Effective Hiring: A Primer for Law Firms in a Competitive Market

by Marcus Ollig

While the importance of hiring well might seem obvious in an industry where your people are the most important differentiator, it can be surprisingly difficult. The explosion of associate salaries due to the fierce competition for top-notch talent makes hiring well even more imperative. Aside from the direct costs of turnover, the ramifications of hiring an attorney who is not the right fit are far-reaching.

Effective hiring and profitability

Hiring the right people is important for two reasons. First, you cannot provide effective service to your clients and improve profitability (or sleep soundly) without hiring effectively. Second, turnover is expensive. An internal study by accounting giant Deloitte & Touche, found the firm lost approximately 150 percent of the annual salary of each professional who quit. There are significant operational similarities between accounting and law firms. If that figure is applied locally to the average salary of a Denver attorney, the average cost of turnover is in excess of $160,500.

A study by William M. Mercer found that for every one percent increase in employee productivity, profits can swing as much as five percent. In an industry where you sell your time, that statistic is probably conservative. Better employees are more productive. Reducing turnover, even slightly, boosts productivity exponentially.

How do you hire the most productive long-term employees?

First, know who you are:

• How you differentiate yourself in the market for both clients and in the war for Talent.
  
• That understanding needs to be deepened by identifying "star performers" and the traits that brought them success. These are the people who have performed at the highest level over time, have been promoted and are widely seen as vital to your firm's success.
  
• Your culture and reward systems - are these aligned with the types of people you are trying to attract and retain?

Understanding the issues that underpin the success of these key performers allows you to develop questions and an interview process that will assist you in recognizing people who are a stronger fit to your organization. People hired accordingly will stay longer with your organization and be more productive while there.

"Complete" Attorneys through comprehensive on boarding and training

Hiring the right people is part of the solution. Your associates need mentors and training. In many studies about turnover, both formal and informal training have been cited as the single most important factor in improving retention. This starts before your new hire arrives for their first day. Successful on boarding and training could be another article, but here are some points to remember:

• Make sure your new employees environment is ready for them their first day. Their office, computer and other equipment, business cards, etc. should be ready.
  
• Have members of the firm stop by to welcome the new employee and make sure they have a lunch scheduled with their immediate supervisor.
  
• Train them in matters of firm history and culture, the goals of your practice group and firm, etc.
• Identify potential mentors and provide on-going training opportunities.

Aside from training associates to be strong legal counselors, your new hires need to be immersed in your differentiator, focused on delivering results for your clients and trained to market your services. You may have a great differentiator, competent and technically sound attorneys who are focused on your value proposition and on your client's needs. However, you still need get the word out. Bring marketing front and center in your firm and have your strongest rainmakers be mentors for your associates.

Next, you are in the service business. A large part of building a successful practice is the referrals that come from delivering superb service to your clients, especially in smaller markets, which tend to be more relationship-driven. You need to stress service delivery from every member of your organization and in every interaction they have with your clients.

Invest in your newest team member. This provides a quicker turnaround on investment for your firm, and the skills, service and marketing training you provide will assist your newest attorneys to achieve their goals more readily. Successful people are more satisfied employees.

Compensation and Rewards Programs

How you reward your employees should also reinforce your values and enhance retention. An inadequate compensation/reward structure will not be conducive to retaining the key talent that is essential to ensuring the success of your organization. For instance:

• Your compensation structure should align with your goals, culture, and differentiator.
  
• It should reward key behaviors that help your team excel on behalf of your clients.
  
• Compensation should help drive growth and profitability, including balancing credit for personal (working hours) collections and credit for rainmaking, along with mentoring of younger attorneys and service.
  
• Your compensation structure should set you apart from your competitors helping you attract the types of candidates you need to build your firm.

The above ideas can help you make your compensation structure a key differentiator in your quest for the best talent in the marketplace.

While only an overview, these steps should assist you in hiring more productive, loyal employees, who help you build your firm.

Marcus Ollig is president of The Advocates, a legal search, staffing and consulting firm. His practice focuses on mergers, consulting and lateral partner placement. Phone: 303.825.2600; email: mollig@targetedlegal.com.