An uptick in working from home. An expansion of coverage for vision, dental and short-term disability. A big bump in salaries for Chief Information Officers (CIOs). And a dramatic drop in overall turnover. Those are just a few highlights from the ALA’s 2021 Compensation and Benefits Survey.
“The survey findings show that many firms adapted very well to the pandemic,” says April Campbell, JD, ALA’s Executive Director. “They have taken the right steps to retain their attorneys and staff by helping them balance their personal lives while the ground shifted under their feet.”
A major stabilizer for rattled personnel, of course, is the ability to work from home. And fully 58.4% of the 970 survey respondents had policies that permitted remote activity on a part- or full-time basis, a noticeable leap from the 44.4% clocked a year earlier. The trend was fueled by a need for parents to tend to children and for everyone to avoid the dangers of public transportation and crowded workspaces. Revealingly, some 86% of firms with such policies introduced them for the first time during the pandemic.
And what of the road ahead? Will remote arrangements remain a salient feature of the legal landscape? The answer is … somewhat. While just over half of respondents felt that the incidence of remote working would decrease over time, less than a third predicted it would return to pre-pandemic levels.
“Many of the work-from-home policies will be here to stay,” says Julie K. Barrett-Becker, MBA, a member of the survey planning committee and Director of Finance at Moye White LLP. A major reason, she says, is the increased productivity and job satisfaction the arrangement provides. “People are starting to say, ‘Why don’t we allow working from home for everyone going forward instead of for just the attorneys that have had such flexibility for over a decade?’”
COVID-19 fueled yet another noticeable trend: the urge to remain at one’s current place of employment rather than incur the risks associated with travel and in-person interviews. “People tended to hunker down and ride out the pandemic,” says Barrett-Becker.
The results were noticeable over a broad spectrum of firms. Median attorney turnover across the board was 6.7%, a dramatic drop from the 16.7% of the previous year. Smaller firms with fewer than 10 attorneys recorded no appreciable turnover at all. Only firms with 200 or more lawyers bucked the trend, with an 11.6% turnover rate that was somewhat higher than the previous survey’s 9.1%.
The same story held with staffs: Median turnover came to 13.3%, a stark drop from the 25% of the previous survey. This time the phenomenon was present at all sizes of firms. Those with fewer than 10 attorneys reported virtually no turnover, compared with 33.3% in 2020. Larger firms ranged from 11.6% to 16.4%, a considerable drop from the 20% to 25% from the previous year.
For every action, of course, there comes a reaction. Pent-up demand for a change of scenery is expected to spark serious job hunting over the coming 12 months. “We may see a gigantic upturn in turnover this year,” says Barrett-Becker. “The trend is already visible here in Denver. People are starting to look around and see what else is available.”
Ironically, notes Barrett-Becker, the very same work-from-home paradigm that contributed to last year’s dampening of turnover may well spark its rebound. “Those people who only want to work from home are starting to look for positions in firms where that model is allowed over the long term.”
If more employers are expected to exhibit a wandering eye in the year ahead, they may be encouraged to stay in place with hard-to-duplicate benefits. And the survey revealed a notable effort by law firms to beef up coverage in previously neglected categories. One example was the dental coverage offered by some 84.7% of firms — nearly double the percentage of the previous year. Vision plans were offered by 82.2%, up sharply from 23.7%.
“Providing better health care is one way to keep the most valuable members of a firm from getting poached,” says Barrett-Becker. “Vision and dental coverage are so inexpensive it makes sense to offer them. It may cost firms a smidge more, but they get more for their money. It’s a smart retention strategy.”
In a related area, firms offering medical coverage for dependents continued a multiyear upward trend to 83.2%, a dramatic bump of nearly 13 percentage points over 2020. “The wider range of benefits in the survey is a reflection of the greater difficulty law firms are experiencing replacing people who leave,” says Campbell. “It also shows a growing dialogue among management, attorneys and staff about what people need in the workplace.”
What management giveth, it taketh away — partly, at least. As in other industries, law firms expect employees to shoulder an increasing share of the financial burden for benefits new and old. The portion of firms covering 100% of medical premiums declined by nearly five percentage points to 14.2%, with the great majority of firms picking up between 75% to 99% of the tab. And coverages of 82.4% of medical bills for employees and 52.4% for dependents were noticeably less generous than the previous year. The reason, of course, is the ever-escalating expenses of health-related benefits.
“It’s not unusual to see annual increases in health insurance renewals of between 8% and 15%,” says Campbell. “That is unsustainable for some firms, so they are asking employees to share more of the costs.”
Privacy, security and digitalization — those buzzwords of contemporary times — also signify vulnerable areas of law firm operations. It’s little wonder, then, that this year’s ALA survey revealed big compensation bumps for the CIO whose task it is to assure the safety of sensitive data. In a notable change from the previous year’s survey, the CIO position received the second highest median base salary (after Chief Marketing and Business Development Officers) of $280,000. The position’s total compensation after bonuses came to $327,790.
“The higher salaries for the CIO position reflect high demand for people with technical skills,” says Campbell. “There’s a lot of competition for that talent.” In many cases, she says, the CIO is in charge of knowledge management. That can be critically important, given the expectations for the pending retirement of a big chunk of experienced lawyers and staff. Part of the concomitant succession planning involves learning about the storage and access of information about clients, the firm’s research projects and details of practice areas.
In some firms, adds Campbell, the CIO also manages the technology required to handle the increasing amounts of data exchange between law firms, clients and employees — including those working from home. Expertise is required for ensuring email security, correct equipment setup, problem-free Zoom meetings, sufficient bandwidth for new devices, data backup and efficient document management systems.
Law firms will face challenges in all of the above areas as they enter 2022. The results of the ALA’s 2021 Compensation and Benefits Survey reveal a marked determination to survive and thrive
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