Mid-size law firms face challenges in finding top-quality lawyers, often competing with larger and smaller firms for talent. The quest for the ideal “unicorn” associate attorney becomes a challenging odyssey, leading many to settle for less. Despite ambitious growth goals in 2024, firms risk selling themselves short by only hiring traditional in-office associates. Incorporating remote associates through outsourcing is emerging as a strategic solution, and in 2024 could be a factor for firms looking to modernize the way they practice law amidst talent shortages and industry competition.
Hiring Challenges at Mid-Size Law Firms
The Traditional Hiring Process is Slow and Expensive
Traditional law firm hiring is a time-consuming process that can hinder firm growth and productivity. Entry-level hiring and lateral recruitment often take months, delaying crucial staffing needs. Mid-size law firms, especially, may struggle with traditional hiring methods due to specific skill requirements and the lengthy hiring process. Additionally, traditional hiring is expensive, involving costs from advertising to onboarding, detracting from billable work.
Attorneys must view hiring as a profit center, considering overhead expenses alongside salaries. Streamlining the hiring process is essential for efficiency and cost-effectiveness, though finding the right solution is easier said than done. Developing a diverse recruitment strategy utilizing job boards, social media, and professional organizations broadens the candidate pool and maximizes opportunities. Therefore, firms need to look at other viable staffing options to stay competitive and thrive in today’s economy.
The Cost to Hire an Associate Attorney in 2024
Hiring a traditional law firm associate in 2024 is a costly endeavor, with expenses totaling nearly $300,000 (or more). This significant cost deters many firms from hiring despite their urgent need for assistance. The primary expense is the salary, which has seen a substantial increase in recent years, reaching a median of $200,000 for first-year associates. However, this salary is just one component of the overall cost. Other factors include benefits, training, and professional development.
Benefits, such as health insurance and retirement contributions, can add up to a significant portion of the associate’s compensation. Additionally, the firm is responsible for covering expenses like malpractice insurance, bar dues, and continuing legal education. Equipment and office space are also essential considerations, especially in the current work-from-home environment.
Furthermore, underutilization of associates can be a concern, as firms may struggle to maintain consistent workflow to support full-time hires. Chronic underperformance among associates is a prevalent issue, as well, highlighting the importance of careful evaluation before committing to a hire.
When all expenses are tallied, the total cost to hire a first-year associate amounts to approximately $296,600. To generate a profit from this investment, the associate’s work must collect revenue totaling at least this amount.
Ultimately, the decision to hire an associate requires a thorough analysis of costs, workflow, and expected revenue generation. Firms must carefully consider their specific market conditions and practice areas to ensure the viability of each hire.
Salary Trends Since 2020
Since 2020, the legal industry experienced a surge in associate salaries, particularly in big law, triggered by competitive hiring wars. This trend accelerated despite market fluctuations, spreading salary increases across firms of all sizes and locations according to the 2023 Associate Salary Survey conducted by NALP.
Notably, NALP reported that first-year associate salaries rose the most at firms of 100 or fewer lawyers seeing a 29.2% increase from 2021 to 2023. However, a market correction in 2023 led to associate layoffs, tempering the salary escalation. As the economy rebounds, this cooling effect on salaries is expected to persist in 2024 amidst economic uncertainties like rising interest rates and inflation fears.
Associates Want Remote Work
Law firm associates increasingly prioritize remote work options, as revealed by the “Where Does the Legal Profession Go from Here?” survey by the American Bar Association. Young lawyers, especially, express willingness to switch jobs for remote work opportunities. Results indicate that remote or hybrid work hasn’t negatively impacted productivity or quality, with many advocating for remote court proceedings.
Clio’s Legal Trends Report echoes these sentiments, highlighting the importance of flexibility in attracting and retaining legal talent. Successful law firms must adapt to accommodate this preference to remain competitive and address talent shortages, potentially exploring legal outsourcing as an alternative solution.
Where are all the associates?
Law firms continue to be challenged with finding the right talent for their firm, but the talent hasn’t vanished; it’s about knowing where to look. Traditional hiring methods are costly and time-consuming, prompting more exploration of modern alternatives.
Outsourcing to remote contract lawyers has proven a viable solution, offering affordability, accessibility, and flexibility. With no overhead costs, firms can hire as needed, benefiting from experienced attorneys without training expenses. Moreover, outsourcing accommodates workload fluctuations, ensuring immediate support when required. Legal outsourcing has become commonplace, providing numerous tailored options to suit law firms’ requirements in 2024 and surely in the future.
Modern Recruitment Strategies
Law firms are embracing modern recruitment strategies to adapt to the evolving legal landscape, utilizing tools like LAWCLERK to streamline hiring processes. Flexibility is key, with firms opting for diverse staffing models, including full-time, part-time, or outsourced remote associates. There are many benefits to this multi-pronged approach including rapid staffing, access to a broad talent pool, and quick project initiation. These all lead to increased productivity and revenue. The flexible approach focuses more on individual firm needs, and optimizes for productivity and profitability.
Conclusion
Mid-sized law firms can face a lot of challenges when it comes to hiring top talent. However, with the right approach, it is possible to hire the best talent for mid-size law firms and create a strong competitive edge in the legal industry.
LAWCLERK offers several flexible solutions to help your legal team scale up (or down), depending on your needs. Whether you need additional legal support for long term engagements, short-term work, or for a high-volume initiative, we have solutions to fit your needs.
This is a flexible non-partnership track associate that you can integrate into your firm when you need a longer-term engagement. You can scale your associate pool and provide leverage to your partners’ valuable time, freeing them up to focus on your legal strategy. You can fill open head count, get more work done faster, produce more billable hours and leverage the associates’ time to turn a profit. You can find the talent you need through our platform and pay them bi-weekly for monthly engagements.
Our most flexible solution is project or hourly work done by contract attorneys. With LAWCLERK you can quickly scale up to tackle any legal work type. Through our platform you can review attorney profiles, identify candidates, interview them, and collaborate on the work. Great for when you need someone to help with very discrete and limited scope work right away where you can tap into occasional subject matter expertise. Once onboarded, you pay them by the hour on a flexible retainer, as needed. If the work is complete, no problem, put the retainer on pause and re-engage with them (or someone else) later.
Working on a case that requires staffing for a large-scale project such as document review, mass tort, etc? Our Custom Solution is for you. Our staff will work with you to scope the project requirements. We’ll manage your deadline driven engagement end-to-end with our talented remote associates performing the work to your specifications. You can pay through a fixed fee, or pay by the hour, we’ll work with you to find what works best.
For more information on hiring trends, download our Hiring Guide for 2024
