Top City Law Firms Making Nice to Keep Jumpy Young Lawyers

With turnover high and the cost of replacing young lawyers even higher, some city firms are adopting a bold new tactic to hold onto their associates: They’re docking the partners.

On Oct. 20, leaders of Weil, Gotshal & Manges announced they would begin tying compensation to mentoring by considering, when divvying up end-of-the-year profits, whether a partner properly nurtured associates.

“It will clearly be taken into account at compensation time,” said Stephen Dannhauser, managing partner of the $400-an-hour firm.

The next day, the partners of another major law firm, Brobeck, Phleger & Harrison, announced a similar kiss-up to associates. Theirs came with an added twist: The associates will be asked to fill out a questionnaire that will rate their supervising partner. Anonymously, of course.

It is highly unlikely any partner will actually lose a cent from the firms’ draw. This is, after all, more about message than money. But the move to hit partners where it hurts most shows how desperate firms are to keep their young workhorses on board.

“What we’re trying to do is create a more collegial environment,” said Barry Wolf, a member of Weil Gotshal’s associate retention task force. “The partners all understand how important this is. It’s hoped that the partners all understand how important this is.”

Partners pull in the law firm’s clients, but it’s associates who grind out document drafts and stand waiting by the fax machine until all hours of the night. For generations, associates have subjected themselves to this woeful white-collar hazing for the prize of one day becoming a partner or landing a good job with a client.

With salaries for associates at the big firms starting at $100,000, that might not seem like such a bum deal. But many walk away with painful memories of canceled vacations and partner tantrums.

And walk away they do. A National Association for Law Placement study found that 56 percent of associates nationwide leave their firm by the end of their fourth year. An upcoming City Bar Association survey is expected to show figures even higher.

“Speak to a chairman of a law firm right now and the primary concern is not getting new business, is not even paying high salaries to the associates. It’s recruiting and retaining people. It’s looking for ways to increase our retention,” said Mel Immergut, the chairman of Milbank, Tweed, Hadley & McCloy.

Every junior lawyer out the door not only carries psychic costs–starting fresh with new employees is a headache for any employer–but there are also real costs. The tab for recruiting, hiring and training new lawyers can run as much as $80,000 per position.

Then there’s the cost to a firm’s reputation–there’s not a young lawyer out there who doesn’t know which ones nurture and which ones eat their young. Too much turnover just makes it harder to find replacements.

“The life of the partners right now is less posh, they feel the crunch because they can’t find enough associates to work on their deals. So firms are throwing out different solutions to hold onto them,” legal recruiter Steve Pittleman noted.

There’s nothing magnanimous about it. “Other people are eating your seed corn,” said recruiter Jonathan Lindsey. “These associates are the people who are going to grow up to pay you your pension. They’re going to keep the firm going, they’re the type of quality that you need to keep attracting clients.”

Until Weil Gotshal came along, most firms focused their retention efforts on perks–offering associates sabbaticals for the first time, eliminating their billable hour requirements, even giving them gifts such as George Foreman grills. That’s on top of pay raises up to 10 percent, and extra bonuses.

Firms like Milbank also have been pushing in another direction, trying for the big “we’re-all-in-this-together” message with weeklong retreats for each new class of associates these past three years.

Yet, as one study has shown, one factor is significantly more likely to persuade a young associate to stick around: having a mentor.

Rosenman & Colin, one-third the size of Weil Gotshal, very quietly back in February began enforcing the mentoring goal: hitting its partners in the pocketbook. That Weil Gotshal and Brobeck are moving in the same direction shows that firms are serious about this retention thing, after all.

Nurture, or Else

Weil Gotshal has 750 attorneys, including 204 partners. With key clients that include General Motors Corporation, General Electric Capital Corporation and the National Basketball Players Association, it is a venerable corporate firm with considerable clout in New York’s law community.

Brobeck, with 600 lawyers including 167 partners, is known for its technological clients including Cisco Systems Inc. and E-Trade and it handled the initial public offerings for Doubleclick and Geocities, cementing its place as a key firm for both Silicon Valley and Silicon Alley business.

Weil, Gotshal’s five-partner retention task force pondered attrition for a year before concluding that it all comes down to personal relationships. Thus the emphasis on each partner being personally responsible for the well-being of his or her associates.

The firm will designate at least one partner in each department a “career development partner,” to guide associates, and hire a full-time staff member to monitor partners’ relations with associates. That person, the director of associate relations, “will have the authority to fix things,” Mr. Wolf said. “This is going to be a senior administrative position in the firm, reporting directly to the executive partner.”

In addition, Weil Gotshal will pay associates a new, accruing longevity bonus that will give a first-year–at the current pay scale–an extra $12,960 for sticking around until the end of their third year and $64,080 until their sixth. It will also pay associates all their guaranteed compensation as regular salary together, and stop deferring some of it as a “bonus.” To help associates leave the office earlier in the day, Weil Gotshal will give junior associates a $2,000 technology stipend so they can buy home faxes and other gadgetry. Also, associates can use the gym membership subsidy at the health club of their choice.

“Obviously, the financial parts are tangible, they know what the check is,” said Mr. Wolf. “The other parts of the program, which is changing behavior, they are excited about the prospect of it changing, but they’re waiting to see signs of a change. It obviously will take some time.”

Mr. Wolf said he expects none of his $865,000-a-year partners to botch the mentoring bad enough to be penalized. Nonetheless, Joshua Rubenstein, chair of Rosenman & Colin, said he, too, was hoping there would be no one docked when partner draws are set next February. But he said he has had to warn one repeatedly rude colleague: “If I hear about this happening one more time, you’re going down 25,000.”

Matching Reds and Golds

Brobeck is taking this mentoring thing a step farther. From now on, associates will fill out questionnaires rating a partner’s behavior. The firm leaders will read the anonymous evaluations when they set each partner’s percentage of the profits, which last year amounted to an average $545,000, according to The American Lawyer .

The questionnaire judges partners on a variety of key skills: delegating; designing the scope of assignments; weighing an associate’s schedule; keeping a project running smoothly; answering questions; fairly choosing which associates to work with and giving effective career guidance. The firm gives a best-mentoring prize so the survey is seen as a “positive tool” for partners, said managing partner James Burns. But, he said, the bottom-line message is that “poor mentoring could retard your progress as a partner.”

To be sure, not all firms will follow the path of “partner accountability.” To some the policy seems a little too corporate nouveau . “Many of us have fairly stable compensation systems, lockstep or modified lockstep, and it’s almost irrelevant in that context. Compensation is based solely on the number of years at the firm,” said Peter v.Z. Cobb, head of Fried, Frank, Harris, Shriver & Jacobson.

But no New York firm leader dares appear complacent these days. Mr. Cobb, for instance, recently took a step in Brobeck’s direction. He has asked his partners to volunteer to submit to review by their associates. So far, a quarter have gone for it.

Milbank, Tweed plans to continue its annual retreat to integrate new associates into the firm’s culture. On Sept. 26, Mr. Immergut bused his 57 brand-new, not-yet-certified attorneys up the Hudson River to a “boot camp” at the $305-a-night Tarrytown House. The firm gave them six days of corporate law brushup classes as well as run of the property, including a Jacuzzi, all-you-can-eat snack bars, in-room Nintendo machines, a bowling lane and a majestic view of the Hudson Valley beside a stately Georgian mansion.

The primary focus was business. Standing in the sunshine after a sluggish afternoon session titled “The Big Acquisition,” John O’Connor, a partner in Milbank’s global corporate finance department–the only partner in the firm with a ponytail and goatee–stubbed out his Winston Light. “This week, they’re starting to understand they wasted three years and $40,000,” said Mr. O’Connor, who ran the program.

But the associates’ favorite session was the one about the soft stuff, relationships. During a public speaking workshop, outside consultants labeled each associate’s communications style with a color, and told them ways to collaborate when a partner’s color doesn’t match. “I was a red. Almost all of us were red,” said new associate Morgen Bowers, a 31-year-old former business manager, actress and bartender at Blondie’s Pub on the West Side. “Reds are bottom-line: Give me the bottom line, I don’t want to hear all the mushy stuff–whereas golds are great listeners and they’re very empathetic.”

Mr. Immergut may be a gold. He didn’t mind that the associates ended up doing their assigned homework together at tables in the Sleepy Hollow Pub, between rounds of Foosball and pool. “We wanted it to be a pure bonding experience,” he said.

Indeed, the training session, which probably cost the firm around $75,000, had the desired effect on Ms. Bowers: “I like knowing that somebody’s making a commitment to my education and bringing me up as a lawyer, and not just using me to fill out blanks on documents for four years until they decide whether I’m even partner material. That’s what this program says to me.

“If I have a problem down the road, I might be more inclined to try and work it out rather than just leave, because they showed that commitment,” she added.

The feeling might not last. In The American Lawyer ‘s national associate poll last summer, Milbank had lackluster scores in training and guidance, and one wrote, “The Milbank partners view associates as wage laborers, not colleagues.” Some of the associates surveyed had been to Tarrytown in previous years.

Laurie Becker, a veteran legal recruiter, said there’s only one retention policy that’s sure to work: “When law firms have nice people in them, the associates tend to stay in them,” she said.