Turnover costs of lawyers who leave the law department

The ABA some years ago pegged a law firm attorney’s average turnover cost – the cost of replacement – at $100,000. That cost included, I suppose, executive search fees, time spent by partners interviewing, new-hire expenses, and ramp-up inefficiencies.

Bear with me while I translate to law departments and make some assumptions. If a law department loses a lawyer who had worked there, say, five years, earning $150,000, search fees could be $50,000. Internal time, including Human Resources, could be 30-50 hours, which at a fully-loaded internal cost of $150 an hour, would approximate $6,000. Relocation fees, bonus for joining add more (I will SWAG $20,000); but inefficiency at the start costs the most: 50 percent effective the first two months; 75 percent the next three months? At $15,000 per month (benefits of 30% on top of salary), the start-up loss amounts to $15, 000 for two months and $12,000 for three, or a total of $27,000.

Headhunter fees, interviewing and scheduling time, relo and signing, coming up to speed – the total of these back-of-the-envelope guesses amount to $103,000. The wallet aches.

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