Impacts of Candidates-Screening Methods on Attorney Turnover, Business Revenues, and HR Costs in US Law Firms

Abstract

The high turnover rate of employees in US law firms is particularly concerning post-pandemic where law firms, together with other industries, are re-adjusting their operations to a new socio-economic environment. A low employee retention rate is likely to cause significant impacts on the business revenue, employee morale, and HR costs of firms. The objective in this thesis is to shed a light on whether the candidate screening methods implemented by the US law firms for associate attorney positions have an impact on the turnover rate and, furthermore, whether there is a correlation between the turnover rates and business revenues or HR costs. The data retrieved have suggested that for large law firms (199 surveyed), and medium law firms (246 surveyed), the methods of screening for associate attorneys do impact the turnover rates, and a combination of various screening methods is preferable compared with using the resume alone. As to the impact of the turnover rate on the firms’ business revenues and HR costs, it has been shown that there is a correlation at a statistically significant level in large law firms for two dependent variables: turnover rate impact on business revenues and HR costs (p-values 0.001), and, in small law firms, turnover rate impact on business revenues (p-value = 0.030). The results did not show a statistically significant impact of the turnover rate on the business revenues or HR costs in medium law firms. The small law firm data did not reflect a connection between the screening method and turnover rate, nor between the turnover rate and HR costs, probably due to smaller sample size in this category (15 surveyed). Accessing screening methods shown to have a positive impact on reducing turnover rates may assist law firms in increasing their associate retention rates.