Employee Retention: How to Keep Your Best Staff & Avoid Competitor Poaching

11 min read

The legal industry’s tight labour market means retaining your existing staff is more important than ever. Here’s how you can mitigate a staffing shortage by incentivizing your existing employees to stay – even when a competitor comes along with a better offer.

The legal industry is facing a talent crunch. The demand for new associates is outstripping supply, and even when firms do finally secure those fresh-faced, energetic new law school grads, keeping them around for the long haul is a struggle. Dal Bhathal, Managing Partner at legal recruitment firm The Counsel Network, says that American law firms are actively headhunting in Canada. Data from IBISWorld indicates the American legal industry has about a 20 times higher market value than the Canadian industry, meaning these American firms have plenty of money to throw around. Luring Canada’s new crop of up-and-coming lawyers away from home is easy for these American firms. 

Where does this leave Canadian law firms? It leaves them overworked, understaffed, and straining to keep up with a growing demand for legal services – all while somehow trying to prevent existing staff from burning out or being poached by other firms with deeper pockets. The legal industry is currently a job-seeker’s market, which means if you want your team to stick around, it’s going to take some effort on your part. If you want to protect your firm from talent poaching and keep your top players on your team, then it’s time to revisit (or create) your employee retention plan. Here are some of the ways that you can avoid exacerbating a staffing shortage by keeping your existing team for a longer period of time.

Be Proactive with Retention Initiatives

Too many law firms approach employee retention from a reactive place rather than a proactive one. Partners and managers will often go about business as usual, oblivious to staff members’ attitudes and plans, only to be blindsided when one of the firm’s top lawyers turns in a resignation notice and accepts a position at a rival firm.

If you’ve ever been in a situation like this one, you’ve likely scrambled to cobble together a more generous compensation package in hopes that your departing lawyer will stay. Perhaps you’ll stretch the budget to offer more generous annual raises that come a little bit sooner in the year. Maybe you’ll throw in a better parking spot, or free lunches on Fridays, or season tickets to professional sports games. 

But these retention strategies all suffer from the same flaw: They’re all reactive.

Your employee has already made the decision to quit. Even if you convince them to stay a little while longer, they’re likely to be less engaged and will still be seeking opportunities elsewhere.

Instead, take a proactive approach to staff retention. Rather than addressing employee grievances when they arise, cultivate a work environment that makes your team want to stay. Give your employees a reason to stick around before the thought of leaving ever crosses their minds.

Proactive staff retention initiatives can take many forms, but the easiest place to start is with an audit of your new hire onboarding process to ensure that you’re giving new hires a good first impression.

Other proactive retention steps you can take might include satisfaction check-ins to see if your staff are happy with how things are going, or implementing new workplace perks like free lunches or remote work Fridays.

Audit Your Workplace Culture

Workplace culture is a key determinant of employee retention – and the culture of any given workplace is usually set by the person at the top. The old idiom that “people don’t quit jobs, they quit bosses” actually has some truth to it – in a 2019 survey by staffing firm Robert Half, 39% of Canadian professionals surveyed said they have quit a job because of a bad boss.

Meanwhile, a January 2022 review of resignation rates conducted by the Massachusetts Institute of Technology and Revelio Labs found that toxic workplace culture is the single best predictor of resignations. In fact, a toxic workplace culture is a 10 times stronger predictor of employee turnover than salary – making it the primary driver of the Great Resignation currently underway.

Workplace culture is a shared responsibility that all staff contribute to, but it’s the people in leadership positions who have the most influence over your culture. Partners, and to a somewhat lesser extent department heads, set the tone for what kind of culture a law firm will cultivate.

If your firm hasn’t taken a conscious and deliberate approach to your workplace culture, you probably have blind spots that are preventing you from identifying and fixing problems. That means you lack an important piece of information regarding why your top performers are leaving. If you want to keep your best lawyers, paralegals, and support staff around, you need to understand their views on your workplace culture.

The most straightforward way to get that information is simply to ask for it – to ask your team what they think of your workplace culture. However, this approach is problematic; more specifically, it invites courtesy bias, a form of response bias where your staff tell you what they think you want to hear instead of giving you their honest feedback.

To address this you should implement a method of ensuring your team’s comments on your workplace culture remain anonymous. This might mean hiring an outside HR firm to conduct a workplace culture audit, or it might be something simpler like giving your staff the ability to fill out anonymous feedback forms. Once you understand how your law firm’s culture influences your team’s attitudes, you can engineer a workplace culture that makes your top performers want to stick around.

Invest in Technology Your Employees Will Love

Some of the most common points of friction among staff at law firms revolve around legal technology. One recent Computer World review of data around the Great Resignation found that confusion and frustration with poor technology is one of the key reasons why employees quit. 

In December 2021, technology columnist Mike Elgan wrote in Computer World that “technology is to blame for the Great Resignation” and that the COVID-19 pandemic has exacerbated technology frustrations. Some of the specific technology-related reasons why employees quit, according to Elgan, include a lack of clear processes and contingency plans for when technology fails, employees feeling like they have no input in the organization’s technology policies and processes, insufficient opportunities for technology training, and a sense of exasperation when technology cannot do what it was designed to do.

That’s why investing in user-friendly technology, and establishing clear processes around its use, can help ensure that your staff stick around long-term. Investing in new technology demonstrates that your firm is actively working to make your employees’ lives better, that you are paying attention to their needs, and that you want to empower them to succeed in their roles.

Further, having a reputation as a technology forward firm can be a great recruitment tool. Today’s recent law school grads and up-and-coming young lawyers – in other words, your soon-to-be junior and senior associates – are members of the Millennial generation (and, to a lesser extent, Generation Z). These two generations, who comprise the under-40 crowd, grew up with technology and came of age in the Internet era. They are tech-fluent, they value working smart (not just working hard), and they love finding creative ways to solve problems and capitalize on opportunities with emerging technology.

Instead of saying, “We do things this way because that’s how it’s always been done,” employees under age 40 live by the mantra, “There’s a better solution for this.”

Even members of Gen X, who would likely be looking for positions as senior lawyers, are still very comfortable with technology and readily embrace innovation in the workplace.

Whether your firm is hiring its next crop of associates to tackle the grunt work, or a group of new junior or senior attorneys to carry out legal matters, embracing advanced technology is quite possibly the most effective way for you to stand out as an employer and secure the best talent before your competitors do. 

(Remember: It’s a job-seeker’s market right now. If you don’t snap up that talented young lawyer – and quick – some other law firm will.)

Give Performance Bonuses and Raises Ahead of Schedule

In sales and marketing psychology, the term “surprise and delight” pops up quite frequently. Psychological studies have repeatedly shown that surprise and delight are two of the emotions that are most strongly associated with a purchasing decision. But these emotions also hold tremendous value in employee retention.

According to employee pension & benefits management company Davidson Asset Management, surprise and delight are two key emotions that promote staff engagement, loyalty, and positivity.

The more you can surprise your top performers with things that will delight them, the more excited they’ll feel about their future at your firm – and the more convinced they’ll be that they want to stay for the long haul. If you’ve been giving your top performers regular annual raises and end-of-year performance bonuses, they’ve come to expect these incentives at an annual interval. 

These incentives may be logically compelling reasons for someone to stay, but people don’t make decisions based on logic – they make decisions based on emotion, and then justify those decisions with logic after the fact.

That means that by finding ways to surprise and delight your top staff, you’ll make their decision to stay an easy one. So if your top-performing lawyer has a scheduled performance review in two months, but you already know you’re going to offer them a generous performance bonus and a more flexible schedule, make that offer today – when they’re least expecting it. In doing so, you’ll ensure that when a competitor comes along and tries to poach your best attorney, they’ll have a reason to say, “Thanks, but I’m very happy where I am.”

Create a Sense of Ownership Among Staff

One of the most effective ways to increase staff engagement and promote retention is to give your best lawyers a sense of ownership over your firm.

This doesn’t necessarily mean you need to give anyone an equity stake in the firm – although that’s certainly an option. If it makes sense for your firm, you could implement an Employee Stock Ownership Plan, or ESOP.

But giving your team stock in the firm isn’t exactly the same thing as creating a sense of ownership. Rather, creating a sense of ownership means taking actions that make your best employees feel like they have a say in how your firm is run. 

You don’t necessarily need to give your team the authority to make major decisions like whether or not to merge with another law firm, but if you can delegate some moderate choices to your top-performing staff, they’ll feel more actively engaged in your firm’s present and future.

For instance, if your law firm donates to charities, you could invite your top-performing staff to help choose which charities will receive donations. This could take the form of a charitable donations committee, or you could have a rotating charity coordinator position that moves from one person to the next. Whatever this looks like for you, the key is to ensure your top performers get a sense of ownership and a feeling of control over how some aspect of your firm is run, however small that aspect may be. The more involved your top performers feel in your firm’s overall decision-making process, the more likely they’ll be to stay.

The Great Resignation is well underway, and it’s impacting all industries – law included. With law firms around the world already facing talent shortages and American firms setting their sights on Canada’s new crop of law school grads, firms that are already short-staffed will be hard-pressed to find new hires. That’s why it’s critical for today’s firms to not only retain existing staff, but also find ways to increase productivity, save time, and automate manual tasks. If your firm is in the middle of a staffing crunch, hiring alone won’t solve it; there just aren’t enough people in the industry to hire. Instead, mitigating the impacts of a staffing shortage will involve some combination of hiring new employees and finding technology-based solutions that increase productivity. But first and foremost, your firm should ensure that your existing team isn’t planning on going anywhere. If one of your top employees leaves, replacing them won’t be easy.

There are several ways to avert a staffing shortage, but one of the fastest and most effective tactics is to implement productivity-boosting software that can help your existing team accomplish more work in less time. Check out our case studies to see how your law firm can save time and better manage a heavy workload with automated records management software – even if you’re short-staffed.