Attorney Turnover and Psycho Firms

Do you – or someone you love – work at a psychotic law firm?

If so, help is available.

We all know firms that are neurotic, dysfunctional or outright psycho. They are easy to spot.

The primary symptom – according to blogger Harrison Barnes at Law Crossing – is high attorney turnover:

“Psychotic law firms are generally small, but large law firms can go psychotic, too. [I]t is not fun to watch. Typically, law firms end up going psychotic because of managerial decisions regarding partner compensation. This is something that has driven hundreds of law firms over the edge and made them impossible places in which to work. What typically happens is that the partners with the most business—or even outside consultants—will make sweeping changes to the firm's compensation plan. This can cause anger, factions, and resentment to develop amongst the remaining partners. Such anger often causes the firm to implode.” 

Small law firms go psychotic, according to Barnes, when one or two of the partners no longer get along or when one gets involved in illegal activity. Large firms lose it when there is a breakdown in communication, resulting in constant turmoil and what he calls “nonsensical decision-making.”

The Costs of Attorney Turnover

All of this comes at a cost.

When attorneys leave, you lose the value of their experience. You lose your investment in their training. You spend money to get replacements up to speed. There are less quantifiable costs like staff disruption and poor morale.

But did you also know that excessive turnover increases your risk of getting sued for malpractice?

And it might even cause your insurance premiums to go up.

Consider this article from Attorneys Liability Protection Society:

“Legal professional liability insurance underwriters look at the rate of attorney turnover at firms they are considering underwriting because a higher than normal rate of turnover, particularly at the associate level, can be a sign of trouble,” writes ALPS risk manager Mark Bassingthwaighte. “It suggests that something has gone wrong internally. Ineffective management or the complete lack of management might be the problem. Excessively high overhead, personality mismatches, or internal politics could also be to blame. Regardless, if attorney turnover seems to be a regular event at your firm you should be concerned as well. Not only can this lead to an increased risk of a malpractice claim, but the cost in terms of unrecoverable expenses associated with failed hires, credibility with clients, the harm resulting from the internal friction that often accompanies poor hiring decisions, and the time spent on hiring and training replacement attorneys can be significant.”

Closing the Revolving Door

How to prevent attorney turnover from driving your firm psycho?

• Know thyself. The unexamined firm is not worth working at. Can you define your firm in a few paragraphs? What do you do well? What are your weaknesses? What clients are attracted to you? What personality types can best serve those clients?
• Focus on core values. Law school GPA says something about a job candidate. So does a gaudy resume. But beliefs, character and social skills speak volumes more.
• Set clear expectations. What time should the new hire show up each morning? What time should they leave? Is working from home an option? How many billable hours are expected? When and how will performance be reviewed?
• Beware of bringing risk aboard. Look into the candidate’s malpractice and Bar disciplinary history. Ask if any complaints are pending.
• Roll out the welcome wagon. Settling in takes time. Adjustments do not happen overnight.  Develop an orientation and training program. Identify systems and procedures – calendaring, incoming mail, billing – that the hire needs to learn. Designate someone to oversee all this.
• Communicate, communicate, communicate. Don’t just throw the newbie into the deep end of the pool. Swim alongside them for the first six months. A breakdown in communication is the first step to firm psychosis.

Leaving Can Be Sweet, Not Sorrowful

Remember that not all attorney turnover is bad. Some relationships are unhealthy – even toxic. The sooner the split happens, the better.

But in most situations, it is not a good sign that attorneys are constantly coming and going. It’s enough to make you a bit psycho.

Have you worked at a firm where attorneys came and went almost overnight? Why did it happen? What could have been done to prevent it?

Sources:

• Attorneys Liability Protection Society http://www.alps411.com/blog/managing-your-practice---musings-of-a-risk-manager/firm-culture-and-attorney-turnover?sthash.VMMMAy8y.mjjo
• Harrison Barnes Law Crossing http://www.lawcrossing.com/article/2069/Is-it-Bad-to-Be-Part-of-or-Join-a-Law-Firm-with-High-Turnover/

Jay Reeves a/k/a The Risk Man has practiced law in North Carolina and South Carolina. Formerly he was Legal Editor at Lawyers Weekly and Risk Manager at Lawyers Mutual. Contact him at 919-619-2441 or jay.reeves@ymail.com.