe, healthy and high-performing cultures lies in talent strategy. When turnover averages over 25 percent, the most powerful way to build and protect a positive work environment is to be disciplined and discerning when it comes to who you bring on. There are no tote bags, remote work policies or well-meaning wellness initiatives that can make up for a rush of bullies, harassers or charlatans.

Decipher helps law firms grow more purposefully and profitably by eliminating lateral hire risk. We deploy industry-leading data to do this in three ways:

  • We turn talent strategies into reality by developing intelligence-driven talent acquisition playbooks for specific markets, practice areas and industry verticals.
  • We perform deep-dive pre-hire due diligence that verifies a lateral’s book of business, assesses their cultural fit, and identifies potential red flags…before they are hired.
  • We deliver bespoke data analytics projects that empower smart decision-making and identify competitive advantages.

To learn more, contact us today.

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