A recent study highlights the substantial financial toll that mental health challenges impose on large law firms, affecting annual revenues by millions of pounds and decreasing productivity by nearly a fifth.
The research, sourced from a UK-based mental health platform, Unmind, analysed data from over 4,400 legal professionals across nine major law firms in the US and UK. It reveals that mental health struggles are creating significant economic repercussions, with presenteeism emerging as a predominant factor. Notably, presenteeism occurs when employees continue to work despite their poor wellbeing, severely impacting output.
Stress was identified as the primary cause of these mental health challenges, negatively impacting 44% of legal professionals’ performance. This was followed closely by a lack of job fulfilment, affecting 43% of respondents, and insufficient support from firms, at 37%. These factors are exacerbating the mental health crisis within the legal sector.
Financial implications are staggering. Medium-sized firms, comprising approximately 1,400 staff, report an average annual loss of £34 million due to mental health issues. Smaller firms, with about 600 employees, face losses of around £6.8 million, while larger firms, with up to 2,400 staff, suffer losses nearing £65 million. On average, the annual loss attributable to each employee’s mental health challenges amounts to £26 million across these firms.
A breakdown of these financial losses reveals that 69% is due to presenteeism, while 19% stems from employees’ intentions to leave their jobs within the next six months because of mental health issues—a phenomenon known as attrition. Additionally, nearly 12% of the loss relates to absenteeism.
The study highlights that high job demands, including excessive workloads and demanding client expectations, paired with minimal support, significantly heighten stress levels in the legal profession. Only a small fraction, around 27%, of those experiencing high stress feel capable of meeting client and role expectations. This imbalance not only affects occupational efficacy but also thwarts personal and professional development, ultimately disengaging employees from positive organisational contributions.
Furthermore, there is a lack of trust in leadership’s commitment to employees’ mental wellbeing, with only 30% of respondents expressing confidence in senior management’s prioritisation of mental health, a figure down from 19% the previous year. Conversely, individuals with supportive managers were nine times more likely to positively associate their work environment with good mental health.
The issues appear to disproportionately affect certain groups within law firms. Associates, for instance, report greater mental health challenges than partners and other staff, with just 43% feeling comfortable discussing these issues with their managers, compared to half of the partners and 61% of other staff. The workplace culture regarding open discussions on mental health also seems less supportive for associates, with only 32% witnessing open conversations, compared to 43% of partners and 56% of other employees.
Gender disparities further compound these challenges, as only 35% of female lawyers acknowledge a positive impact of work on their mental health compared to half of their male counterparts. Recommendations to address these issues include rebalancing workload and resources, investing in mental health support, making mental health a leadership priority, and specifically supporting female and younger employees.
Dr Nick Taylor, Unmind’s chief executive, emphasised the need for comprehensive organisational changes to tackle these rising mental health concerns. He argued that relying solely on employees to manage their mental health is ineffective and unsustainable. AI technology could be an avenue for improvement, potentially helping to manage workloads and reduce stress while offering personalised mental health resources.
The findings underscore the urgent need for law firms to adopt a multi-level approach in addressing mental health challenges. By prioritising employee wellbeing and leveraging technology, firms can aim to reduce financial losses, improve productivity, and foster a healthier work environment.
