A significant report reveals the financial toll of mental health challenges on large law firms.
- Law firms are losing millions yearly and experiencing a 19% drop in productivity due to mental health issues.
- Presenteeism, where employees work despite poor mental health, is a major factor in these losses.
- High job demands and insufficient support are key drivers of stress in the legal sector.
- The report outlines suggestions for law firms to better support employee wellbeing.
A recent report highlights the substantial financial impact of mental health issues on large law firms, with findings indicating a 19% reduction in productivity as a result. The study, conducted by researchers from Unmind, involved over 4,400 legal professionals across the UK and US. Financial losses were also significant, with smaller firms losing an average of £6.8 million, mid-sized firms losing £34 million, and the largest firms losing as much as £65 million annually. The average financial loss attributed to poor mental health stood at £26 million across all surveyed firms.
Presenteeism emerged as a significant contributor to these financial losses, making up 69% of the annual mental health-related loss per employee. This phenomenon occurs when employees continue to work even when their mental health is compromised, leading to reduced productivity. Additional losses were driven by attrition, accounting for over 19%, and absenteeism, contributing nearly 12%.
Stress was identified as a predominant issue, negatively affecting job performance 44% of the time. Legal professionals reported that unmanageable workloads and high client expectations were major stressors, with only 27% of those experiencing high stress levels feeling able to meet client and role expectations. This stress is linked to diminished social wellbeing and a decreased sense of fulfilment at work, which in turn limits professional development opportunities.
The report also highlighted a lack of trust in senior leaders to prioritise employee mental health, with trust levels in leadership decreasing from 19% to 30% since the previous year. A notable disparity exists between associates and their willingness to discuss mental health issues with management, with only 43% feeling comfortable doing so compared to 50% of partners and 61% of other staff. Furthermore, the report underscored that psychological safety was perceived as lower among women than men, with 35% of female lawyers feeling that work positively impacted their mental health compared to 50% of male counterparts.
Recommendations for law firms included balancing job demands with available resources to manage stress effectively, integrating professional mental health support, making mental health a central focus of leadership development, and providing better support for female and younger employees. Dr Nick Taylor of Unmind emphasised that superficial approaches to wellbeing are insufficient, advocating for comprehensive initiatives across all organisational levels. The potential role of artificial intelligence (AI) in managing workloads and enhancing mental health resources was also mentioned as a possible avenue for improvement.
The findings present an urgent call for law firms to address mental health challenges comprehensively to ensure employee wellbeing and productivity.
