When Altruism Is Not Enough: The Economics of Well-Being in the Legal Profession
Lawyers in the UK, Australia, Europe, and the United States have something in common: rates of depression, anxiety, substance abuse, and suicide are higher in the legal profession than most other profession. Globally, over recent years, the legal industry has taken notice of its rising mental health crisis. Awareness campaigns and initiatives have been launched with efforts to decrease the stigma associated with seeking mental health care. Mindfulness and meditation are being lauded as ways to mitigate the stress of the job. Some law firms even offer benefits such as on-site counseling for those in crisis. In the UK, LawCare, a charity organization providing mental health and well-being information and resources to the legal profession, has seen a steady increase in their crisis helpline calls.
Citing the pressures of the billable hour, long hours that impact sleep and health, and an adversarial environment, Elizabeth Rimmer, CEO of LawCare does not envision those calls slowing down. That’s why other organizations like the American Bar Association in the U.S. and the MindsCount Foundation in Australia have begun to build frameworks for improved well-being and resilience within firms. Joseph Fournier, president of the talent advisory and executive search firm InveniasPartners, notes that other industries have embraced well-being as worthy of investment. He cites Deloitte and JPMorgan as companies that invest in well-being. Even the World Economic Forum in Davos, Switzerland recognizes “integrated well-being” (physical, emotional, social, and financial) as an economic driver. These are critical strides toward improved mental health within the industry. Why, then, is measurable, cultural change still lagging?
Awareness campaigns require a lower level of buy-in than does a commitment to systemic change. Elizabeth Rimmer from LawCare is encouraged by the dramatic increase in requests they receive from law firms seeking training. However, she continues on to say that when it comes to law firms operationalizing well-being within the firm, a “gap exists between awareness and strategy.” Awareness occurs at the contemplation and determination stages of change, before action actually takes place. “We are in the pioneering stage of this movement,” she explains. The ABA’s Pathway to Lawyer Well-Being articulates the reality that systemic change can only occur when there is “broad scale buy-in” for action from top leadership in law firms, law schools, and bar associations. How can the legal profession be motivated to challenge long-standing norms in order to prioritize mental well-being? The most common appeal, one of altruism and morality—that it is simply the right thing to do—is not enough on its own to create the necessary sea change.
In 2016 the American Bar Association formed the Well-Being Task Force, which issued a report on lawyer well-being in 2018. The taskforce defined lawyer well-being as a continuous process in which lawyers strive for thriving in each of the six dimensions of their lives: emotional, occupational, social, intellectual, spiritual, and physical. The ABA also created the Well-Being Pledge, calling on legal employers to recognize that substance abuse and mental health problems constitute a significant challenge in the legal profession. Signatories are encouraged to pledge their support to improve mental well-being in their workplaces. To help accomplish this, the ABA provided actionable steps to cultivate the mental well-being of legal professionals that correlate to the seven-point framework. The ABA task force’s goal was to have all legal employers sign onto the pledge by January 1, 2019. However, there have been just 164 legal employers (firms, legal departments, and law schools) who have signed on to the pledge as of January 2020, a full year beyond the original goal. These strides are to be lauded, and yet it is becoming increasingly clear there needs to be a business case made for well-being and not simply an altruistic one. Fortunately, it is not a difficult case to make.
According to the World Health Organization (WHO), depression, anxiety, and substance abuse is said to cost the global economy $1 trillion annually in lost productivity.
Within the legal industry, rates of depression, anxiety and substance abuse are close to four times the rate than in other professions, making the lion’s share of the $1 trillion loss likely to fall within the legal domain. Absenteeism and “presenteeism” (employees who are physically at work, but are unable to fully function) create economic strain on otherwise successful enterprises. The cost goes beyond lost productivity, however. Untreated mental illness and substance dependence are associated with higher rates of heart disease, diabetes, chronic pain, and other costly medical conditions. Investing in well-being through initiatives, programming and benefits is shown to yield a large return. The WHO shows that for every $1 invested in the treatment of common mental health disorders, there is a $4 return on investment in improved health and productivity.
Beyond absenteeism and presenteeism are the high rates of attrition in the legal profession, particularly of associates. The costs incurred from lawyers who leave their jobs (or the profession altogether) can significantly cut into a law firm’s profit margin. According to the National Association of Legal Placement (NALP), 44% of all associates in the U.S., both entry-level and lateral hires, leave their firms within three years. Attrition rates are as high as 81% in the first five years for entry-level associates, according to JD Match and Right Profile. Reasons cited for departure include intense time demands, toxic work culture (including bullying and harassment), and lack of professional-personal life balance. How does this translate to cost? By JD Match and Right Profile estimates, replacement costs are one and a half to two times the departing lawyer’s compensation. This can quickly cost a firm $400,000 USD (£0.31M/€0.36) or more for each associate who leaves. Considering the current attrition rates, annual cost of this loss in a 500-lawyer firm could reach $34 million USD. Pulling the lens back further, $9.1 billion USD is lost annually to attrition in the top 400 firms in the United States alone.
Then there are the harder-to-quantify contributors to profitability loss. In a joint study by the ABA Commission on Lawyer Assistance Programs and the Hazelden Betty Ford Foundation, 40-70% of all disciplinary and malpractice hearings involved lawyer depression, anxiety, substance abuse, or a combination of these factors. This translates to monetary loss directly related to the malpractice; firms also sustain damage to morale, productivity and reputation that indirectly impacts profit. Even without lawyer behaviors slipping into the realm of malpractice, clients are becoming more attuned to the quality of work (or lack thereof) by frayed-nerved, sleep-deprived attorneys. Recently, a partner of an Atlanta law firm shared that he received a phone call from a client one morning. The client reported getting an email from an associate time-stamped 2:35 a.m. “You might think that the time of the email impressed me or showed me the associate’s dedication,” said the client, “but it didn’t. It worried me. No one is any good at 2:35 a.m.” The client cares little that the associate was trying to meet a 2,000 billable hour target for the year. The client cares about having a lawyer they can trust to protect their interests through the quality of their work.
The billable hour helps to perpetuate a system that discourages efficiency and encourages the churn and burn that results in middle-of-the-night emails.
A cynical view of lawyer attrition rates is that it is simply the collateral damage to an otherwise profitable model. And while the billable hour is still king, more clients are seeking alternative fee arrangements that promote efficiency and productivity. Long hours, which are the norm with the billable hour, do not equal productivity; indeed, quite the opposite. A study published in the American Journal of Epidemiology showed that those who worked even just 15 hours more than the traditional 40-hour work week scored lower on cognitive tests measuring short term memory and fluid intelligence, such as problem solving and abstract thinking. It goes without saying, these cognitive functions are critical to lawyers’ abilities to practice their craft. Management consultant Tim Corcoran reports that “While private practice lawyers tend to recognize how unhappy the billable hour model makes their clients, it persists because the lawyers think it’s good for them. It’s not and never has been. While other businesspeople rely on their expertise to generate profits while they sleep, lawyers seek profits from working ever-longer hours, which is the exact opposite of profiting from experience. This is why the legal market is ripe for competitive disruption.” If we can take away the incentive to bill 10 hours for a job that could be done in 6, we will have more lawyers at their functional best—physically, mentally, and emotionally.
There must be a continued appeal to the moral and ethical case for improving the well-being of lawyers and other professionals who are negatively impacted by an often-punishing career. It truly is the right thing to do. But we must also couple that altruistic appeal with a solid business case that provides justification for long-term financial and structural investments in well-being.
About the Author Renee Branson is the founder and principal at RB Consulting. Combining 20 years in education, counseling, and non-profit management, her passion and purpose is helping individuals, teams, and organizations cultivate resilience. After years of working with survivors of trauma she now teaches others the skills of resilience for workplace well-being as a Certified Resilience Coach