Effective hiring:A primer for law firms in a competitive market
Denver Business Journal
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
topnotch talent makes hiring
well even more imperative. Aside
from the direct costs of turnover,
the ramifications of hiring an attorney
who isn’t the right fit are
far-reaching.
Hiring the right people is important for two
reasons. First, you can’t 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 more than
$160,500.
A study by William M. Mercer found that for
every 1 percent increase in employee productivity,
profits can swing as much as 5 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, have been
promoted and are widely seen as vital to your
firm’s success.
- Are your culture and reward systems aligned
with the types of people you’re 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 help
you recognize people who are a stronger fit with
your organization. People hired accordingly will
stay longer with your organization and be more
productive.
“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. Some points to
remember:
- Make sure your new employee’s 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 ongoing
training opportunities.
Aside from training associates to be strong legal
counselors, immerse your new hires 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 to get the word out. Bring
marketing front and center in your firm and have
your strongest rainmakers be mentors for your
associates.
Next, you’re in the service business. A large part
of building a successful practice are 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 help your newest attorneys
to achieve their goals more readily. Successful
people are more satisfied employees.
Compensation and rewards programs —How
you reward your employees also should reinforce
your values and enhance retention. An inadequate
compensation/reward structure won’t be conducive
to retaining the key talent that’s 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.
These 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 help
you to hire more productive, loyal employees, who
will help you build your firm.
Marcus Ollig, president of The Advocates, a legal search, staffing and consulting
firm, can be reached at 303-825-2600 or mollig@targetedlegal.com.
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