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Having Problems Recruiting Top In-House Legal Talent? This May be Why

Does it ever feel like the legal recruiting firm you're using is representing the candidate, even though you're on the hook for the placement fee?

Have you ever thought to yourself...

  • "Every resume the recruiter submits looks the same."
  • "Why do we keep getting the same candidates from different recruiting firms?"
  • "Why aren't we seeing high quality talent? Where are the ‘rockstar’ candidates?"
  • "It’s been 3 weeks since hearing from the recruiter. When will I see more candidates?"

I often hear my prospective clients complain about things like this when discussing their critical in-house counsel hiring needs. This is particularly so within many financial services firms, where the "success fee" ethos prevalent in the front office often extends (irrationally, I would argue) to the area of strategic legal talent acquisition.

Here's the thing: The problem isn't the legal recruiter or recruiting firm per se.

It's the "success fee" based contingency recruiting model that is fundamentally flawed and, frankly, benefits no one, especially a hiring manager seeking to fill a critical role.

Granted, some may say there's a perceived benefit to using contingency search firms in that there is no upfront risk to the hiring manager in terms of fees. This is classic "penny wise pound foolish" thinking. It's an illusory benefit that is far, far outweighed, as I describe below, by the painful downsides of the contingency recruiting model.

The crux of the matter is that the contingency recruiters you may be accustomed to working with have a business model that emphasizes speed and volume, not quality, with the objective of earning a fee – any fee – from numerous possible “clients.” It's a model that's based on a numbers game, with contingency legal recruiters typically having to work on 4 or 5 roles in order to make a single placement.

So these recruiters are naturally incentivized to act as "quick strike" candidate brokers rather than search consultants who partner with and act on behalf of their clients. They're financially driven to source the "best" available candidates that they can quickly and easily find – typically active job seekers and other "low hanging fruit" candidates – to try to earn a fee.

As a result, the resumes you receive are indiscriminately sourced, representing ineffectively screened prospects who, much more often than not, are active job-seekers. They are active candidates by virtue of being out of work, under-performing in their current role, or having an actual or anticipated life event or corporate downsizing scenario that's causing them be on the market.

There is often a huge qualitative difference between the best candidate on the market(active) and the best candidate in the market (passive). Most of the clients I work with retain me because of my ability to effectively identify, develop and recruit the highest quality passive candidates. That is, the “superstar” candidates who are happily employed where they are but could be persuaded to seriously consider a compelling new opportunity with your company.

Contingency recruiters unfortunately don't have the time, resources or incentive to find that truly exceptional passive candidate. Since they only close on one out of every four or five open positions they try to fill, they simply cannot do a deep dive on each search.

To make matters worse, I estimate that over 95% of contingency firms cannot afford to actually take on a search assignment and work on it for more than a few weeks.

Why?

Recruiters in contingency firms are either compensated on a 100% commission model (they are paid nothing on a monthly basis unless they collect a fee) or they are given extremely small draws or salaries which generally will not cover basic living expenses. Regardless of the level of talent or ability of contingency recruiters, they must earn fees quickly in order to survive.

This means that after two or three weeks, if they have not found the candidates that their client is interested in, they generally stop putting forth effort on the search and will thereafter resort to “throwing a resume over the fence” here and there, hoping to cash in.

And here's the dirty little secret that contingency recruiters will never tell you...

At the same time as they are submitting candidates – your potential hires – to you, they are likely also submitting the very same candidates to as many of their "clients" as possible, including your direct competitors.

Think about that and let it sink in.

Obviously, this significantly raises the risk of a finalist candidate you are poised to make an offer to withdrawing from your interview process, causing you to have to restart your search from scratch. This would be painful and costly in a myriad ways.

Why do these recruiters do this?

Simple: to increase their odds of making a placement and earning a fee. Remember, the contingency recruiting firm's only real commitment is to a quick burst of high-volume resume flow, and not to high-quality candidate development (which takes time and care). This is all in the hope of obtaining that elusive placement fee and surviving to fight another day as a viable business.

It's a race to find the best "low hanging fruit" candidates overlaid with a “throw resumes against the client's wall and see what sticks” mentality.

And when you layer in two, three or more contingency recruiting firms to work on your search, you really have no skin in the game. You create a scenario whereby none of the recruiting firms have any real sense of obligation to you.

Because, let’s face it, you are not an actual client!

Until money changes hands, there is no real client-recruiter relationship. The contingency recruiter will submit your best candidates to as many companies as possible to hedge their risk and increase their odds of generating fee revenue. It would unrealistic for you to expect the recruiter to act any differently.

So how can you position your search for success and avoid the pain of a critical mis-hire?

Simple, really.

(I freely admit to being biased about it, though).

To maximize your odds of identifying and hiring an exceptional "walk on water" candidate for your legal department, whether for a general counsel role or a business-critical position on the GC’s team, make sure you retain and work exclusively with an experienced legal recruiter you trust.

You have to be prepared to have some of your own skin in the game by way of paying an up-front (and mid-search) retainer. But in doing so you are effectively securing that recruiter's commitment to providing the highest possible standard of service and delivering fully vetted, personally screened, best-in-class candidates who fit your culture.

The retained firm will be your agent and true talent acquisition advisor, ensuring a deep and thorough dive into the passive candidate marketplace. They will partner with you in a full value-added relationship to understand your business and culture, resulting in focused sourcing of high quality candidates who are a professional and cultural fit for your organization.

And you can rest assured that a quality retained legal search firm will not submit candidates that are "in play" for your critical hiring need to any other of their clients during the term of your search.

So if you have critical or strategic hiring need and want to hire the best possible legal talent in (and not on) the market, you should work exclusively with a retained search firm with deep domain expertise recruiting general counsels and their teams.

I know from personal experience that they will work tirelessly on your behalf, committing extensive resources to the search until your expectations are met and exceeded!

 

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