Palmina Fava Joins Other Leading Thinkers to Re-examine Law Firm Compensation, Recruitment and Retention
The obstacles that the COVID-19 pandemic created for the American legal system are glaringly obvious, and lengthy trial backlogs and canceled court hearings are chief among them. But two of the biggest challenges the traditional law firm business model faces in 2022 are even more fundamental: managing expenses – particularly compensation – and attracting and retaining lawyers.
Addressing these complex issues will require both innovative thinking and creative tactics, Palmina Fava, a New York-based partner at Vinson & Elkins, explained. Her insights were expressed during a Feb. 4, 2022, forum titled “Firm Strategies and Business Models” organized by Fordham University School of Law. Fava is a Fordham University School of Law alumna, who graduated with honors in 1997. Today, Fava has a varied and international practice, including representing companies in internal investigations, litigation and corporate governance and compliance counseling. Part of Fordham’s “Structural Issues in Law Firm Management” series, the event also included panelist Stephen Allen, who focuses on business-of-law issues at the legal consulting firm Elevate.
To survive and thrive, firms must factor marketplace shifts into their strategies for attracting and retaining talent and the compensation packages they choose to offer. The policies that come about as a result influence a firm’s ability to attract talented new associates and to nurture home-grown talent, the panel noted.
Often, what entry-level lawyers are looking for is vastly different from the expectations of a partner-level hire. Fava told the audience when she began her own career, she was far more interested in the kind of work she would be doing and how it would help her grow, than she was in partner compensation.
Particularly in saturated markets, if two firms offer the same entry-level salaries and invest the same time and effort in training, their appeal to new hires will come from the approaches that differentiate them.
“The key is to focus on that and examine what people want beyond a paycheck,” Fava said. Those desires may range from leadership opportunities to time for pro bono work and, for millennials, greater flexibility for remote work than previous generations demanded.
“There has to be something more,” Fava said, “and it has to be part of that strategy discussion.”
Operating costs in the COVID era are increasing. This is due to multiple factors from higher salary demands to rising insurance premiums and costly leases for office space rendered unnecessary by the pandemic, said Fava.
While many industries are facing similar challenges, participants agreed the calculus for law firms is, and always has been, more complex: They are simultaneously businesses with a bottom line and professional services organizations dedicated to meeting the needs of their clients.
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.