How to Hire Right: A Comprehensive Guide to Law Firm Hiring

Summary: Law firm and legal staff attrition and retention can have profound effects on a law firm’s bottom line. The secret is it costs much more than we realize. There are ways to create a work environment that retains attorneys and legal staff and grow them into important assets of a firm. This article offers a comprehensive series of steps for ensuring your firm hires and maintains a loyal and engaged team, from associates to support staff.

• For law firms, like all employers, bad hires are costly; employee attrition is costly; hiring replacements is costly; losing associates that have been trained on your dime is very costly. And yet law firms may not be doing all they can to stop the losses.
• As bad as those losses are, the effect they can have on attorneys and staff that remain can be very negative, too—especially when it comes to employee engagement, morale, etc.
• Attrition and retention can improve by creating a more effective system of hiring attorneys and legal staff and by providing incentives for hires to stay—and the incentives attorneys want aren’t always higher pay.
• The article also explores overlooked ways to create a law firm environment in which associates, staff, and partners can altogether thrive.

The Price of Getting It Wrong: What a Bad Attorney Hire Will Cost You
The first rule of getting it right is not getting it wrong. Even before your new attorney ever gets to sit behind a desk, your firm will have already dug a deep hole making the hire.

It takes, on average, approximately 42 days to fill an open position—any position—attorneys or staff. Generally, legal searches take longer as the position’s related compensation increases. All the while, your law firm continues to have to complete critical client work and other workaday tasks. Also, as time goes on and you feel the pressure ever more, your chances that whatever decision you do make will increasingly be one that resembles desperation. Bad attorney hires thrive in desperation.

And unless your firm can afford to absorb hiring mistakes in the tens of thousands of dollars, bringing on the wrong attorney could be devastating for your firm.

The data proves a bad hire is bad for your bottom line:

These are the numbers:
The average cost for each bad hire can equal 30% of the attorney’s annual earnings. That means if you hire an associate at a salary of $80,000, the real cost to your firm will be $104,000.

Here’s where the costs of bad hires can come from:

• For a young associate, the costs to the firm can be upwards of $200,000 in their first two years of practice. One estimate suggests that in large law firms, it can take an average of three to five years for a law firm to break even on the costs of hiring a new lawyer.
• CEO of Link Humans, Jörgen Sundberg, claims the cost of recruiting, hiring, and onboarding a new employee, one that’s not even an attorney, can be as much as $240,000.
• Also factor in the required training and the net loss of productivity to other associates and partners in the firm who sacrifice their own output to edit, correct, and add further context and insight to help the new associate’s work get up to the necessary level.
• If the associates do not stay at the firm long enough to become profitable, all of the firm’s investment then becomes “sunk costs.”
• Also, the firms has hiring costs before the new hire even starts. Hiring managers spend time and money pursuing, interviewing, screening, and making offers to candidates that will never be recovered. If outside recruiters are used, add those additional fees to the total costs of hiring an attorney.
• If the hire turns out to be a bad one, this can have a strong negative impact on your legal team. Other attorneys or staff members will have to pick up the slack and take on additional and otherwise unfulfilled responsibilities. Then, the loss becomes twofold: a decrease in team efficiency and heightened employee dissatisfaction. The latter may lead to the possibility of additional turnover.

As you go up the scale the numbers get far worse:

• For entry-level attorneys: replacement costs are between 30%-50% of the annual salary
• For mid-level attorneys: replacement costs are upwards of 150% of the annual salary
• For senior associates: replacement costs are 400% of the annual salary
• According to SHRM, total costs resulting from turnover range from 90% to 200% of the attorney’s annual salary

To prevent these losses and attrition, what are law firms and companies doing?
It would appear, not a thing.

The average raise an employee can expect is 3.1% in 2019—that’s a 1/10 increase over the last 5 years. From worst to best, raises ranged from 1.3% to 4.5%. With inflation in 2019 at 1.75%, down from 2.44%, that doesn’t leave much left over—a little over 1% or less depending.

According to Investopedia, the average raise received for leaving an employer was between 10% and 20%—and in some extreme cases, upwards of 50% depending on circumstances and industries. Overall, employees that stay with a company for more than 2 years get paid 50% less. As of yet, based on pay raises offered by companies in general, they haven’t been motivated to stem the attrition.

When it comes to losing staff, if your firm doesn’t have the scale and cushion to absorb such costs, losses like these can be seriously damaging—catastrophic even. While recruiting managers decry that bad hires can cost firms thousands to 1.5-2 times an annual salary, and even these figures may be very conservative. Tony Hsieh, the CEO of online clothing retailer Zappos, said the costs to his company were “well over $100 million.”

Good legal staff and attorneys should be considered more than an investment; they’re an appreciating asset.

And what about those Millennials?
For law firms, the road ahead doesn’t look encouraging: Millennials, according to Gallup, are job jumpers: 21% said they changed jobs within the past year—three times higher than that of non-Millennials—and 60% say they’re keeping their eyes and job search accounts open for other opportunities. Only half of them expect to be in the same job a year from now. For those that stay, 7 out of 10 say they’re not feeling engaged. And because of their taste for job-hopping, Millennial turnover is costing the U.S. economy $30.5 billion annually.

This is not to single out Millennials for disparagement. Worldwide, 18% of workers claim to be actively disengaged and another 67% are simply not engaged by their jobs. Altogether, 85% of workers globally feel some level of disengagement with their jobs.

Terminated associates: The hours you save isn’t equal to the hours they gave
When a firm fires an underproductive associate, there’s a net savings of costs incurred by the position. Depending on the given salary (say, $100K), benefits, taxes ($25K), plus half the cost of the secretary ($30K), necessary office space to accommodate (another $10K)—understanding that some of those costs can’t be adjusted with each changing staff levels—for argument’s sake, let’s say the cost savings of the terminated associate is $200,000 a year.

Most firms should be able to generate at least $300,000 for the associate’s time. The idea that firing an associate creates a net positive is a myth. The losses can be deep.

Bad Hires: Time vampires
Bad hires can also kill time, according to hiring managers:

• Bad hires require 17% of a supervisor’s time, on average, just to manage them
• Bad hires don’t get along with co-workers
• Bad hires costs companies thousands of dollars in lost productivity
• Bad hires typically require 6-9 months of an employee’s salary to hire and train a replacement

Numbers aren’t the worst of it
The impact goes beyond the financial. According to Forbes, Chief financial officers consider the damages to morale and productivity from a bad hire even worse than the financial ones. Their disengagement is contagious and, it seems, law firms just don’t have the resources to defeat it. When the disengaged underperform, others are forced to pull their weight and become disengaged in the process. Standards drop all around and bad habits become epidemic. Even when the offending attorney is gone, time may be needed to reset the behaviors of the remaining team members. Poor employee performance is often misread as process or product issues and the problem can hide and fester for longer than it should. Time and resources can be misdirected in the meantime.

Unfortunately, the problem may be even bigger than we may imagine: In their long-term tracking of employee engagement, Gallup says that less than one-third of U.S. employees report being enthusiastically involved and committed to their work.

Moral of the story
Legal staff and attorney retention is vital to the health of any large to mid-size firm, and nearly life or death to small ones. Losing a good associate is like a house fire, when their talent, training, and goes up in flames, there are too many losses to calculate. Also, hiring and staffing for a law firm can be a very long process. It can require more effort than any other task your firm will face.

How to Know When You Need to Hire

When your firm wants to grow, it also wants to do it prudently and effectively. Here’s when to know that it’s time hire:

• You’re turning down work. You’re getting more than you can handle and the reason may not be due to inefficiencies. You may just lack the staff necessary resources.
• The work you’re providing your clients is less than it should be. Communication with clients is breaking down and you’re finding that you’re missing deliverable deadlines.
• You’re falling behind with basic business tasks. Administrative paperwork is piling up—inboxes are full, outboxes are empty. This can have a devastating effect on your firm’s finances and growth objectives.
• Your work days are getting longer. You didn’t think it possible but you can’t seem to catch up. How can you nurture new business when you can’t even finish the old? Beware: This is where burnout thrives. You firm won’t grow while it’s infirm. Burnout kills the health and vitality of your law firm.
• You can no longer look ahead. You’re nearsighted. You can’t see past the piles of work. You’ve no growth strategy or business plans. Planning takes time and your head is barely above water. This too impacts the continued health and growth of your firm.

So: Who’s on first?

What are your firm’s greatest immediate needs?

• Is your law firm’s hiring problem one that could be solved with a couple of secretaries, a bookkeeper, a law clerk, and better coffee and catering? Can you refer some of your workload to outside attorneys or can they be taken on by a temporary staff attorney or law school student? Barter some office assistance for some legal advice? Or, maybe the time has come to invest in new team members.
• Are non-billable tasks taking up more time than the billable ones? Are you losing valuable time doing paralegal or clerical work when you should be drafting motions or documents for your clients? Is your life in chaos just trying to stay organized?
• Take a careful assessment of your business and your objectives for future growth. Be as unflinching as you can. You’ll want to take notice of your strengths as well as weaknesses. As a leader at your law firm, you’ve gotten used to the idea of taking on many of the tasks yourself. If where you fall short has the potential of compromising your commitment to your clients, you could also be potentially falling short on your ethical obligations.

Once that’s decided, you’ll need to concentrate on finding candidates who’ll meet two criteria:

• Which role will benefit your firm the most?
• Will that person also fit into your firm’s culture and values, including diversity and inclusion?

Where to begin?

Who’d best fill your immediate needs? Who best to help you meet your growth objectives?

• If you’re being slowed by the work of administrative tasks for running your business, you may need a legal assistant or secretary.
• If you’re overwhelmed with the details of case management, a paralegal may be your best hire.
• If you’re receiving too many leads that you’re turning away possible work, what you may need most is an associate attorney.
• Or maybe you just need the help with phones and light clerical that a receptionist might fulfill.
• Help with research, speaking with court staff for clarification, someone to prepare documents or sift through legal precedents or other legal precedents that a recent graduate law clerk could provide may be your best next step.
• To help with branding, messaging, email marketing, SEO, updating your website, maybe you’re ready for the help of a marketing and advertising specialist.

An alternative to commitment

One way to keep costs in check while still meeting your goals is to work with a remote provider or a contractor. Contractors are available for every imaginable role. Independent contractors are easy to find and easy to replace if for some reason they don’t work out. There’s a cottage industry of businesses that exclusively serve the needs of the legal industry, including accounting, staffing, collecting, and office management. Many traditional tasks are now becoming automated, including document review with natural language processing (NLP). This software scans and predicts which documents will be relevant to a certain case. Documents like wills and living trusts, business formation documents, copyright registrations and trademark applications can also be technologically streamlined. Virtual receptionists can answer phone calls and ensure a smooth client intake. And more new offerings are on the way.

The importance of a cultural fit

Be it a contractor or an employee, the right fit is extremely important. Because the wrong fit will cost your firm, not just in rehiring and “sunk” costs —it will cost you business. Aptitude, skill, background, and experience all matter, but a fit into your firm’s culture and core values can be just as vital. Whatever your firm’s values and goals, this should be the platform from which you build your legal team.

Ways to ensure your hires are the right cultural fit:

• Flex your values. Make the values of your law firm part of your public identity. Publish them on your website and reference them in your job postings.
• Speak your values. Put them upfront; put them in the job posting and discuss them in your initial interviews with candidates. Make sure your candidates are aware of them so they know whether they’re a good fit or not.
• Dig deeper. Ask more than skill-based questions so you can get an understanding of the individual’s personality. How do they respond to your values? What’s their body language like, their countenance? What are they saying? From there you can trust your gut.

Diversity & Inclusion

It’s important for your law firm. The reasons can be both practical and cynical. Yes, it is the right thing to do, but it also offers benefits as a business strategy. With diversity and inclusion, a workforce is more likely to say they have pride in their workplace. It shows in the numbers:

• Companies with diversity tend to gain higher market shares and a competitive edge when entering new markets
• Companies with a diversity and inclusiveness strategy say it’s improved their bottom line
• A 10% increase in racial and ethnic diversity on the senior executive team resulted in a 0.8% rise in earnings
• A survey of CEO’s found that 85% of those whose companies had a formal diversity and inclusiveness strategy said it’s improved their bottom line.
• A 2015 survey found 77% of CEO’s claimed to currently have a diversity and inclusion strategy or plan to adopt one in the next 12 months; also, 86% of female and 74% of male millennials consider such policies on diversity, equality, and inclusion when deciding which company to work for.
• Working with people with a range of backgrounds, experiences, and working styles allows for opportunities to learn and grow all around. Encountering other diverse views make for better decisions and drive a culture of high-performance.
• A lack of diversity often results in higher attrition and reduced retention for those with higher skills and experience.

Even more that pride can do

Pride in their workplace gives employees the confidence to allow for a larger platform for innovation, creativity, and a diversity of perspectives. It gives employees the security to produce their best work. It also promotes individual wellbeing and this gets shone back on the company. Sixty-five percent of employees feel that an environment with respect given to a diversity of employees is crucial to their job satisfaction. Pride in one’s workplace is a worker’s strongest driver of happiness on the job.

And this: Inclusive companies enjoy 2.3 times more cash flow.

How to attract diverse talent
Diversity and inclusion programs have been described as a way of building people up from the inside out. It also builds an environment that’s more attractive for prospective employees. This wider range of voices in turn creates more innovation and creativity.

Despite all of this, diversity and inclusion within the legal industry are rare. Old ways die hard. But there are ways to help fix this problem. Law firms can take it upon themselves to give diversity a priority.

This can be accomplished by:

• Removing criteria that isn’t necessary for the position you’re hiring for. Some criteria promote bias in hiring.
• Understanding that diversity involves more that race and gender. Be aware of other forms of diversity such as disabilities, religious traditions, age, and more.
• Building a system of evaluating candidates that allows you to evaluate all in the same way, every time will also help reduce bias.

Next: Interviewing, organizing, & delegating
With values established and appreciation of diversity and inclusion in place, now you begin the process of finding the right candidates: Those in leadership roles must onboard new hires for success through proper management.

Chart your organization and begin defining your firm’s main roles and responsibilities. This will include the tasks of business as well as those of management and leadership. These roles and responsibilities will include:

• Client intake
• Project management
• Sales and marketing
• Litigation
• Accounting and billing

With list in hand, you’ll have a better idea how to prioritize which roles to hire for first. This list is a fluid document and will change by circumstance or growth in business or staff. Whichever roles aren’t covered will have to be delegated to other existing staff, new hires, or outsourced to outside service providers.

Best Practices: Interviewing potential candidates
Attracting candidates and screening résumés can be done internally, which can be time consuming, or outsourced to legal recruiters or job sites and boards that provide an array of services to help you through the process.

HiringPartner will post your legal jobs to multiple job sites, organize them through their applicant tracking system (ATS), and make the review process much simpler. Law firms can schedule interviews with matching candidates and reject those that don’t meet the qualifications of the job. Then, candidates’ information can be stored, sorted, and matched to future openings.

• Preparation: Before the interview, consider what you’re looking for in an attorneys or legal staff new hire and prepare your questions and talking points accordingly.
• The face-to-face meeting: An initial interview generally goes for 45 minutes to an hour.
• Assessment: Evaluate the candidate’s talent and insights by asking the right questions. Asking them to self-assess—“What’re you biggest strengths and weaknesses?”—isn’t so helpful. Better to ask the candidate how they might solve a problem in your firm or how they might make a process more efficient. Consider what their role might be and ask questions on that basis.
• Respond: Allow the candidate to ask questions of their own. What they choose to ask may give you further insight into their talents and experience.
• Cultural fit: Share with them the firm’s values and mission and assess how the candidate may fit in based on their responses.

Keep in mind there is no foolproof system for selecting people for jobs. “An inexact science at best,” said one consultant. Though, few applicants will outright lie on their résumés, they may bend the truth or inflate their background, job experience, titles, and education. The best way to cut through such embellishments is in asking the right questions. Yet, no matter how deep you dig into a candidate—psychological assessments, tests, reference checks—ultimately, after all of your screening methods have been considered and applied, it all comes down to your gut and individual judgment.

Communication is key
You firm may end up having legal staff and contractors spread across departments and multiple locations including working remotely. Smooth operations and collaborations will depend on open and honest communication.

Building open & honest communication
Such communications is necessary for developing trust between you and your staff. It also boosts employee morale and builds positive relationships within the team. Here’s how you can build that:

• Employee handbooks: A handbook can be posted and available online. It’s a good place for outlining your firm’s mission, values, procedures, policies, codes of conduct, and more.
• Communication technology: There’s no excuse for poor communication with all the available technology. Communication tools can build collaborative teams regardless of where anyone is at a given time.
• An open-door policy: Encourage your law firm staff to come to you with questions and concerns. Every employee is a de facto representative of the law firm and its business. This will help your attorneys and legal staff stay current with what the firm is doing while building a bond of trust between you and your employees.
• Two-way communication is good: Encourage feedback and solicit it when it’s not forthcoming. Ask your team about progress on cases and other projects. This feedback can be useful for improving communication and business strategies.

Why quality management is crucial Law firms are only as good as the people within them: Attorneys generally decide to leave due to their superiors—not the law firm itself. Supervisors who retain good staff save your firm big money (see above). Make sure they’re well trained and trained often. Managers are the firm’s future.

What you should expect from a good manager:

• They are skilled communicators: They communicate well with subordinates and are able to generate trust. They offer solid feedback, contributing to your law firm’s overall productivity and efficiency.
• They are productive: They move projects forward, do good work, and get the same from those around them. They know how to set realistic goals and the strategies needed to achieve them.
• They can boost morale: They convey trust, confidence, and enthusiasm. They make their team feel the same.

Creating a fair compensation & benefits structure for all
There are a lot of variables when it comes to law firm hiring and staffing. When considering all tasks asked of staff from client origination credit to non-billable administrative responsibilities, deciphering good compensation models and formulas isn’t easy. Bottom line: Create a system that rewards what brings the most value to your firm’s core values and discourages that which diminishes them.

When deciding on a fair compensation package, first ask these questions:

• Is it competitive?
• Hourly or salary?
• Is there health, dental, or life insurance?
• Bonuses to reward performance?
• How will pay increases be handled in the future?

Ideally, you find a structure that will motivate employee performance while fitting a target bottom line. Research what your competitors offer. Be realistic about your resources and what you can afford. There may be more than one right answer.

Provide meaningful Performance Reviews & appropriate promotions
According to studies, employees satisfied with their performance feedback are more engaged and committed to the organization. As noted above, engaged employees perform at higher levels than those that aren’t. To help achieve this, it’s critical to give quality performance reviews. Through them they will better understand their strengths, how they can benefit the firm, and see growth opportunities.

How to conduct a meaningful performance review:

• Prepare: Be prepared to dig deep into all aspects of the employee’s work to identify the positives and negatives that deserve attention.
• Offer productive feedback: Don’t just grouse about the bad; share the positive too. Give constructive advice on ways the employee can improve and how.
• Make it a discussion: Encourage their questions and concerns. Allow the person under review to speak freely and openly to build a better understanding about their roles, responsibilities, and concerns.
• Ask for feedback: Ask for feedback one how they feel the performance review went and what you can do to improve your role as a reviewer in the future.

It’s important to note that promotions cost far less than replacements. Most look for companies that allow a path up a ladder; if such opportunities don’t exist, retention levels decrease—more than 70% of high-retention-risk employees will say they’ll leave their organization to advance their career. Therefore, it’s important to award high performers with proper promotions to retain talent.

Eyes ahead: making a succession plan
What of the next generation? Or, if for whatever reason, an attorney is no longer able to practice? And in this process, the organization, roles, and responsibilities may change and it can be good for your staff to know in advance.

According to the ABA, an effective succession plan might look like:

• Written instructions concerning the storage of client and account information
• Information concerning the disposition of closed client files and information about the equipment leases and various contracts
• Information about the payment of current liabilities
• Access information for computers and other pieces of technology
• Information about compensation for the successor

Create a succession plan to help ease stress and maintain organization when death or retirement occurs in your firm.

Think of hiring & staffing your law firm as aspirational
In the process, you’re creating the firm you’ve imagined. And though it’s a complex procedure, it’s also an opportunity to celebrate what’s best about your firm and the industry itself. You’re building and growing a firm your staff can be proud to be a part of. By appreciating and exercising your obligations as a leader, putting a plan and strategy into place, and being true to your vision and values, you’ll staff your firm with the best people to move it forward.

About Harrison Barnes

Harrison Barnes is the founder of BCG Attorney Search and a successful legal recruiter. Harrison is extremely committed to and passionate about the profession of legal placement. His firm BCG Attorney Search has placed thousands of attorneys. BCG Attorney Search works with attorneys to dramatically improve their careers by leaving no stone unturned in job searches and bringing out the very best in them. Harrison has placed the leaders of the nation’s top law firms, and countless associates who have gone on to lead the nation’s top law firms. There are very few firms Harrison has not made placements with. Harrison’s writings about attorney careers and placements attract millions of reads each year. He coaches and consults with law firms about how to dramatically improve their recruiting and retention efforts. His company, LawCrossing, has been ranked on the Inc. 500 twice. For more information, please visit Harrison Barnes’ bio.

About HiringPartner

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There are many job boards, applicant tracking systems, and ways to recruit law firm attorneys out there—but there is only one Hiring Partner. Hiring Partner is the most powerful legal recruiting tool ever for law firms. In other words, Hiring Partner is not just an organizational tool, but also a talent magnet. For more information, please visit https://www.hiringpartner.com/