Digital transformation and its pandemic-produced acceleration have elevated talent to a top-level business priority. For employers, it has caused them to rethink what talent means in a dramatically shifting marketplace. What are its characteristics? How does it align with corporate purpose and culture? Where does it come from? How can individual talents be melded into an integrated, data-backed team? Why is a diverse workforce intrinsically and extrinsically important and how can it be optimally managed? What is the organizational commitment to up-skilling, career-enhancement, and well-being? These are among a growing list of talent-related considerations.
Digitally mature businesses have developed a serviceable profile of talent applicable to several functions—legal included. Talent is drawn from an increasingly diverse pool of candidates. It comes from a rich mix of industries, generations, backgrounds, experiences, perspectives, passions, and personalities. Successful organizations extract the most from talent by setting common goals, clear purpose, inclusive, team-oriented organizational culture, and humanistic leadership that balances individual expression with collective orientation.
The core skills that bind the talent tapestry include: critical thinking skills, intellectual agility (“connecting the dots”), emotional intelligence (people skills), teamwork, cultural awareness, passion, inquisitiveness, a learning-for-life mindset, technological and data fluency, and leadership potential. These are the building blocks upon which talent can continue to learn, grow, leverage, share, experiment, innovate, lead, and produce value. A critical caveat: the organization must be committed to investing in and fostering employee health, well-being, engagement, up-skilling and professional advancement. Translation: humanize the workplace.
The good news for business is it knows what it needs from talent. The bad news is: (1) there is not enough of it; and (2) if the Great Resignation (see below) has taught us anything, it is that business has yet to adapt to the changing needs, expectations, and demands of the talent it seeks. This is especially so for Millennials and Gen Zers. A McKinsey article offered a blunt assessment based upon its research of the issue: “Leaders are out of touch with employees and need a wake-up call.”
Customers Came First, Then Shareholders—Now It’s The Workforce
The journey of business transformation involves three parallel and convergent paradigm shifts. The first involves the corporate relationship with customers and a “flip” of the buy-sell dynamic. The business mindset has morphed from “what can we sell customers?” to a “how can our products and services positively impact customers, provide them an outstanding end-to-end experience, and earn their trust and loyalty?” The customer relationship has become less transactional and more relational. Customers are regarded as corporate assets, not simply revenue sources. Their net promoter score, data, social media endorsement, and brand loyalty are critical to business sustainability. “Customer-centricity” was a corporate priority before the pandemic, and it continues to be and to evolve now.
Customer-centricity has been accompanied by a growing corporate shift from shareholder-centricity to a broader stakeholder group that includes employees, supply chain, customers, communities, society-at-large, and the environment. This phenomenon is often referred to as “Stakeholder Capitalism.” Business now balances short-term profitability with longer-term sustainability derived from satisfying the needs of its wider stakeholder constituency. Corporate metrics now extend well beyond profits and share price. They are expected to be good corporate citizens, environmental stewards, have sound governance (ESG) and to be diverse, equitable, and inclusive (DEI).
Yogi Berra might have said that corporations are experiencing “déjà vu all over again”—this time with employees. The devastating physical and emotional toll of the pandemic, the sudden shift to remote and/or hybrid work, and widespread isolation-induced existential reflection have changed the workforce and its attitude about work. Not only does talent hold the upper hand in this sellers’ market, but it also has elevated expectations of employers that extend well beyond a fatter paycheck. Talent expects business to align with its sensibilities, lifestyles, and value systems—not the other way around.
The Post-Pandemic Legal Workforce: More Money, Higher Attrition, And A Paradigm Shift
The rapid convergence of the pandemic and other socio-economic forces have produced “The Great Resignation,” a mass job exodus of historic proportions. The Bureau of Labor Statistics reported that last year, an average of more than 3.95 million workers quit their jobs each month. The November total was 4.5 million. The data shows that the defections are far from over. According to research conducted by Microsoft, 41% of global workers are thinking of quitting their job or transitioning to other professions. The legal industry is not immune.
The Bureau of Labor Statistics reported that from August 2021 to December 2021, more than 700,000 people in the professional and business services category — which includes lawyers and other legal professionals — had quit their jobs each month. In September, Bloomberg Law’s Attorney Workload & Hours Survey reported that nearly half of all lawyers surveyed said they were either actively looking for new jobs or open to offers. This is on top of corporate law firms’ already sky- high pre-pandemic turnover rate, especially at the junior level.
Thomson Reuters Institute/Georgetown Law 2022 “Report on the State of the Legal Market” revealed: ” The associate turnover rate for law firms reached 23.2% through November 2021 on a rolling 12-month basis. That is significantly above the 18.7% rate experienced in 2019, the year before the pandemic. For Am Law 100 firms, the turnover rate was 23.7% through November 2021.” The eye-popping attrition rate has significantly increased even as associate pay packages have skyrocketed.
What’s going with the workforce generally and legal professionals, specifically? Spoiler alert: the exodus might be dubbed the “Great Resignation” by the legal establishment, but the “Great Reboot” is what younger generations might term it. The “reboot” refers to new ways of working and balancing that with other aspects of life.
Like the protagonist in the Dickensian novel “Great Expectations,” today’s talent—especially Millennials and Gen-Zers— have great expectations beyond wealth. They seek purpose- to understand the why behind their work, its relation to the organizational mission, and its impact on workforce colleagues, customers, society, and the environment.
The younger workforce generations expect to be heard, informed, and free to be themselves. They want to work in a culture that is humane, diverse, inclusive, equitable, and transparent. They prefer flat (non-hierarchical) organizational structures, freedom to experiment and to draw from their backgrounds, experiences, and passions, to take on challenging work, and to be valued beyond a paycheck. They want to retain their individuality but also to be part of a community. They seek a workplace that more closely reflects their values, priorities, and lifestyles. Their view of a “career” is more fluid than past generations.
If the foregoing sounds like a Panglossian Woodstock flashback (an event the author attended but scarcely remembers), it’s not purple haze. Millennials and Gen-Zers have revived the faded idealism of their baby boomer parents and grandparents. “The Great Resignation” can be seen as their Woodstock—a mass proclamation to “the establishment” (older generations in power) that they want to live life differently and create a better world. Admittedly, quitting one’s job is not the same as smoking weed and listening to Jimi Hendrix play “The Star Spangled Banner.” The connective tissue is a yearning for something different— a gentler, more humanistic approach to work and life. For example, the Microsoft Work Trend Index found that 33% of those surveyed would forego a pay raise for paid time off to do volunteer work.
The Great Resignation Grabs Headlines; Its Causes Are What Matters
McKinsey conducted extensive research on the causes of The Great Resignation. It spanned five major markets—Australia, Canada, Singapore, the United Kingdom, and the United States. The findings were broadly consistent across industries and jurisdictions, suggesting that the mass job exodus is a global phenomenon. The study revealed that the exodus is far from over. Forty percent of the employees surveyed said they are at least somewhat likely to quit in the next three to six months. Eighteen percent of the respondents said their intentions range from likely to almost certain.
Unsurprisingly, there is a disconnect between employer and employee explanations of the resignations. Employers cited compensation, work-life balance, and poor physical and emotional health as the principal reasons why people quit. These issues mattered to employees, but not as much as employers thought they did. The top three factors cited by employees were: undervalued by their organizations (54%); undervalued by their managers (52%); and lacked a sense of belonging at work (51%). The importance of these unrequited human longings —recognition, empathy, and connection, among them—underscore the post-pandemic workforce thirst for a humane workplace.
A Fast Company article examined why a handful of companies (a disproportionate percentage among them in tech) have been able to attract and retain talent even during the Great Resignation. These companies tend to share four key characteristics (1) they prioritize and recruit underrepresented candidates; (2) they extend offers quickly and compress the recruitment process; (3) they are transparent about compensation; and (4) diversity, equity, and inclusion are central to their corporate ethos. This cultural profile and the sense of belonging is rare in law, especially among large corporate firms.
Technology has enabled legal providers to carry on and, in many cases, to thrive during the pandemic. It also introduced the bulk of the legal workforce to a new way to work, enabling them to more seamlessly integrate work with daily life, recoup commute time, and gain flexibility—often with longer hours. McKinsey research revealed that 73% of surveyed workers want flexible work options. At the same time, 67% want more in-person contact with their teams. The takeaway is clear: some human contact is important, but so too is flexibility. That’s why McKinsey concludes, “The data is clear: extreme flexibility and hybrid work will define the post-pandemic workplace.”
It is time for the legal industry to flip its strategy for identifying, recruiting, hiring, onboarding, retaining, and up-skilling talent. It’s not what they want but what talent wants that matters in today’s marketplace. Legal providers would be wise to mine and analyze data, then fashion a talent strategy based upon this litany of questions:
“What do customers and society expect from the legal function and what differentiated role can we play?”
“What kind of talent do we need to meet and exceed those expectations?”
“What kind of culture and workplace must we create to attract thetalent we need?”
“What does talent we want expect from us and what steps can we take not only to hire them but also to retain and up-skill them?”
Data and analytics provide insight, but human adaptation achieves goals. The data underscores that throwing money at legal talent, without more, is not a successful strategy—especially among early-stage professionals. The legal industry must become more humane, empathetic, purpose-driven, accountable, diverse, inclusive, culturally-aware, innovative, collaborative, and service-oriented. It must take better care of its own as well as its customers, society, and the environment. Like the businesses it represents, the legal function must have a purpose beyond short-term profit. It must more closely align with all those that it touches. Its workforce is a good place to start.
Legal employers should treat employees like customers; both are corporate assets. Just as law is becoming more customer-centric, so too must it become more employee-centric. Richard Branson put it well: “Train people well enough so they can leave. Treat them well enough so they don’t want to.”
Article originally published in Forbes.