The Great Resignation & Associate Shortage: Cause & Effect

America is experiencing what has been deemed The Great Resignation. More people have quit jobs and/or declined to participate in the workforce than at any time in our history. The factors that have led to this include: working remotely, bad management, the rejection of minimum and unacceptably low wage jobs, and a massive shift in the mindset of employees.

COVID was the impetus of The Great Resignation

Numerous studies have concluded that the COVID-19 pandemic was where The Great Resignation started. Employers who would never have considered letting their ranks work remotely, were forced to do so. In recent months, many companies and law firms have tried to force personnel back into the workplace and were faced with a surprisingly high number of employees who resigned, in response to what would previously have been an ultimatum.

Amy Sheridan, the former hiring partner at Sullivan & Worcester puts it this way: “It seems COVID has caused attorneys — really all of us — to reevaluate priorities, both in our careers and personal lives. Students and laterals are looking for firms that allow them to be authentic and have a meaningful, rich career and practice.  They are looking for a professional home, not a way station.  Firms that have been relying on traditional incentives – money, prestige, promises for something better down the road – are having to adapt.  And not all have kept up.”

Bad Management Doesn’t Work Anymore

Whereas previously, the old adage “The Customer is Always Right” was once indisputable, innovators have come to realize this is no longer true. Sir Richard Branson is famous for his quote: “Clients don’t come first. Employees do. If you take care of your employees, they will take care of the clients.”

Large numbers of employees have quit because of the treatment they have received from customers, management and law firm partners.

In fields such as hospitality, health care, airlines and retail, management has failed to protect their employees from  “Karens & Kevins” who refused to wear masks in restaurants, stores, on planes and in ERs. Many of these people have become violent and had to be escorted out by security, arrested by police and in one case, a man was duct-taped to his seat on a plane. In that incident, management at Frontier Airlines suspended the employees until a video of the incident went viral and they were forced to reverse their position.

Poor treatment of employees by managers and partners is no longer being tolerated. This concept seems very difficult for many managers and partners to accept because they have always held the upper hand. They have usually had several horrible bosses during their career and just accepted that as part of paying their dues.

This is especially true with Boomers because they were raised by parents who grew up in or just after The Great Depression. The mindset created by management during that time lasted for generations. It was simple: “You should feel grateful to have a job!”

This mindset lasted for decades until a new, iconoclastic generation began joining the workforce: Millennials.

Millennials are simply the modern incarnation of a group of Boomers who were once called “hippies.” Like the hippies of the ’60s and ’70s, millennials and post-millennials are fighting for civil justice and equality, protection of the environment etc. More importantly to employers, the majority are eschewing the societal norms expected from them by their parents and employers.

After over a century of corporate dominance, the labor force has finally turned the tables. Whether working class, middle class or white-collar professionals, they are demanding better.

In many occupations, the demand is for better pay. For example, in every major city in the USA, $15 an hour is barely above the poverty line, and yet employers are still seeking people to work for $10 or even $8 an hour. The reply from the workforce is now a simple “No thanks.”

This epitomizes the new mindset which has changed from “You should be grateful to have a job” to “You should be grateful to have a great employee like me!”

The more astute partners and managers have observed this and adapted accordingly. Randy Katz, a member of Clark Hill PLC is one of them.

“The old days of economics ruling the candidate’s decision has evolved beyond that to a balance that prioritizes lifestyle, mentoring and work satisfaction, over pay alone. Many partners need to reexamine their management skills and the ways they interact with both associates and professional staff.

“Money alone, will no longer be enough to retain your best people —especially if they’re billing so many hours, they don’t have time to spend it. They want a reasonable lifestyle, real mentoring and meaningful work.”

This was confirmed by an associate who asked to be anonymous because she is currently in the process of leaving an AmLaw 50 firm where she makes over $250,000 annually, for a mid-sized firm that will pay her under $200,000 but has guaranteed in writing, that she will never be required to bill more than 1,800 hours. She may do so if she chooses to, or wants to help out a great boss or fellow associate who’s in a pinch, but it’s not required.

“I’ve been working 60-80 hour work weeks for almost four years now. I haven’t seen friends or family, my boyfriend broke up with me and I’m burned out. When the partners aren’t yelling at me, they’re condescending and belittling. Sorry, but I don’t want their heart attacks, divorces, alcoholism and everything else I see all around me.”

While the AmLaw’s and many other firms are enjoying record-setting profits, most fail to read the tea leaves and recognize the portents of the future. As the CEO of a national legal recruiting firm, I talk with partners and associates about their reasons for moving daily. Even the firms who are paying associates the new pay scale will be in for a rude awakening because I’m hearing a phrase every day, I used to seldom hear: “Once my student loans are paid off, I’m outta here.”

The same holds true for law firms that characterize themselves as “Working Partner” firms. When someone with 20-plus years of experience and a solid book of business is expected to bill over 1,500 hours a year, they have better, more modern options.

As John Lively, the managing partner of Practus Law puts it: “If a partner brings in seven figures and bills less than 500 hours in a year, I’m going to thank them and congratulate them on their lifestyle. We’re concerned about high-quality legal product, client relations, and profitability – not who puts the pen to paper.”

As the Nobel Laureate once said – The times, they are a changin’.