Speaking at the Australian Legal Practice Management Association (ALPMA) conference on the Gold Coast last week, Blane Prescott of Hildebrandt International told the audience of legal professionals that turnover symptoms, such as excessive billable hours, haven’t changed in the last 20 years.

Most pointedly, he noted that money comes way down the list of associate complaints. As the worldwide boom in the legal profession continues to grow exponentially, and firms jostle for the most talented associates in the market, throwing money at employees will not make them stay, Prescott said.

“Law firms are realising that money doesn’t breed loyalty or happiness,” he said. “Many firms are increasing compensation, but [do not understand] how it fails to impact on retention.”

According to international research conducted by Prescott, there are seven top reasons why associates leave firms with high turnover rates, and money is not one of them.

Instead, reasons cited include insufficient training and contact with partners; lack of mentoring; inadequate career development opportunities; associates feeling that they are treated like ‘employees’; lack of understanding of where the firm is headed; partners who openly criticise each other and associates behind their backs; and a difference between the claimed and actual work ethic of a firm.

Prescott’s work in the US has shown that many firms there aren’t making money on their associates, even though they’re raising their salaries in an effort to keep them. Recognising this, some firms are planning to stop growing, Prescott said, and are continuing to make profits through more efficient work practices.

“Law firms tend to create their own crises,” Prescott said. “But any ‘crisis’ is created by firms’ fixation on emulating competitors, rather than communication, innovation and action.”

Some firms have turned to more progressive policies in an effort to retain talent. Similar to the approach of the NSW Crown Solicitor’s Office, recent NSW Law Society award winner (reported in Lawyers Weekly last week), US firms are allowing associates to leave for up to a year for rival firms.

“Re-recruiting is highly cost effective,” Prescott said. He explained that firms should welcome the benefits of having associates return from a stint at a competitor with news that the grass is not in fact greener on the other side.

According to Prescott, the firms with the lowest associate turnover rates are the ones that spend more time training their partners, so as to better delegate work, supervise and mentor their juniors. They also are the ones who invest a lot in delivering on time and honest evaluations, he said.

Prescott has worked with more than 1,000 law firms, as well as investment banks and venture capital firms in the United States, Canada, Asia and Europe. He rejoined Hildebrandt International in 2002, after having been a partner and a member of the executive committee for 12 years.