To avoid a phase of decline, law firms must continually work on attracting and retaining new talent. A well-communicated recruiting plan with monetary incentives for those who actively recruit has the potential to transform a firm immediately.
Top level goals of a law firm recruiting process include:
Attract good fit laterals;
Attract good fit new graduates; and
To accomplish these goals, an expedited recruiting process and system of rewards are necessary.
Lateral hires with business
Ensuring that the recruiting process is thorough and moves quickly are two key success factors. Most good laterals have several opportunities and the firm that can evaluate a transaction quickly and offer a transparent economic deal has an edge.
Firms must effectively address the following questions when considering a potential lateral hire:
- Strategic and cultural fit;
- Opportunity costs and benefits;
- Impact on revenue and cost and profit per hour;
- Equity slotting and buy-in if applicable; and
- Impact on cash flow and current year earnings.
Creating a streamlined process that can simulate compensation post admission (equity) is essential. Smart laterals will want to see historical compensation levels of current partners with similar levels of profitability or contribution.
New Lawyers and Laterals without business
In some instances, attracting the right lawyers to service the firm’s current clients can match the impact of a lateral hire with business. Often these contributions are overlooked because they happen with less fanfare. Firms that have a competent marketing system often struggle with production issues and need experienced attorneys to maintain the service levels to existing clients.
Preparation is Key
Many firms only hire when someone leaves, and there is an immediate need. When this occurs, and no suitable replacement is available quickly, law firms are often forced to rely on lesser talented or lesser trained lawyers to service client work. Eventually, a permanent decline in the capability of the firm can result.
To guard against these risks we recommend the following:
- Hiring in advance of need;
- A willingness to replace weak performers; and
- Appropriately delegate at the partner level to create opportunities.
Recruiting in advance of need requires an honest evaluation of the firm’s current staffing capacity and capability. It also requires a budgeting process that provides for a measure of prospective hiring.
Compensation and Incentives:
At the equity partner level, most firms consider recruiting a responsibility of partnership and do not compensate for it specifically. The benefits of the right lateral hires and new lawyers are often significant. Additionally, those who recruit another attorney are more inclined to also stay with the firm.
For these reasons, we recommend that firms pay bonuses for all recruiting contributions at every staff level. The value of attracting quality lawyers to the firm includes:
- Profitability contributions;
- Creating competition to drive lawyer performance;
- Capability and capacity increases; and
- Reputational benefits.
Talent acquisition takes time, professional resources, tools, and a strong network of legal market relationships. Website approaches can work and are an important recruiting tool, but in our experience, the two most effective ways to find high-impact candidates, especially those who are not actively looking, include in-house recruiting incentives and strong relationships with outside recruiters.
Some firms prefer an informal approach for using recruiters that is candidate-centric. For example, accepting potential recruiting opportunities based on an interest in a potential candidate regardless of the source. This approach takes little effort on the part of the firm, but often results in wasted time considering oversold or poor fit candidates. Recruiters who fall into this category often realize there is little loyalty in the relationship, so they have less incentive to focus on the long-term implications of their placements.
Alternatively, a firm can build relationships with a smaller number of recruiters who have a proven track record, invest time learning about their clients’ goals, and who filter out poor fit or unqualified candidates. Targeted recruiting strategies implement better using this approach.
Good recruiters will also associate other recruiters when necessary to find that best candidate. For example, a recent experience with a quality recruiter included her creating a strategic partnership with a colleague in another state who had a stronger local market understanding, which resulted in access to better candidates and a stronger hire.
Recognizing that recruiting successes can provide substantial economic and cultural benefits improves the chances of creating a high-performance firm. Favorable market perceptions of the trajectory of the firm are invaluable.
Click on the box below to listen to Brian Kennel discuss how law firms can reach objectives for not only revenue but for lifestyle, team motivation and market positioning.