The ROI of Attorney Development

Most of us understand that investing in the development of the lawyers in our firms and companies makes good sense. Teaching or reminding everyone from the newest associate to the most-experienced counselor how best to communicate with other attorneys and with clients, manage their time, and get superior work-product from themselves and those they oversee seems intuitively like something worth doing.

But how do we know development programs work? Is it possible to measure the return on such an investment so that we can justify the cost in money, time, and other resources?

Determining the value of professional development in quantifiable terms can be a frustrating exercise in subjectivity – particularly when you don’t have a solid metric like increased sales numbers or a surge in new clients by which to measure purported success.

A 2010 study[1] attempted to estimate monetary return on development investment, or “RODI,” using utility analysis. The study provided a means by which companies could estimate a dollar value associated with making professional development investments.

Specifically, it formulated an equation: RODI = (N)(T)(d)(SDy) – C

·      N = the number of participants in the development program

·      T = the number of years during which a change in professional behavior could be expected

·      d = the average difference in outcomes between trained and untrained employees (determined to be .52 by additional research[2])

·      SDy = the value of one standard deviation of performance or 40% of an individual’s salary

·      C = the total cost of training the expected number of participants

As a basic example, a firm that put 10 people through a professional development program, anticipating improvement over 3 years, with average participant compensation of $500,000 and a program cost of $50,000, the RODI would be 10(N) x 3(T) x .52(d) x 200K (40% of $500K)(SDy) - $50K(C), or approximately $3.1 million.

Now, this type of calculation can seem a little abstruse. But what it does show is that even if you tweak these numbers a bit (say, for opportunity cost on training days, etc.), there is still a large financial upside to professional development training.

To achieve the best RODI possible, you will want to be sure you invest resources wisely. In addition, a financial return is not the only measure of valuing an investment in professional training. Successful professional training will result in positives like enhanced employee satisfaction/less defection and more positive client experiences/boosted referrals.

As you engage in professional development training, we recommend the following tactics:

1.     Focus Your Development Efforts. Not all “development training” is the same. Simply incorporating a training program into your business will not automatically produce results – and that results in a waste of resources. The first thing to do is establish what problem(s) you are trying to address with training or what business opportunities you hope to expand on.

2.     Get Input Before Training. While you will certainly spot issues of concern in your firm or company, there are many of which you may not be aware. Trust your colleagues to know what they need as well. Some may be struggling with things you didn’t even realize were concerns. Ensuring that development is tailored to the specific needs of your team will result in a more efficient use of your resources. Understand that simply because a colleague is not employing a specific skillset at present doesn’t necessarily mean they don’t possess it.

3.     Don’t Use “One Size Fits All” Training. Simply putting your employees through “Development 101” training won’t work for everyone. Certainly, attorneys new to a particular area of practice will have different training needs than those who’ve been practicing in an area for a length of time. This does not always correlate to years in practice. Keep in mind that even more experienced attorneys will need to have basic training in some areas when they have changed their focus or gone from working in a company to a firm (or vice versa).

4.     Get Feedback After Training. Ask your employees how training went. Was it worth their time? Do they feel it was relevant to their jobs? How could it be improved? This will make the next development training exercise you organize even more effective.     

No matter how you measure it, it’s clear that professional training provides a solid return on investment if it is properly planned and managed.

[1] Avolio, B. J., Avey, J. B., & Quisenberry, D. (2010). Estimating return on leadership development investment. The Leadership Quarterly, 633–644.

[2] Richard, Brett W., Holton, Elwood F. III, Katsioloudes, Vicky (2014). The use of discrete computer simulation modeling to estimate return on leadership development investment. The Leadership Quarterly, 1060.