What explains unprecedented talent flight from law firms
Indian law firm risk losing exceptional people to other jurisdictions and segments
Law firms are up against an unprecedented exodus of junior, mid-level and senior talent primarily due to long working hours, poor remuneration and benefits, and a lack of cultural alignment with an organization’s long-term goals, according to a study by legal search and consulting firm Vahura.
Vahura said if the law firms “do not act urgently and imminently” to build a focused and fair workplace, and fail to look after the well-being of people, “they will continue to expose themselves to a high degree of attrition”. The findings of the survey were shared exclusively with Mint.
“Indian law firm domain, on the whole, risks losing exceptional people to other jurisdictions and segments: trends that have already begun,” the report, titled The Vahura Best Law Firms to Work Study, 2022, noted.
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Historically, jobs at India’s leading corporate law firms are highly sought after. Corporate law firms usually absorb the top talent from India’s law schools.
Law firms Mint spoke to said they are taking steps to rein in attrition rates by monitoring work hours, offering hybrid-work options, improving leave policies and rolling out more benefits to attract and retain talent. “All law firms have seen attrition during covid times. This can be attributed to various reasons such as the choice of settling in hometown, wanting to spend more time with family, etc.,” said a senior executive from one of India’s top three law firms, seeking anonymity, adding that the firm has changed its compensation structure and floated a hybrid work policy to retain people.
Vahura said around 50% of the 1,450 survey participants said they were not considering long-term stints with their current employers. “The pandemic period has been the best and worst times for law firms. Best times as it was the highest revenue-earning periods for firms. Worst in terms of stress, mental health and attrition,” said Ritvik Lukose , chief executive officer, Vahura.
While 10% of respondents were considering moving to a different firm within the same practice, 40% were not inclined to continue working for law firms and were exploring flexible roles or setting up their own practice, while 8% were willing to join in-house legal teams of corporates.
Mohit Saraf, founder and managing partner, Saraf and Partners, said: “Firms often have a translucent structure where most benefits accrue to the founders. Because of this we are seeing number of senior lawyers moving along with their teams to newer law firms offering more equitable ownership structure.”
“Attrition was always a key issue for law firms, as eventually it depends on its ability to retain talent by fulfilling professional and financial aspirations. However, now the added dimension is of physical and mental well-being,” said Rajat Prakash, managing partner of Athena Legal.
Over the last two years while court-based litigations slowed down, impacting advocates adversely, chambers and boutique firms; those associated with conglomerates, well-funded firms saw a surge of M&A, dispute resolutions, etc.
But now, firms are relooking at their functioning styles, cross-checking with employees on their well-being more often. Mint has learnt that one of India’s leading law firms is changing its compensation structure as attrition gnaws away the best of their teams.
Athena Legal is “moving to a more transparent compensation structure”. It is also exploring a different compensation structure for flexible and remote working options.
Vahura’s study said most professionals strongly believe moving forward, their ideal working model will be hybrid, with 83% of professionals reporting that their ideal working model is either hybrid or fully-remote.
Law firms are taking a closer look at exit interviews, asking staff to utilize their leaves in the wake of rising attrition.
But the overall employee strength balances out, for those on a hiring spree. J Sagar Associates, which is one of the top three law firms according to the report, told Mint that their attrition levels are pretty much the same as they have been these last 3 years, so no uptick was seen. “We have grown in number, so additions are more than attritions,” said Dina Wadia, senior partner, member of executive committee and head of talent.
The exits are coming in at a time when around 87% of the professionals reported that they work upwards of 8 hours a day. Around 45% of professionals who reported working between 10-12 hours a day, said they routinely felt stressed and tensed during a workday. The problem appears to be even more acute for professionals who reported working 12 plus hours a day, with over 70% of such professionals reporting that they routinely felt stressed and tensed during a workday.
However, Padmini Rathore, CEO, DSK Legal, said exits were taking place because of better roles, fitment issues with the current team, onto the client side, among others. “A 5-7% of attrition is normal for law firms and is not a cause for concern,” Rathore told Mint.
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First Published:18 Aug 2022, 12:43 AM IST
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