In the Event of a Recession, the Consulting Model Will Come to the Rescue


I started my recruiting career at the end of 2004. It was a good time to be a recruiter. The economy was strong. Companies were hiring incessantly, candidates had myriad employment options, and they were undoubtably getting attractive salary increases as they moved from one company to another. The job market was so strong that we were experiencing a war for talent. 

Then the Great Recession happened, and everything changed—in a major way. For those who need a brief refresher: The Great Recession was driven by a housing bubble. America’s home values plummeted by an average of 33%, or $2 trillion. There were record layoffs. Some large companies such as Lehman Brothers completely evaporated. The Dow Jones Industrial Average (DJIA) fell by 777.68 points in one day, a record at that time. Unemployment hit 10%. 

Enter 2022. The United States has not seen a true recession since 2008. Oh, the COVID lockdown in 2020? Arguable. This “recession” only lasted for two months and was driven exclusively by a voluntary shutdown of what at the time was an extremely robust economy. After this brief “recession,” unemployment got back down to a historic low of 3.5%, home prices soared more than ever, and the stock market did the same. 

But what is happening now? Are we in a recession currently? Are we heading into one later this year? 2023? Like everyone else, I do not have the ability to extract details about the future of the economy from my crystal ball. But having lived through the Great Recession as a recruiter, I find myself preparing for something potentially similar to the ominous dynamic of being a recruiter when there are more companies laying off employees rather than hiring them. I think that both employers and candidates would be wise to do the same. 

One way employers and workers can prepare for a tightening of the financial belt while simultaneously experiencing a continued abundance of work is through contract positions. For example, the consulting attorney model is one that continues to gain momentum in the industry, as it offers decision-makers the ability to hire talented employees without increasing headcount, it creates staffing flexibility, and it ultimately results in great cost savings to legal departments. For lawyers, these roles open doors to new opportunities, provide stability, and allow them to put their skills to good use in new ways. While this model is extremely advantageous in a boom economy, it is even more of a secret weapon for both hiring managers and candidates during a slowdown. 

In a downturn, employers/hiring managers can use this model to: 

  • Add staff without adding headcount: In most cases, hiring managers need to obtain approval to bring on additional staff. This can be an arduous process, and often, they must wait until the following quarter or even fiscal year to start. Sometimes even longer. Bringing on contact staff alleviates this hurdle, as the expense can be taken from elsewhere in the budget.
  • Create breathing room: Business operations and demand are very dynamic. For example, in my industry, legal matters come and go, and they range immensely in size and scope—from major litigations, acquisitions, or internal initiatives to economic factors, industry dynamics, privacy laws, or new/changing governmental regulations. Having a flexible “special forces” staff that can ebb and flow with changing demand creates an extremely efficient team.
  • Save the department money: Labor is the largest expense for most companies, and can account for up to 70% of total business costs. Consulting staff is not included in headcount. They also do not contribute to the many costs associated with having employees on your staff: state and federal payroll taxes, workers compensation, vacation and holiday pay, 401K, healthcare plans, incentive plans, etc. Payroll expenses are covered by the recruiting firm as we are the employer of record. Many of the other employment benefits are covered by the recruiting firm, depending on how generous they are. 

For workers who find themselves on the hard end of a downturn, consulting roles offer a light at the end of the tunnel. Consulting roles:

  • Offer employment when the number of candidates far outnumber job openings: When the job economy slows and companies slow down on hiring, implement hiring freezes, or even lay off employees, employment opportunities still exist for contract employees. This is especially the case in legal departments, where many times the work does not slow proportionately to the rest of the company, and at times even increases during a slowdown.
  • Give candidates the opportunity to work at a variety of companies and learn under different managers/mentors: In generations past, employees would often stay with the same employer for their entire career. This is great for comfort and stability; however, it can restrict an employee’s learning capacity and well-roundedness. Pursuing contract roles can land employees in companies within a variety of industries, giving them exposure to a multitude of regulatory guidelines, industry nuance, products & services and more. Additionally, employees get to work for different managers and colleagues, giving them exposure to diverse perspectives and varied styles and intellects, resulting in better-informed, well-balanced, and more marketable individuals.
  • Provide financial stability during good times and bad: In most cases, consulting roles pay more than the annual salary equivalent of permanent positions. Since consultants do not receive some of the non-salary benefits that permanent employees do, they receive this cost equivalent in the form of their salary or hourly rate, meaning their take home pay is usually quite lucrative. Additionally, consulting attorney often qualify for overtime. 

Where the economy goes from here nobody knows. The good news is that there are new and expanding alternatives to standard employment arrangements, and these alternatives have gained—and continue to gain—popularity and acceptance, creating mutually beneficial relationships between employers and employees and opportunities when times get tough.


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