Potential Consequences of the Legal Profession’s New Talent War

The competitive hiring market is driving new approaches to attract and retain top-tier candidates — but is that good for business?

It’s a great time for lawyers looking for their first jobs and more seasoned associates considering a change of employer. But that’s not so good for employers.

Earlier this year, “Biglaw” made news for elevating its first-year salary offers past $200,000. And rumor has it that many firms are offering significant retention bonuses to more experienced hires in select practice areas. Across the country, the scarcity of qualified applicants has raised the stakes for firms and legal departments signing top candidates. 

While talent “war” is a bit dramatic, recruiters are waging minor battles for in-demand candidates. And some in the industry worry about the potential for long-term collateral damage. 

New complexities impact the fight for talent 

There is nothing new about top players in the legal profession engaging in bidding wars for great candidates. For decades, the industry has been open about sharing starting salaries for recruits from the nation's top law schools. Current compensation standards among the most competitive (Biglaw) firms are common knowledge or easily discovered by anyone with an internet connection.  

But Covid-19 threw a big wrench into law firms’ and in-house legal departments’ hiring practices. The traditional new-talent pipeline has been disrupted, in-person recruiting efforts were stalled, and all-virtual interviewing presented unique difficulties. And many first-year jobseekers still attending law school virtually decided not to interview until the worst of the pandemic passes. This has left many organizations dealing with pandemic-related candidate shortages. 

In addition, the “Great Resignation” has caused turnover among more experienced associates. And many job seekers are assessing potential employers’ management of the Covid-19 crisis and eliminating those whose policies do not align with their values. As a result, firms and companies that enact inflexible rules for remote working, for example, may find a smaller applicant pool. 

Organizations without the right “branding” are vulnerable 

It’s never been more important for legal leaders to define their organizations’ values and cultural expectations. Today’s candidates are more likely to at least partially choose an employer based on their track record on diversity, equity, and inclusion (DEI) and environmental, social, and governance (ESG) matters than their predecessors. If your organization’s messaging in those areas is outdated, it’s likely time to redefine and clarify it.

When social media informs many decisions, maintaining a positive brand presence online should also be prioritized to attract talent. Candidates will be looking at an organization’s reputation for work-life balance, flexibility, and being on the “right” side of key issues. 

Increased turnover rates have a long-term impact 

The current “mismatch” between supply and demand in the legal industry makes it a candidate's market. As a result, firms and legal HR professionals are casting a wider net and considering applicants that may not have made it through an initial screening process in the past. It’s a perfect opportunity for first years and associates looking for a chance to work for a Top 10 or Top 50 firm, if only temporarily. 

When hired, these candidates may find adjusting to their new employer's culture and workload expectations difficult. But that’s not always a bad thing: some new lawyers will rise to the challenge and achieve more than anyone expected. But others will burn out and pursue a less demanding professional environment. This paradigm is not entirely new, however. While the pandemic-related shortage of legal candidates may be accelerating the phenomenon, it did not invent it.

Nevertheless, a possible significant increase in turnover negatively impacts employers. Recruiting, hiring, and training talent is labor- and cost-intensive. Thus, it’s still important not to rush the evaluation and interview process to sign a candidate without proper due diligence. 

On the bright side: Positive changes in the legal sector

The battle for talent is occurring as many law firms and legal departments face an information technology reckoning. The pandemic illuminated weak areas in many organizations’ networks and communication abilities. As a result, many of them must upgrade their technology to remain competitive on the hiring front. The push for more automated business solutions, a need to accommodate remote workers, and the growing threat of cybercrime are bringing much-needed change to many legal workplaces.

In addition, the talent competition is raising the profile of quality-of-life and leadership issues. A recent report by McKinsey suggests that employers can “win” the war of worker attrition by simply listening to their employees. 

The McKinsey study found that many employees feel unheard by senior leadership, who create policies without input from the people they will most affect. So, the tightening of the labor market may cause legal leaders to become better listeners — with positive consequences for all parties. 

Carrington Legal Search is celebrating 20 years in business: we were in the trenches with our clients during 9/11 and 2008. We partner with our clients to identify leaders and mission-critical talent to shore up and grow companies even during the most challenging times. We are here for you! To make our nationwide network work for you, get in touch at 512-627-7467 or email carrie@carringtonlegal.com.