Legal positions "critically" hard to fill: How firms are getting it all wrong

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The legal sector needs to think outside the box when it comes to recruitment because what they’re doing currently clearly isn’t working.

A series of surveys have shown that although the legal sector is growing exponentially in terms of job creation, the overlay of supply with demand “isn’t healthy” and a major recruitment problem continues to be finding the right fit for the firm.

Australasian Lawyer spoke to a number of experts in the legal recruitment arena to discover what’s going wrong.

“We think there’s an opportunity to change the way people are being employed,” says Anthony Bleasdale, the president of Australasian Legal Practice Management Association (ALPMA), in response to the results of the 2014 ALPMA/ Rusher Rogers Legal Salary & HR Issues survey.

It revealed that even though most firms (80%) are likely to be in the market for recruiting more lawyers and solicitors in the coming year, “finding good people” remains the number one challenge for law firms for the third year in a row.

“Maybe firms are missing opportunities because they’ve taken a rigid approach in the past in reviewing [CVs],” he says. “An opportunity that firms will have with such a high recruitment demand is to think differently.”

Katherine Sampson, the managing director (Vic) of Australian legal recruitment agency Mahlab Recruitment, told Australasian Lawyer that market trends have seen new issues around retention in the legal space emerge.

More recently there has been an influx of private practice lawyers moving into in-house positions, she says.

“It’s not necessarily that they’re going to a competitor firm, but they are going in house… Then from a corporate perspective what you’ve got happening in the in-house industry is that more senior lawyers are going into an in-house role, so there’s a bottle neck at the top.”

Sampson says the recent period of salary freezes also hasn’t helped the private practice sector to retain good lawyers.

In terms of salary, she’s seen law firms respond to economic conditions by adjusting the way they offer remuneration.

And while the vast majority of base salaries in law firms are only set to increase by CPI this year as revealed in Australasian Lawyer last week, Sampson says bonuses are now being used as differentiators.

“In private practice it might be 10-20% of your base, and in corporate practice it can be anywhere from 10-50% depending on seniority,” she says. “And these could be personal bonuses.”

In the last six to nine months Sampson has also seen a large increase in the number of sign-on bonuses.

These are one-off monetary bonuses offered as an incentive to bring lawyers over to new firms, and are often used when the base salary will be similar to what it was previously.

“These bonuses can be quite significant – a couple of hundred thousand in same cases if you are a partner.”

But at the end of the day, Sampson says the best weapon to attract quality people is in having happy employees.

“I think that really as far as law firms are concerned what your current staff say about you is absolutely all powerful, and I don’t think most firms have fully grasped that yet.”

The recently released 2014 Hays Salary Guide: Salary and Recruiting Trends confirms this, and reveals that lawyers, disgruntled after periods of recruitment freezes and mergers, have led to changes in recruitment patterns.

Partners with transferrable practices are now in high demand due to firms seeking out candidates who are unhappy following a merger.

In house lawyers are also in demand, and businesses involving project work in particular are looking for candidates with experience in contract negotiation, reviewing and drafting, the survey says.

And because salaries and freezes have remained steady in the first half of 2014, many expert lawyers at senior level are looking for new roles in firms that offer clear career progression and better salary incentives.

Employment site Seek’s national client training manager Narelle Stefanac agrees that talent acquisition is now more complicated than ever.

“For law firms, the need to challenge ‘the way we’ve always done things’ is even more critical, because the candidate supply continues to be outpaced by the overwhelming demand for talent,” she says.
 
“From 2008 to 2012, the number of employed people in legal roles rose by 36%.  This is exceptionally high.  In a strong growth market it is extremely difficult for firms to retain existing staff, attract new talent as business expands and control salaries at the same time.  With legal roles expected to rise a further 12% from 2012 to 2017, businesses need a strong employee value proposition that meets the differing phases of the employee lifecycle (attraction, engagement and retention) and they need to know how to communicate it through a diverse range of channels.”
 
While Seek statistics show that legal is the 16th (out of 30) most in-demand industry in Australia, it shockingly has the second lowest applications per ad – something that Stefanac deemed as “critically low” during a recent webinar.

Stefanac says that employers need to be far more flexible when it comes to hiring fresh faces.

Given that the availability of good candidates in different practice areas seems to be state-dependant, firms wanting to recruit need to consider looking interstate and be willing to pay relocation costs for the right candidate.

“Thinking about where you go if you can’t get them out of the local market is really important,” she says. “We need to get some real elasticity in that process.”

Some law firms have already begun to adapt their recruitment techniques and have been making use of technology such as video content, social media, and talent search tools.

However Stefanac says the two biggest challenges across most law firms is that they are yet to adapt their content for the mobile phone user, and they struggle to influence hiring managers on what best practice recruitment looks like today.