While the legal hiring market seems to have cooled since Q4 of 2022, finding the right talent continues to be a challenge across most industries and functions. The life sciences industry is no exception. We have seen subtle shifts, but no significant departures from a focus on recruiting and retaining talent. Below are some of our observations.
Attracting talent: Candidates still hold the cards
While there has been some buzz about lawyer layoffs, most of these are happening in law firms and the tech industry and are not occurring in the life sciences space. Even when layoffs at law firms do occur, firms are continuing to make strategic hires in key practice areas. Most are reluctant to repeat massive layoffs that may result in glaring talent gaps—which is what happened to many during the Great Recession.
In corporate legal departments, there has been some restructuring and streamlining for the sake of improving efficiencies. However, we are not hearing about widespread layoff activity. The market continues to be dynamic and mostly candidate driven. Strong candidates who are in the market are still balancing competing offers, even if slightly fewer than before. As always, opportunities in this sector are very much dependent on the position, industry, and geography as well as the lawyer’s skill set and expertise. But for lawyers ready to embrace a new challenge, there are options available.
Stability is becoming more valued
For the past few years, candidates were willing to assume some risk in exchange for leveling-up to a higher-profile role with a more esteemed title and broader responsibilities. That remains true; professional growth and advancement are still vitally important to candidates. However, we are seeing a slow shift toward prioritizing stability. Candidates are increasingly concerned about the viability of a new role or young company. They are more reluctant to jump ship for a new opportunity if they are already in a secure position at their current organization. Current market conditions are also causing some candidates to hesitate to even consider making any move.
A streamlined hiring process is important
Given today’s hiring climate, we are noticing that clients with more efficient recruiting processes have greater success in closing deals with desirable candidates. When companies are sluggish in their deliberations and insist on a lengthy and complicated interview process, they risk losing top contenders along the way. Those lawyers are typically already weighing multiple offers as well as the option of just staying where they are.
At Major, Lindsey & Africa, most of our slates are smaller and more selective than in prior years due to an explosion of recent job changes. Many candidates have made career moves within the past 12 months or so, and there is not as much incentive to consider a change so soon after accepting a new position. This gives clients a golden opportunity to fine-tune their hiring process and make timelier decisions, which can prevent them from missing out on key talent.
Compensation calls for some creativity
In-house compensation has increased significantly in the last few years— in an attempt to keep pace with rising law firm compensation. This means top candidates are looking for uniquely competitive compensation packages. In fact, this is the single most important factor in getting candidates off the fence. Understandably, they want to ensure their salary and benefits offset any risks they face. That is why most people are not likely to make a move for a lateral compensation package.
Incentive grants, both in the form of cash and equity, are playing into candidate decisions to consider a move and assess competing opportunities. Clients may need to consider higher sign-on bonuses and/or grants of equity to help balance out their offering and make up for what candidates may be leaving on the table.
Work location flexibility is still a major draw
As the pandemic continues to recede, many organizations are focusing on return-to-the-office policies. And they are finding candidates still demand flexibility in their work arrangement—if not 100% remote, then the option for a hybrid work arrangement. We are seeing that clients who are most flexible in terms of remote work and geographic location have an easier time attracting premier talent. They also have the chance to draw qualified lawyers from broader geographies, thus enhancing their pool of candidates. Companies looking for a specific skill set or who have an inconvenient office location may need to be more open-minded about where their lawyers can work.
What about retaining talent?
Employees understand America’s unemployment numbers remain low, although rumors of layoffs are creating some reluctance on the part of employees to rock the boat in their current roles. They know the market still sways slightly in their favor, and that companies are hungry for outstanding talent to help them grow and prosper. However, as mentioned above, job stability is a growing consideration for even the most sought-after candidates. A strong, positive workplace culture can have a big impact on an employee's decision to stay. People who feel valued, supported, and engaged with their department and their work are less likely to consider going elsewhere.
Compensation cannot be overlooked, either. The increasing focus on pay transparency is prompting more employees to assess their salary and benefits. If they feel they are not fairly compensated they are likely to be more incentivized to ask for higher compensation or explore other opportunities.
Given this strong and continuing trend, it will become increasingly critical for clients to evaluate their departments, using benchmarking metrics, to determine the competitiveness of their department salaries, bonus percentages, and equity awards. In-house compensation growth over the last few years makes this even more imperative. High-performers want robust compensation packages in exchange for longevity. This means companies must be ahead of the curve. We are seeing many clients issuing stay grants in the form of incentive equity grants or retention cash bonuses to keep their best lawyers from straying.
Talent retention is also highly dependent on work arrangement flexibility. While many employees expected a forced return to the office, these mandates are turning out to be more the exception than the rule. To retain team members who value flexibility, companies have embraced remote work with gusto—at least part of the time. A hybrid workplace policy provides more autonomy to employees while balancing it with the collaboration and structure afforded by days in the office. In a survey by Cisco, 78% of respondents reported that remote and hybrid work contributed to improvements in their well-being.
Despite alarming headlines about economic turmoil, the labor market remains tight. Employers in the life sciences and other sectors cannot afford to become complacent. It is as important as ever to move in-house legal candidates swiftly through the hiring process, craft competitive compensation packages, and offer flexible work arrangements. Clients also need to apply these same practices to retain existing employees who, at any given time, may be exploring other options. No matter which way the hiring tide turns, companies that stay adaptable will be in the best position to secure the talent they need to thrive.