In response to economic challenges, law firms are increasingly looking for ways to save money without resorting to layoffs. One strategy that has gained popularity in recent months is adjusting associate class years.
Legal recruiters in California and New York have reported seeing firms hold back associates from advancing with their class or even ask them to go down a class year. David Nicol, a partner and owner at legal recruiting firm Marsden, has observed this trend firsthand. He believes that many firms “overhired or didn’t balance their hiring appropriately” during a time of high demand, and are now grappling with the consequences.
“The cost of talent has been dramatically pushed up, which weighs heavily on firms’ cost bases, and now, something’s got to give,” Nicol told Law.com. By reducing associate class years, firms can save on salaries and other costs associated with more senior positions.
Lauren Symington, the chief talent officer of Phoenix-based Lewis Roca Rothgerber Christie, echoed Nicol’s concerns about rising costs. She noted that many firms felt compelled to raise salaries to attract top talent but may have gone further than they were comfortable with. Now that the economic climate has shifted, they are feeling the pinch.
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Despite the cost savings that can come from adjusting associate class years, some firms may be hesitant to pursue this strategy for fear of damaging morale or losing talented attorneys. Symington suggests that firms should approach their talent pool as an investment rather than a cost to be minimized.
“If you treat people as something that can be reduced in the future, that’s a really bad place to start,” she said. “You should approach it as an investment in the future of the firm.”
It remains to be seen how widespread the trend of adjusting associate class years will become in the legal industry. Some firms may prefer to make other cost-cutting moves, such as reducing bonuses or scaling back on perks like free meals and gym memberships. Others may be willing to weather the storm without making any major changes to their staffing levels or compensation structures.
However, as the economic climate continues to fluctuate, law firms will need to remain nimble and adapt to changing circumstances to stay competitive. Adjusting associate class years is just one of many strategies that firms can use to save money and weather the storm. By taking a thoughtful, strategic approach to workforce management, firms can position themselves for success in the future.