Why Mid-Size Law Firms Need To Reimagine How They Recruit, Retain, Reward & Retire Top Talent.
The legal industry is steeped in tradition, yet it is facing unprecedented disruptions. Now, mid-size law firms (25–150 attorneys) find themselves at a crossroads. Prestige and legal acumen alone are no longer enough to guarantee success. Firm leaders today are grappling with structural and demographic challenges that threaten long-term viability: difficulties in recruiting and retaining both junior associates and seasoned rainmakers, an aging partnership without clear succession plans, outdated 401(k) retirement platforms ill-suited to partnership models, and a lack of viable exit strategies for senior partners.
This article explores those pressing issues—supported by industry research, expert insights, and validated statistics—and makes the case for modernizing how firms recruit, retain, reward, and retire top legal talent as a strategic imperative.
The High Cost of Turnover in Talent and Clients
Associate turnover reached an all-time high of 24% in 2021, compared to the historic norm of under 20% (NALP, 2022). According to Thomson Reuters’ 2022 State of the Legal Market report, replacing one associate can cost between $200,000 and $500,000, factoring in lost billable hours, recruiting, and training. It is even more expensive when the departure is an attorney or partner with a loyal book of clients.
At the partner level, costs escalate further. When rainmakers depart, client revenue often departs with them. Michelle Rogan, writing for INSEAD Knowledge, found that in relationship-based services, “clients are attracted to the human assets of the firm,” making departures a serious client retention risk (Rogan, 2014).
A Demographic Storm: Aging Partners and Succession Gaps
The American Bar Association (ABA) reports that:
- 14% of lawyers in the U.S. are over the age of 65—twice the percentage of the broader workforce (ABA, 2022);
- Yet only 31% of firms have formal succession plans; and
- 63% of firms acknowledge that partners aged 60+ control at least 25% of firm revenue (Altman Weil, 2019).
Many firms continue to operate as collections of individual books of business, not as cohesive entities with collective strategy. As Bruce MacEwen noted in “Growth is Dead,” this siloed, eat-what-you-kill mentality contributes to retention problems and hinders leadership development (MacEwen, 2013).
Consultants like Eric Seeger of Altman Weil have long warned that failing to plan for partner transition is a “clear and present danger,” especially as Baby Boomers age without a funded or firm-supported retirement path (Altman Weil, 2015).
Why Traditional 401(k) Plans Fail Law Firms
Standard 401(k) plans often fail mid-size law firms due to partner-heavy compensation structures. IRS nondiscrimination testing limits contributions for high earners if firm-wide participation is low. According to Aon’s 2021 report on law firm retirement practices, many firms forgo employer matching altogether to avoid compliance headaches—hurting recruitment efforts among younger lawyers (Aon, 2021).
In addition, contribution limits ($23,000 for employees under 50 in 2025, plus a $7,500 catch-up) often fall short for partners in their peak earning years. Firms that delay adding defined benefit plans or supplemental non-qualified deferred comp options leave senior attorneys underprepared for retirement and less willing to relinquish equity.
Rethinking Exit Planning: From Afterthought to Advantage
Mandatory partner retirement remains controversial, yet over 60% of AmLaw 100 firms use some form of retirement policy to ensure turnover and reduce succession friction (Major, Lindsey & Africa, 2019). Without such structure, transition planning is often avoided—until a partner leaves abruptly, sometimes to a competitor.
Altman Weil’s data shows that 47% of firm leaders have ranked Boomer retirements as their top long-term concern, yet few have formal timelines or financial tools in place to support this group (Altman Weil, 2011). Meanwhile, younger partners hesitate to commit to firms that offer unclear or unfunded paths to retirement, creating a leadership vacuum that contributes to lateral defections.
A Purpose-Built Solution: The ASG Law Firm Benefits & Planning Platform
Modernizing how law firms manage talent isn’t easy, but it has become essential. Recognizing this, Advanced Strategies Group (ASG) developed the Law Firm Benefits & Planning Platform as a comprehensive solution tailored specifically for firms seeking to align their people strategy with long-term business goals.
And our roots run deep.
After decades of success delivering integrated qualified, non-qualified, wealth management, and exit planning strategies to traditional corporate markets, ASG made a deliberate and strategic decision in 2024 to focus on mid-size law firms. Why? Because we recognized that many of the most pressing challenges law firm leaders face today—talent retention, succession gaps, and outdated benefit structures—are exactly the types of issues we’ve solved in complex business environments for years.
Our pivot wasn’t opportunistic; it was purposeful. We saw an underserved market where the stakes are high, the need is growing, and the traditional solutions fall short. Law firms may be unique in culture and compensation, but the underlying mechanics of human capital—attraction, engagement, and continuity—are universal.
That’s why ASG brings to law firms a modular, consultative platform designed to:
- Reimagine retirement planning through an innovative Open(k) plan design that better fits partnership demographics and compensation structures.
- Lock in loyalty via a Strategic Retention & Rewards Program for both associates and rainmakers.
- Create paths to partnership for potential future leaders of the firm.
- Support attorneys across their careers with the four-tier Attorney’s Edge Planning Platform.
- Provide structured, confident, and respectful exits through a S.M.A.R.T. Strategies framework.
And we do it the way we always have: No hard selling. No off-the-shelf shortcuts. Just deep discovery, strategic design, and long-term partnership.
Because for us—and for our clients—“Prescription before diagnosis is malpractice.”
The Time to Modernize Is Now
The legal industry isn’t just changing. It’s evolving quickly. Firms that treat their people strategy as an afterthought will find themselves outpaced by competitors who understand that talent IS the business model.
Whether you start by addressing retirement, retention, or succession, the key is to start. With the right structure, law firms can convert disruption into advantage and build a future where great lawyers don’t just join the firm. They stay, grow, and eventually leave on their terms, with their legacy intact.
The firms that dominate tomorrow are modernizing today.
Is yours?
Learn more at www.mystrategyteam.com and begin your discovery journey with ASG.
The information given herein is taken from sources that IFP Advisors, LLC, dba Independent Financial Partners (IFP), IFP Securities LLC, dba Independent Financial Partners (IFP), and its advisors believe to be reliable, but it is not guaranteed by us as to accuracy or completeness. This is for informational purposes only and in no event should be construed as an offer to sell or solicitation of an offer to buy any securities or products. Please consult your tax and/or legal advisor before implementing any tax and/or legal related strategies mentioned in this publication as IFP does not provide tax and/or legal advice. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation, or needs of individual investors. This report may not be reproduced, distributed, or published by any person for any purpose without IFP’s express prior written consent. Securities offered through IFP Securities, LLC, dba Independent Financial Partners (IFP), member FINRA/SIPC. Investment advice offered through IFP Advisors, LLC, dba Independent Financial Partners (IFP), a Registered Investment Advisor. IFP and Advanced Strategies Group are not affiliated.
References
- ABA Profile of the Legal Profession. (2022). American Bar Association.
- Altman Weil. (2011–2019). Law Firms in Transition Surveys.
- Aon Professional Services Practice. (2021). Retirement Planning for Law Firms.
- Major, Lindsey & Africa. (2019). Partner Retirement Policy Trends.
- MacEwen, B. (2013). Growth is Dead: Now What? Adam Smith, Esq.
- National Association for Law Placement (NALP). (2022). 2021 Associate Attrition Report.
- Rogan, M. (2014). Keeping Clients When the Rainmaker Leaves. INSEAD Knowledge.
- Thomson Reuters. (2022). State of the Legal Market.