has resulted in millions of individuals changing jobs since 2021, a mobility trend in the workforce with no apparent end in sight. This trend of workforce turnover has reinforced the need for companies to actively take steps to prevent the loss of any privileged and confidential information that may be in the hands of soon-to-be-former employees.

Here are some questions that employers should be asking:

How does the attorney-client privilege apply in the corporate setting?

The attorney-client privilege protects the confidentiality of communications between clients and their attorneys for the purpose of obtaining legal advice. The attorney-client privilege covers verbal and written communications, such as emails, letters, or memos, depending on the content of the communication.

The privilege can arise within the corporate setting when a company engages in-house or outside counsel to obtain legal advice. However, the privilege is not absolute and, depending on the circumstances, can be waived.

How does an employee’s resignation affect privileged information?

Depending on the nature of their job, an employee may have access to privileged information from their employment. This access may take different forms, such as hard copy documents or electronic access to files containing privileged information.

If an employee resigns, their personal and professional interests may no longer align with that of the company and can even run counter to it, particularly if the employee leaves to work for a competitor. At that point, a company’s ability to track and recover privileged information — once accessible to or held by a former employee — becomes more difficult, especially where the former employee no longer uses the company’s servers, networks, and equipment. As a result, the risks of misusing or improperly disclosed privileged information increases because of an employee’s resignation.

A company needs to be aware of the risk of waiving the privileged status of information that remains held by or accessible to a former employee. Otherwise, a company creates an unnecessary risk that a former employee’s access to, or possession of, privileged information creates a privilege waiver. For example, a company risks waiving the attorney-client privilege if it enables a former employee to keep privileged documents and neglects to undertake efforts to re-obtain the documents once it determines that the employee had maintained possession.

What precautions should a company take to avoid losing privilege protections?

Recent have required that employers take adequate and reasonable measures to preserve the privileged status of their documents. As a result, a company should proactively take and — where possible, document — its efforts to help prevent a waiver of the attorney-client privilege for information held by or accessible to a resigning employee.

To avoid this risk, a company should determine whether and to what extent a resigning employee has access to or holds privileged information. It also should also remind a resigning employee of any confidentiality policies or agreements, terminate the employee’s access following the employee’s resignation, and request that the employee return and verify in writing that the employee does not possess any privileged materials. The company should also be prepared to promptly enforce these policies or agreements, if necessary.

If the company later determines that an employee continues to hold privileged materials, it may need to consider sending a cease-and-desist letter or, worst-case, engaging in litigation.

Are there other legal protections to consider for confidential information?

A company should also review applicable federal and state laws and other existing protections to determine if the resigning employee possesses — or has access to — other confidential or proprietary information. The company should then review and undertake all efforts to preserve any confidentiality protections.

For instance, a company should consider whether any of the information accessible to or held by a resigning employee qualifies as a confidential trade secret under federal or state law. The protects trade secrets that are used in or intended for use in interstate commerce. Most states have adopted the Uniform Trade Secrets Act, which also protects information qualifying as a trade secret. Other protections may also exist under federal or state law.

Under the trade secret statutes, however, the definition of a trade secret is broad. For example, the includes information such as a company’s customer lists, business strategies, inventions, or techniques within the definition of a trade secret. However, as a federal appeals court recently recognized, determining whether and to what extent a company can rely on trade secret protections under federal or state law may depend on if the company has taken reasonable efforts or measures to protect its trade secrets.

As a result, the protection available to a company may depend on how it sought to protect its trade secrets after an employee submits their resignation and ultimately leaves from the company.

You can about protecting employers’ privileged communications, trade secrets, and other confidential information here.

We hear about the “Great Resignation” in the legal industry, which refers to all attorneys not just associates. And clearly, this on-going pandemic has changed some attorneys’ attitude towards staying at their current workplace; but if you think associates have new demands, you would be wrong. They have always asked for what they want — the difference now is they hold the cards.

This situation has left law firms scrambling to retain associates as they face an inevitable talent war. So, let’s explore associate retention.

As a matter of precedent, law firms use money — in the form of annual bonuses and salary increases — as their primary retention strategy. There are countless studies that repeatedly conclude that people do not stay with an employer for the long term because of compensation. Instead, they stay, and they leave, for a wide variety of tangible and intangible reasons.

For example, a lack of quality or challenging work is often at the top of the list as a reason for departure. (In a 2017 NALP survey, this was listed as the number one reason.) Last year, many media reports suggested that return-to-office requirements were causing attorneys to jump ship.

Here is a partial list of other reasons for attrition gathered through exit interview analysis and other research studies:

• • • not having enough responsibility;
    • not receiving enough client contact;
    • absence of business development opportunities;
    • lack of partnership prospects;
    • desire for less pressure to attain partnership;
    • disregard for leadership/management skills training;
    • working with unpleasant colleagues;
    • work/life imbalance; and
    • lack of mentoring, coaching, sponsorship, feedback, communication, etc.

All the reasons above have been around for decades, and some firms have tried, and failed, to address these causes. Kudos to the firms that have made efforts, employed “helping” professionals, and implemented initiatives that have at their core the goal of retention.

Here are the highlights of what initiatives that law firms have implemented over the past 20 to 30 years to retain associates:

• • • created a professional development initiative;
    • offered substantive legal and/or management training;
    • used an assignment management system;
    • acknowledged alternative career paths;
    • implemented mentoring and/or sponsorship programs;
    • established policies that support work-life issues;
    • provided internal or external coaching services;
    • extended outplacement services to attorneys who were asked to leave; and
    • conducted exit and/or stay interviews.

For the fun of it, let’s add a list of actions that law firms do or have done that have no measurable long-term impact. These would include:

• • • increasing salaries and bonuses;
    • providing collaborative workspaces;
    • offering perks; and
    • launching engagement surveys.

Now a list of actions that firms had resisted until the pandemic, but associates have asked for repeatedly:

• • • installing technology that supports their practice;
    • allowing remote work; and
    • accepting flexible schedules.

Investing in happiness

Given all this, what’s a law firm to do during the current Great Resignation and talent wars?

First, go back to basics. What keeps people happy at their jobs? Much research points to supporting individuals in their career and personal goals. An employee who feels their employer is invested in them will be in turn, invested in their firm.

“Firms that conduct stay interviews learn the reasons associates stay, which often include having a good mentor and feeling the firm is grooming them for a successful career,” says Fiona Trevelyan Hornblower, president and CEO of the NALP Foundation.

Unfortunately, sometimes the dynamics, politics, and cultures within some firms impede the success of initiatives that have proven to be successful elsewhere.

One solid strategy is investing in associates’ futures by offering skills growth, whether it be in substantive law or practice management topics. For example, Canadian law firm Torys has embraced this approach by offering a business leadership program in collaboration with the Rotman School of Management at the University of Toronto. Milbank and other law firms have been doing this for some time now. And Sidley Austin recently announced their MBA-style program, with attendance counting towards billable targets. (Associates often ask for billable equivalency when asked to do non-client work.)

Outplacement was dabbled with back in the earlier 2000s and has reemerged through a new approach: coaching. Internal firm coaches can help place associates with clients or in other jobs, according to Rachel Marx Boufford, a former Am Law 100 law firm career counselor. “Counterintuitively, when these programs are well-run, they can actually serve to improve associate retention,” she adds.

There are countless studies that repeatedly conclude that people do not stay with an employer for the long term because of compensation. Instead, they stay, and they leave, for a wide variety of tangible and intangible reasons.

In the past, many firms outsourced their outplacement efforts, but bringing them in-house through coaching initiatives demonstrates the firm’s desire to help associates throughout their careers. Sheryl Odentz, founder of Progress in Work, a legal outplacement firm, agrees. “Whether through in-house or outside services, outplacing an attorney in a positive fashion is not only smart business on the part of the organization, but it also creates goodwill and is often appreciated by the departing attorney.”

Creating new titles for associates is another tactic, yet again, this is not new. And firms such as Sidley Austin; Orrick, Herrington & Sutcliffe; Dentons; and Foley & Lardner among others, use various titles to distinguish between levels of associates. Bestowing titles on individuals is a type of recognition that researchers have found increases positive feelings towards an employer. However, when a title does not reflect the job duties, the tactic can backfire. For example, if an associate has the title of Managing Associate, but they are not managing others nor have received training in how to manage others they may begin to feel the title is meaningless.

Circling back to the theory that employees stay with employers that the employee believes invests in them, let’s take the leap to say employers should care about their employees beyond health-insurance-led wellness programs. During the pandemic (and even before), the push for mental well-being initiatives has taken off. Firms signed on to and publicized their commitment to mental health awareness. Yet, the needle has not moved.

Indeed, the International Bar Association issued a report stating, “individual legal professionals do not perceive firms and organizations as responding effectively to issues affecting mental well-being.” Programs are good attempts to show the love, but what firms really need to do is change the entrenched behaviors of firm partners and leaders.

Retention strategies should start from the first day of an associate’s employment and include open dialogue regarding career goals, home life, work challenges, and the ongoing impact of the pandemic. These open conversations between associates and partners builds the foundation of trust which fuels retention.

“This is not about being nosy or stepping over the line,” says Gerry Riskin of Edge International. “It’s about opening the door so others can open it further and welcome them in.”

To begin to unpack how some of these issues may shape 2022, the Thomson Reuters Institute brought together its team of in-house industry experts to explore the peculiarities of each of these key groups and address how each group might face some of the talent challenges this year.

on the , hosted by ¶¶ÒőłÉÄê’ Talent, Culture & Inclusion Strategist Natalie Runyon, who opens the latest episode by saying, “given the tight labor market the corresponding Great Resignation or Great Reshuffle
 we are going to start with talent.”

You can here.

Looking at the potential impact of 2022, Bill Josten, who manages legal industry and law firm content, explains that many law firms are looking for precedent examples of what other firms are doing to address the challenge of recruiting and retaining top talent, but unfortunately, there aren’t a lot of examples to follow. Everyone is struggling with these questions right now, Jostens says, which puts law firms in a more experimental stage, trying to determine what path to follow. This is likely to be the case for a much of the year as these questions persist.

Nadya Britton , who managers tax & accounting industry content, offers her perspective that “tax & accounting firms are unique in that they’ve had a talent problem since before any article [on the subject] was ever written
 . It’s an industry where people don’t do a lot of movement so there aren’t spaces created for people advancing.” Indeed, many accounting firms are choosing to focus on skills-related topics like client communication, building efficiency, effectively leveraging technology, and client service, among others, Britton adds.

And to close the episode, Gina Jurva, manager of both government and corporate content, echoes that much of what has been said with regard to law firms and tax practices also applies to corporate legal departments, financial institutions, and government agencies, but adds that there are also additional areas of focus to be aware of in these areas, particularly the growing importance of a focus on environment, social, and corporate governance (ESG) questions.

“[W]hen we think about ESG, I would say we cannot deny the importance of environmental issues, human rights across the globe, social justice, and of course, governance, meaning you have to have that buy-in at the top the board, C-Suite, senior leaders and government officials,” Jurva says.

No doubt, there are myriad questions related to talent on the horizon for 2022. Even in disparate industries like those covered in this podcast, there will be a high degree of commonality for the problems faced. And for leaders in those businesses and agencies who are watching steps taken by other segments of the market, perhaps there will also be commonality in some of the solutions for stabilizing the workforce.

“The labor shortage in the accounting profession continues to have a major impact on nearly every firm,” the study reports. “Firms have to balance getting good utilization out of staff while simultaneously creating a positive work environment — and minimizing burnout — to retain top talent.”

Charles Hylan, lead author of the survey and a managing director at , a consulting firm that publishes the study, says labor issues are weighing heavily on the minds of accounting firm leaders. “I have facilitated a dozen retreats (with accounting firms) this summer and, without exception, firms are trying to understand how they can deal with the labor shortage in the profession,” Hylan writes in the report. “Unfortunately, this issue will only get worse before it gets better, and firms need to think outside the box about how they will get work out the door.”

The study found that revenue at the average accounting firm increased just 5.7% in 2020, the slowest growth in eight years – and suggests that the labor shortage played a role in that. “Looking forward, firms are much more interested in how they will handle the work than they are in finding new revenue,” the report states. “We would not be surprised if there is a continued downward trend that is intentional: culling clients and limiting growth in order to deal with the staffing shortage.”

To address this challenge, accounting firms are exploring a number of strategies to recalibrate workload, recruit and retain staff, maintain operational stability, and re-assess expectations regarding sustainable growth, revenue, and profitability, according to the study. Some of these strategies include:

• • • Culling clients to reshape the firm’s book of business. “The severe labor shortage
 allows firms the opportunity to systematically — and kindly — reduce the number of clients that fall outside their ideal client profile and clients who are difficult to deal with,” the study notes.
    • Increasing the use of outsourcing. “I am seeing more and more firms research and use offshore, and some onshore, resources to augment their limited staffing,” Hylan writes.
    • Hiring non-traditional professionals and graduates.
    • Investing more resources in recruiting, retention, and staff development.
    • Pursuing mergers and acquisitions to help with leadership succession issues and obtain more resources.
    • Adding administrative staff and rethinking internal roles and responsibilities, including an increased emphasis on delegation.

The Rosenberg Study includes commentary from 16 accounting industry consultants, many of whom addressed the implications of the labor shortage.

Jennifer Wilson, Convergence Coaching — Business clients have needed more guidance during the pandemic, which increased pressure on firms’ “brightest minds,” Wilson observes, adding that this left firms overwhelmed, “because the brightest minds were already pretty busy with their ‘normal’ work and also short-staffed coming into the pandemic. So, today’s profession is filled with people who are struggling with burnout, feeling overwhelmed, and even potentially hopeless as demand for help remains high, and the labor resources to fulfill those services remains low.”

Wilson says has been a “nightmare for the already resource-strapped accounting profession, and firms are now scrambling to retain their team members with stay-bonuses, record raises, promotions, and other perks.”

She advises firms to:

• • • Cull clients that no longer fit their “ideal target.”
    • Provide a flexible workplace. “Implement a completely flexible work program with work-from-home, work from the office, blended work, work from anywhere, work anytime, unlimited [paid time off] PTO, and more,” she says.
    • Assign their best career advisors to manage their best staffers.
    • Conduct “stay interviews” to understand what team member are happy with, what they’re struggling with, and how to help them thrive.
    • Conduct a salary study and make market adjustments. If the necessary increases are too big to achieve at once, Wilson advises firms to award some of it as a performance bonus based on specific, measurable goals.
    • Go after talent in any geography.

Art Kuesel, Kuesel Consulting — “We cannot risk additional fatigue and burnout, and so firms are reassessing what constitutes an ideal client,” Kuesel writes. “They are strengthening their filters, raising their minimums, and questioning the client acceptance criteria. Often this does translate into culling of existing clients, as well. I suspect this will create a small cascade of client movement from larger to smaller firms.”

Carl George, Carl George Advisory – George suggests accounting firms should:

• • • Be more creative with flexible work arrangements, and train young staffers to succeed and supervisors to lead in the new model.
    • “Stop giving lip service to client culling. Cull to create capacity for higher-value clients and simultaneously improve firm morale.”
    • Re-evaluate all operational and client service practices and adopt methods to maximize efficiency, timeliness, and profitability.

Tamera Loerzel, Convergence Coaching — “Make changes to smooth out the big peaks and valleys that come with deadlines and compressed busy periods,” Loerzel notes. “Rework your organizational chart and innovate new positions, such as a ‘tax client coordinator’ to manage clients and take some of the many tasks from your CPAs.” She also suggests running pilot programs involving fractional employees, offshoring, or temporary positions, and assign one person to own this process when people come on board, treating these special-position workers like an employee for onboarding, training, and managing. “Invest in more digital, technology, or business analyst roles to expand your data analytics internally and for clients,” Loerzel adds.

“With remote [working] here to stay, examine your recruiting strategy to allow for the borderless reach it offers for talent acquisition. [This] allows you to find talent outside your local geographic market, especially for those specialty technical skills or industry experience you’re probably looking for,” she observes. “It also allows you flexibility as your team members have opportunities to move away, too.”

More than 40% of workers around the world said they are considering quitting their job or changing their profession, according to research conducted by Microsoft. “We’re on the brink of a disruption as great as last year’s sudden shift to remote work: the move to hybrid work — a blended model where some employees return to the workplace and others continue to work from home,” the report stated.

What do employees and employers want?

Recruitment agencies on both sides of the table have outlined a situation around returning to the office that differs between employees and employers:

Employees see several key issues at the forefront of returning to the office, including:

• • • As organizations slowly begin to ask their staff to return to the office, many employees aren’t willing to do so, at least not full-time, and not yet.
    • Employees say they want their life back and want to shift to “work to live” not “live to work.”
    • The average employee is seeking a hybrid work model, looking for people interaction (part-time), combined with the ability to work remotely.
    • Simultaneously, employees are feeling burnt out. The lack of work/life separation over the pandemic has caused more fatigue. They want policies about responding to emails late into the evening and weekends; and many are looking for pay increases or bonuses to reward them for their hard work. Often, they rationalize this because employers do not need a physical space for them full-time.

Employers, on the other hand, see the situation differently:

• • • Employers can’t (or won’t) make large pay increases, because they anticipate extra technology expenditures for the hybrid work model; they can’t reduce office space immediately; and many organizations lost revenue during the pandemic.
    • Baby boomers who didn’t need to retire are choosing to finally do so because they don’t want to be bothered with the hassle of hybrid co-workers, plus, many worry about COVID-19 protocols in the workplace, such as non-vaccinated employees and clients, and other workplace concerns like the return of a 60- to 90-minute commute each way, and the sticky world of office politics making a comeback.

When most employers only invest in 2% to 4% of their total expenditures in training and development — and then often only at the executive level — it’s easy to see why their staff might feel under-appreciated.

“When employers invest in team and leadership development, they create more productive and profitable employees, not to mention tenure longevity,” says Jennifer van Amerom, CEO of Refine Management and VP of Revenue Operations for . “Happy employees are tougher to poach by the competition.” van Amerom, alongside her partners at Vivo Team, have always worked 100% remote. “During the pandemic we trained large management consulting firms on how to sell to their customers, train their staff, and work as a team, all remotely — largely in part because we are able to lead by example,” she explains.

Yet, that experience may be more the exception. The professional services industry has historically operated from a traditional workplace model — typically, all staff are in office, everyday, and many log overtime hours on a regular basis. That dynamic, van Amerom adds, may have to change.

“Work environments are constantly changing and need to continue to change,” she says. “It’s not a new request for employees to request work from home days, or employers to request all staff be in office to create company culture. What’s different this time is how team resilience is finally being put to the test.”

What’s changing in the legal industry?

Given the upheaval of the global pandemic and the reality of the Great Resignation, the level of change within the industry is huge, especially around areas like talent, work demand, and returning to the office.

Obviously, many U.S. law firms are desperate for good legal talent. Indeed, many firms have recruited north of the border, hiring Canadian lawyers into their firms. And many more firms are playing catch-up with the pandemic. Associate hiring decreased nearly 50% between 2019 and 2020, according to the NALP Foundation for Law Career Research & Education, based on its survey of 126 law firms. Fast-forward to 2021, and far from cutting back on hiring, many firms are now scrambling to attract and retain associates — as recent headlines on associate compensation have indicated.

Jane Aquilina, a legal search specialist for a boutique legal search firm says her firm is “extremely busy in this business climate” and is receiving job requisitions and targeted searches from law firms on a daily basis.

More change is surrounding returning to the office more than any other subject, of course, with vaccine requirements, masking, and social distance requirements being chewed over by many law firms. For example, Schiff Hardin pushed back its reopening date from September to November; and firms like Davis Polk, Reed Smith, and Fried Frank are requiring employees to be vaccinated. So much of this is in flux at the moment, that it’s difficult to discern where it’s all going to land at this point.

The professional services industry has historically operated from a traditional workplace model — that dynamic may have to change.

On the work front, legal demand has remained strong and there has been increased activity in certain practice areas. There has been an increase in large litigation matters being put out to bid, and many law firms are now swamped with Request for Proposals (RFPs) of all sorts from clients, especially in areas security, employment & labor, real estate, and bankruptcy, according to several law firm proposal professionals.

Interestingly, there has also been an increase in panel firm RFPs — those requests for law firms to potentially join a client’s panel of most-often used firms. Bids requested in several practice areas are not uncommon, but the fact that panel firm bids are on the rise again could indicate that some law firms failed to provide clients with the needed strategic advice during the height of the pandemic.

Overall, it cannot be overstated how much the legal industry changed during the pandemic and will continue to change going forward, especially in how employees now view their relationship with work. As the Microsoft report noted: “We’re all learning as we go, but we know two things for sure: flexible work is here to stay, and the talent landscape has fundamentally shifted. Remote work has created new job opportunities for some, offered more family time, and provided options for whether or when to commute. But there are also challenges ahead.”

How law firms adapt to those challenges and how they accommodate employees will make all the difference in their performance during this post-pandemic phase.