By Mary B. Winter and Abigail Audlin*
As the Covid-19 pandemic swept across the world, our nation shut down in March 2020. What had been a very frothy hiring market, which started in 2018, pivoted to companies cancelling searches for talent, decreasing salaries, and conducting mass layoffs. However, being ever resilient, it was not long before companies retooled their work environment to enable their employees to work remotely, where possible. By June 2020, this push to facilitate remote work generated a widespread need for companies to enter contracts and consequently a job surge, particularly for attorneys to draft and negotiate technology contracts. This demand for attorneys has continued to escalate, and job seekers are receiving multiple attractive job offers.
CURRENT MARKET
It is a brutal market for employers in the DC area. In the tightest legal talent market this author has ever experienced in 25 plus years in the legal placement industry, in-house legal departments are competing for talent not only with their neighboring companies, but also with companies on the West Coast and even law firms, which are increasingly turning to the in-house market for new attorney hires. Additionally, staying home during the pandemic has resulted in many rethinking their life, and completely dropping out of the workforce. For multiple reasons, it is a candidates’ market.
West Coast
Complicating the talent search process is that, even before COVID, major technology companies, primarily headquartered on the West Coast, were tapping into the legal market on the East Coast. These companies have found a rich talent pool on the East Coast and have stepped up their pace of hiring. They continue to offer not only above-East Coast market compensation, as well as valuable stock options, but also allow fully remote work, so that their employees can live anywhere in the world. Most East Coast companies cannot compete with West Coast salaries and have not been willing to allow remote work. At best, companies based on the East Coast might allow a hybrid work environment, where employees need to live within commuting distance to the office and can work from home a couple of days a week. Companies based on the West Coast frequently offer generous, valuable stock options, and East Coast based companies are increasingly following suit.
Law Firms
Just as law firms hired en masse in the late 1990’s dot.com boom, law firms are getting creative to meet the current strong demand. Historically, transitioning from a law firm to in-house was a one-way street; firms very rarely hired from corporations. Even though law firms traditionally paid better than in-house positions, attorneys were willing to take the pay cut for work-life balance and to be part of the corporations’ mission. When firms did hire from in-house, it was typically an attorney who was a former general counsel of a significant client. Now, however, law firms regularly look to corporations and associations as a source of well-trained talent.
With the shortage of legal talent and clients needing assistance from law firms at record levels, law firms are implementing multiple creative benefits to keep and attract talent. Many firms are redesigning their offices into more egalitarian workspaces with multiple meeting rooms to foster a collaborative work environment. Additionally, they are employing wellness programs to reduce burnout and implementing cutting-edge legal technology to attract and retain tech-savvy associates. They are not only continuing to offer high salaries but also provide generous annual bonuses as well as bonuses for “exceptional” work. Finally, they are also giving extraordinary signing bonuses for associates in highly sought-after practices. These signing bonuses can be as high as $100,000, an amount which previously was reserved for former Supreme Court clerks.
Some law firms are allowing their attorneys to choose the number of hours they want to bill. By enabling them to choose the number of hours to bill, the attorneys can make a conscious decision of whether they want to sacrifice some of their salary for a less demanding work year. But what makes this offer so appealing is the fact that the attorneys are given control and predictability over their lives. This choice appeals to those who care less about the money and more about free time, whether it is to climb a mountain or devote time to social issues. Finally, many firms have elevated the status of time devoted to pro bono work almost to the level of billable work. Attorneys are not going to leave their lucrative law firm position unless there is a “compelling reason” (quote from multiple law firm associates).
The efforts of law firms are paying off. In the first half of 2021, the number of attorneys moving in-house from law firms dropped by 12.7% (Law 360, 05/03/2021). According to data gathered by Law360, in the past six months of 2020 more than 300 attorneys left their in-house positions to join the top 200 Law Firms, an increase of 10% compared to the same period last year (Law 360, 05/03/2021).
In-house
Working in an in-house legal department has typically been viewed as an ideal place for attorneys. Almost invariably, in-house attorneys not only have a better work/life balance than those in law firms, but in-house positions offer attorneys a mission they can get behind. The goal of most law firms is to provide good client service on isolated matters, and to move up the rankings by AmLaw. Also, in-house attorneys do not need to devote hours to developing new business, though it is wise to develop good relationships with in-house clients. Additionally, in-house attorneys collaborate with teams of people at different levels who have different educational backgrounds, while those in law firms primarily work with other attorneys. Finally, most in-house attorneys do not have to keep track of what they do every 6 or 15 minutes of their day.
The downsides to working in-house is routinely lower salaries and often limited opportunities for promotion. Despite these negatives, attorneys in law firms have historically been anxious to accept these compromises, often cutting their salary in half, if not more.
Law firms, however, are changing their environments to keep their attorneys engaged. To get back their competitive edge, in-house legal departments need to recognize what their target candidates want and reinforce the message to them that, in general, attorneys working in-house are happier than those who are working in law firms. Unfortunately, job boards are so flooded with postings for attorneys, it is difficult to have your great opportunity noticed by attorneys who are looking for a change. Additionally, everyone is seeking the same attorneys: those who have between 3 and 10 years of experience. Now more than ever, the best way to find the best talent is to conduct a targeted search. Simply advertising will bear minimal results.
Below are steps in-house legal departments can take to find qualified attorneys, without having their HR department, or an outside recruiter, devote weeks to the search.
HOW DOES A LEGAL DEPARTMENT COMPETE FOR SCARCE TALENT?
New Year
While implementing collaborative work environments and a continued focus on a work life balance will help attract strong talent, there are other steps that corporations can take to make themselves more competitive in the search for legal talent. Corporations and non-profits should rethink when they should conduct their searches. Few employers hire in the months of January, February, and March. For the past 25 years, this author has seen that the first quarter of the year is the slowest period for hiring. However, the beginning of the New Year is when people receive their bonuses and become receptive to hearing a “compelling reason” to change jobs. The busiest hiring season has always been the last quarter of the year. Unfortunately, if attorneys change jobs at the end of the year, they might be leaving significant bonuses, often over $100,000, on the table.
Additionally, the New Year is when people make resolutions for change, which can include finding a new job. Therefore, as people are coming into the New Year with their resolutions and a desire to make changes, they tend to be more receptive to the idea of changing jobs.
If possible, employers should remedy that disconnect between the desire of talent and opportunities by conducting searches in the first quarter of the year.
Remote Work and Hybrid Work Environments
After less than a year of working remotely during the pandemic, organizations began to realize that many of their office workers can be productive from home. Startups to international conglomerates have implemented remote work arrangements. Remote work enables employees to work from anywhere in the world, as they do not go into the office. To attract and retain talent, corporations should evaluate whether working on a remote basis is a possibility for their attorneys.
Every organization Firm Advice has consulted with has said remote work has been very successful for their bottom line. According to a Forbes’ survey, when employees were asked if they would prefer to work from home rather than receive a $30,000-a-year raise, 64 percent wanted to continue working from home (“Survey Asks Employees At Top U.S. Companies If They’d Give Up $30,000 To Work From Home: The Answers May Surprise You,” Forbes, May 21, 2021). Remote work benefits both the organization and the workers.
This realization, as well as the fact that many workers do not wish to return to five-days a week in office, has resulted in many organizations hiring attorneys in cities where they do not have offices. Often these remote hires are in lower-cost areas, so they do not need to pay the high salaries demanded in major metropolitan areas.
If a remote environment will not fit your organization’s in-person, collaborative culture, perhaps a hybrid arrangement would work best. In hybrid environments, workers are in the office two to three days a week and may have their own office or may work in a “hoteling” situation, where they reserve an office for the days they will be in-office. The employees must live close enough to an office to arrangement will work. Many attorneys do not want to work on a remote basis, and for them, a hybrid environment is ideal. LinkedIn has recently added a “hybrid” option to the company’s type of work environment when posting positions.
Collaboration
After deciding whether a remote or hybrid work environment would be a possibility, it is imperative that companies create inclusive communities where the employees feel connected. One of the reasons for the growth in demand for attorneys is due to companies acquiring, implementing, and leveraging technology that enables collaboration while working on a hybrid and remote basis.
Even though the majority of people surveyed would choose remote work over a salary increase, those same people want continued collaboration with their colleagues. Accordingly, with the addition of remote working, the organizations that will be most attractive to potential candidates are those that are able to maintain, and build upon, collaboration with the remote and hybrid work environments. The increase in remote workers calls for a larger IT department equipped with the knowledge necessary to teach their employees how to use their new technology. This learning curve is the perfect opportunity to blend the new and experienced employees with those who are working remotely as well as in the office. Scheduling a selection of mandatory classes for employees gives management the opportunity to group together a diverse selection of employees.
Referral Bonuses
Many organizations have found success in hiring by offering their employees bonuses for referrals. Bonuses for referrals of candidates who are ultimately hired range from $1,000 to $10,000, usually depending on the level of the position to be filled.
Consider Those Who Have More Experience Than Needed
A cursory review of legal job postings clearly demonstrate that most employers are looking for attorneys who have up to seven years of experience. It makes sense as employers want to promote from within, rewarding their current employees. But everyone, including law firms, are essentially looking for the same candidates, resulting in paying a premium for these attorneys. However, there are many qualified, experienced attorneys who are not currently employed. Based on a LinkedIn search of the number of attorneys in the U.S., the bell curve demonstrates that the greatest number of attorneys in the workforce graduated between 2007 and 2008. Yet, most employers are looking for attorneys who graduated more recently than that.
Many, if not most of these more experienced workers, who may have lost their positions through a lay-off or redundancy due to a merger, are looking for a place where they can work with a great team handling interesting work for the next five to ten years. Given that, as of January 2020, the median tenure within legal positions is 5.8 years (Bureau of Labor Statistics, USDL-20-1991, September 22, 2020), more seasoned attorneys may stay with their employer longer than those who are looking to climb the corporate ladder. Antidotally, there are more experienced attorneys who are available on a temp or temp to hire basis than there are attorneys who have less than 10 years’ experience, as the experienced attorneys are not in as much demand. This availability provides the opportunity to try out the experienced attorneys on a temporary basis, to ensure they are a good fit before making an offer of employment.
Look for People Who Can Learn and Have Soft Skills
On the other end of the spectrum from experienced attorneys are bright, eager to learn and work, junior attorneys who may not have all the substantive skills desired. To locate a diamond in the rough, it is important to assess their soft skills—their ability to take constructive criticism, be diplomatic, and work with different personalities. These soft skills are usually more difficult to teach than substantive legal skills. Offering training provides a candidate with a reason, in additional to salary or remote work, to accept the position.
Hiring attorneys who need training in substantive areas not only attracts ambitious neophytes, but it can also benefit your current staff, as it gives them the opportunity to learn how to train and supervise a more junior person. Both the new hire and the longer-term employee benefit from the training. The National Capital Chapter of the Association for Corporate Counsel (ACC NCR) offers a terrific Leadership Academy for experienced in-house counsel “to provide the skills necessary to become a trusted advisor and leader…” Providing these growth opportunities for your existing workforce is a way to retain your employees.
SUMMARY
A work environment that inspires your workers and one that enables continued growth and collaboration will translate into productive employees. These employees will want their acquaintances and friends to work with them, and will provide referrals, as well as high ranks on various websites.
Initiating hiring during the first quarter of the year and expanding the pool of applicants, by considering more senior and less experienced attorneys, will help companies gain back their competitive edge.
*Mary Winter is President and General Counsel of Firm Advice. After seven years in a major law firm, Seyfarth Shaw, and General Counsel of an association management firm, she opened Firm Advice in 2000. Firm Advice provides in-house legal talent on a temp, temp to hire, and direct hire basis. Abigail Audlin is an intern at Firm Advice and is pursuing her Masters’ of Science in Applied Political Analytics at the University of Maryland.