Engaged Employees Increase Firm Profitability

Hand drawing a graph showing increased profitability

Increasing Profitability

The ultimate success of a law firm, or any workplace, is driven by the everyday actions of its people. When employees are engaged, their value within the law firm can be immeasurable as they regularly invest efforts that go above and beyond their job descriptions.

As Janet Ellen Raasch writes in her 2011 summary of a presentation on employee engagement, “A truly engaged employee is one who believes so strongly in an organization that he or she invests discretionary effort in its success.”

Employees that are actively engaged in what they do are more loyal and care more about the firm and its clients. When a firm has an engaged workforce, they should naturally see major improvements in their bottom line. Increased retention of talented employees, lower employee turnover costs, and longer-lasting client relationships are just a few major results of active engagement that directly raise profits.

Raasch demonstrates in her summary just how much an engaged workforce can amplify revenue streams:

According to a study of a large professional services firm by the Hay Group, the firm’s five most-engaged regional offices generated 43 percent more revenue per consultant (think lawyer) than the firm’s five least-engaged offices.

“According to Colorado Bar Association statistics,” said Wegscheid, “the average attorney has $446,500 in billable hours per year. A 43 percent increase adds an additional $191,995 to this amount, for a total of $638,495 per lawyer. That translates into $1.9 million extra for a firm of 10 attorneys, $3.8 million for 20 attorneys and $5.8 million for 30 attorneys. This is a lot of money.”

Unfortunately, no definitive plan exists for law firms to immediately transform into the best legal workplace and enjoy a 43 percent jump in productivity. However, identifying the value of employee engagement is a perfect first step.


Eileen Edmunds Eileen Filliben Edmunds serves as Managing Partner of ModernThink  LLC.  She received her law and M.B.A. degrees from the University of Virginia. Her particular expertise is using proactive people practices to reduce enterprise risk and gain a competitive edge.