Improving recruitment and retention of the best talent in legal firms

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By Douglas Russell and Neil Sevitt

In the last five years, we have seen a significant shift in the ability of legal firms to recruit the best candidates. The Covid pandemic and Brexit changed a lot in terms of available candidates, but other shifts in generational priorities have also contributed to a very different playing field.

At Armstrong Watson, we hold regular breakfast briefing events for law firm leaders where we aim to improve the business of law. This article summarises some of the key discussion points, as well as conclusions and recommendations from the sessions that we ran in conjunction with Andre Thomas of Thomas Telman Consulting on people strategies for legal firms.

3 key challenges around recruitment and retention of existing talent:

1. Competition

A shortage of suitable candidates in the marketplace means more firms competing locally for fewer candidates, coupled with upward pressure on salaries. This is compounded by competition from larger firms, particularly from London and the South East, which are offering highly competitive salaries for individuals happy to work from home. Platform firms also provide flexibility in work patterns and choices for individual fee earners while still creating good income levels by operating within the fee-sharing model.

 

2. Generational changes

We are observing very different behaviours in the younger generations, with flexible working, non-financial benefits and the culture of firms now being just as important as the salaries on offer. Work-life balance is often quoted by candidates as more important to them than salaries, and the days of working long hours seem behind us. Those at the start of their professional lives may also not wish to spend their career within one firm and have broader horizons for multiple experiences. This could create challenges for future succession within traditional law firm ownership models.

 

3. Ownership of the firm

Candidate choices may also be influenced by the firm’s ownership. Some candidates might gravitate more towards firms that are private equity-backed, as they see more chance for a good salary and career progression. The reverse could also be true, in that candidates may view progression and possibly ownership opportunities within firms as more closed in the larger, corporate PE-backed firms, compared to traditional ownership models.

 

How can law firms improve recruitment and retention?

There are a number of ways legal firms can look to improve their chances of recruiting and retaining talent. These include:

• Remuneration packages that give some choice by way of salary and benefits. Salary sacrifice options like pensions/cars, as well as the ability to buy more annual leave, have proved very popular and tax-effective.
• Flexible Working, which is not exclusively about hybrid working, but could include variable hours, for example, to accommodate childcare during school holidays.
• Developing talent from within by nurturing junior staff, offering structured training programmes and clear progression pathways. This is an increasing strategic approach adopted by several firms we have worked with, who have embedded this in their future strategy, albeit as a longer-term solution to the tight recruitment market.
• Understanding what each of your people is looking for within their careers and encouraging Personalised Development Plans.
• Effective line management. Your people will often see the business through the eyes of their line manager.
• Embracing AI and finding different ways of working that automate some work types.
• Looking after your employees by providing wellbeing initiatives, such as financial wellbeing programmes .
• Offering attractive bonuses for existing employees who successfully introduce a candidate into a vacant position.
• Possible introduction of employee ownership models for example, an Employee Ownership Trust.

 

Some or all of the above may help reshape recruitment for the future; however, in our conversations with legal firms, it is clear that the culture of your firm might offer the best possible chance of attracting and retaining the best talent from the pool available to you. A firm that has a clearly defined culture that is seen as fair, supportive and inclusive will appeal to candidates as something to be part of. If your firm is a great place to work and a great place to do business, then the candidates will come…and hopefully stay!