The Talent War in Law Firms: Why Hiring and Retention Are the Keys to Long-Term Growth

In professional services, the name of the game is talent. Acquiring top talent and retaining them for the long haul is the most crucial factor in scaling a law firm. Yet, most law firm owners struggle with this. They want to grow, but they don’t know how to do it right.

Many attorneys I speak with are hesitant to bring on additional staff. Why? Because they fear losing control. They know that clients ultimately decide who they want to work with. If a star associate leaves, they could take a book of business with them. It’s not paranoia, it’s a legitimate risk. I’ve seen it happen. A talented attorney leaves, and a substantial portion of their client base walks out the door with them.

The problem starts with hiring, but other factors at at play as well. It’s vital to build a culture where people want to stay.

The Reality of Small Law Firms: Why Growth Is Harder Than It Looks

The structure of the legal industry makes talent retention particularly difficult. According to ABA data:

• 95% of U.S. law firms have 20 or fewer attorneys.

• Solo practices make up around 30% of all law firms.

• Firms with fewer than six attorneys represent around 75% of all law firms nationwide.

That means the legal industry is dominated by small firms, and small firms struggle to scale.

The evidence? 

You don’t see many law firms with 200+ attorneys firms, and those with 500+ attorneys are incredibly rare. There’s a reason that firms like Morgan & Morgan, Dentons, and Kirkland & Ellis are outliers.

The truth is, law firms haven’t figured out how to work well together. They haven’t figured out how to align goals, retain talent, and create an infrastructure that allows for real growth.

Why? Because lawyers are great at being lawyers, but most are not great at running businesses. And, by law in the USA, law firms have to be owned by lawyers, making it harder to bring in outside business expertise.

While some jurisdictions are starting to change this, most law firms are still trapped in an outdated ownership model where the attorney-owner has to figure everything out alone. And unfortunately, law schools don’t teach leadership, team management, or business strategy.

The Cost of Thinking Too Small

Many law firm owners make the mistake of thinking too small, which is exactly why they stay small.

They resist advice from non-lawyers, preferring to stay in their comfort zone. But that creates an echo chamber, one that breeds stagnation, not innovation.

If you want to build a firm that attracts top talent and keeps them, you need to start thinking differently and acting differently. You need to understand what top attorneys want and structure your firm in a way that makes them want to stay.

Here’s what happens when you don’t:

• Attorneys get frustrated with the lack of opportunity, bureaucracy, or toxic firm culture, and they leave.

• Clients follow their favorite attorney, leaving the firm weaker than before.

• The firm struggles to recruit because talented lawyers hear about the firm’s poor culture and avoid it.

The firms that figure out how to retain talent are the ones that scale successfully.

How to Retain Top Talent in a Law Firm

If you want to scale your firm, you need a hiring and retention strategy. That means creating an environment that top attorneys want to be a part of long-term.

Here’s how:

1. Golden Handcuffs: Give People a Reason to Stay

If you want to keep top talent, you have to make leaving difficult. It means structuring benefits, compensation, and culture so that leaving is less appealing than staying.

Here’s how:

• Compelling Bonus Structures – Reward attorneys for long-term performance, not just billable hours.

  
  

• Profit-Sharing or Equity – Give key attorneys a real stake in the firm’s long-term success.

  
  

• Phantom equity for non-attorneys, so you can attract those A-Players to help in leadership roles.

  
  

• Work-from-Home Flexibility – Many employees value work-life balance more than money.

  
  

• Autonomy & Leadership Opportunities – Give top attorneys and non-attorneys a pathway to leadership. The “wait 10 years to make partner” model is getting really old.

  
  

• Continuing Education & Growth Opportunities – Employees want to grow. Firms that provide mentorship, skill development, and career growth retain more talent.

2. Build a Positive Work Culture

Lawyers don’t want to work with toxic colleagues. I’ve seen so many firms implode because of toxic cultures. Attorneys get fed up and start their own practice or join another firm with a healthier work environment.

If you want to attract and keep top talent, you need to create a work environment where people want to stay. 

Here’s how:

• Cut the bureaucracy – Stop drowning your employees in red tape.

• Encourage collaboration – Foster a culture of teamwork, not internal competition.

• Respect personal needs – Burnout leads to turnover. Prevent it.

3. Align Your Firm’s Goals with Your Attorneys’ Goals

If your attorneys don’t see long-term value in staying at your firm, they will leave.

How do you prevent this?

• Have transparent conversations about the firm’s vision, strategy, and attorney career paths.

• Offer a clear track to leadership, with measurable steps.

• Provide financial incentives for long-term loyalty.

If you can align the interests of your firm with the interests of your employees, you create a structure where everyone wins.

The Business Side of Law: Why You Need to Think Like a CEO

Law firms fail to scale because lawyers don’t think like business owners. They focus on winning cases, not building systems.

Scaling a firm is not about practicing more law. It’s about:

• Building a strong team

• Creating systems that keep the firm running efficiently

• Retaining talent so the firm grows over time

Where Firms Waste Time & Money

Most small firms spend too much time on things that don’t generate revenue:

• 77% of small law firms say they struggle with administrative tasks.

• 20% of small firms report serious struggles acquiring new clients.

• Many solo and small firm attorneys spend more time on operations than actual legal work.

If you build the right team and put the right systems in place, you can free up your time to focus on growing the firm instead of just working inside it.

What’s Next?

If you’re serious about scaling your law firm, it starts with hiring and retaining the right people.

Here’s Your Action Plan:

1. Analyze Your Firm’s Hiring & Retention Strategy

2. Create an Incentive Plan for Retention

3. Fix Your Firm’s Culture

4. Think Like a CEO, Not Just a Lawyer

Final Thoughts

The firms that win are the ones that figure out talent. Hiring is just the first step. Retaining top attorneys for the long haul is how you build a firm that lasts.

The question is, are you going to be just another small firm struggling to retain talent? Or are you going to build a firm that scales successfully?

If you’re ready to stop trying to figure it out on your own and start building a firm that grows, let’s talk.

Schedule a strategy session today. (Its FREE!)

Expert Author Bio:

Kyle Harbaugh, Founder and President of Chief Go Officers

Kyle brings strategic leadership, operations, risk, and growth experience to the legal industry while simplifying complexity and scaling with clarity. In his free time he enjoys being a husband and dad, F3 workouts, some great barbecue.