Adin Wagner is a freelance writer and lawyer based in Toronto.
Over the past several years, there have been rumblings about high-paying and prestigious professional firms struggling to retain their highly paid and prestigious young employees. Apparently, banks and investment firms are leaking juniors. Associates at Bay Street law firms, meanwhile, are opting for less gruelling work in alternate career paths.
A number of explanations have been thrown around for this phenomenon, from market changes – such as the expansion of in-house jobs or the rising tech sector – to attitudinal ones, such as the sudden prioritization of something called “work-life balance.”
But none of these reasons explains this trend as well as Canada’s housing crisis. Simply put, the expensive price of a home is resulting in talent attrition at some of the biggest and most influential firms in the country. Sooner or later we will see the impact of this on the economy.
A 2018 survey of millennial lawyers and law firm leaders found that the root cause cited for dissatisfaction with Big Law was the “organizational culture” of firms that left lawyers “feeling commoditized.” But that story feels incomplete. As Doug Bryce, the national managing partner of Osler, Hoskin & Harcourt, told The Globe and Mail in 2021, he has been hearing “versions of this since I was in law school in the early 1990s.”
People generally like high pay and prestige. It’s something that transcends generations. What does not, however, is the price of a house in cities such as Toronto.
In the past 20 years, the median price for a detached home in Toronto has gone from around $300,000 to just below $1.4-million. A full-blown crisis. During that same period, the starting salaries at Bay Street law firms have reportedly increased only from $78,000 to $130,000. Of course, young Bay Street lawyers and investment bankers are far from the people most impacted by the absurdity that is the Canadian housing market, but even they feel its effects. Their buying power has been throttled.
The traditional measures of success no longer buy the traditional markers of it. So what, then, do many of these younger employees do? They may leave to the United States for higher pay, perhaps even to areas with a lower cost of living. They might take a chance on a high-risk, high-reward opportunity in the hopes that they will reap even greater wealth. Or they may decide that working long hours for very high pay is not quite worth it any more and opt for something less demanding.
This is something that cannot be ignored – because talent matters. That is why these firms recruit early and voraciously. You may not need a study to tell you that talented people are better at their jobs – but those studies exist – with some quantifying high performers at “complex jobs” as 800 per cent more productive than average performers.
Beyond short-term productivity, younger employees are groomed to take on further responsibility and eventual leadership positions. They are an investment. With law firms, for example, the return on those investments are critical to their “continued future financial and organizational viability,” Aly Haji wrote in a 2018 CBA National Magazine article.
Like all advanced countries, Canada runs on a service-based economy. And these top-tier firms have long served as cornerstones of its economic architecture. They are embedded in our financial institutions, service the country’s innovation arm and are deeply influential on our politics. That novel opportunities are siphoning talent from recruitment pools long dominated by these firms represents a reshuffling of the deck. The plates underneath us may be shifting.
Likely compounding those market pressures is an issue largely outside these firms’ control: The younger generation of employees can see the houses and situations of those senior to them, and are probably noticing that the transaction of their careers has fundamentally changed. Their hard work buys a lot less than it used to. Why would we expect them to act like those that came before?