February 4, 2008
Creating Sticker Shock
We are often faced with the problem of attempting to explain to law firm managing partners why compensation surveys for administrative positions give salary levels that are substantially below what seems to be required to recruit in the marketplace. For example, we recently handled a search for a large firm where the COO had been in the position for 15 years and was paid $300,000 plus about a 10 percent bonus. Based on survey data, the position was paid above market. But when the firm started interviewing candidates, they found they would likely have to pay $450,000 or more for a successor. In another recent search for a firm where the position had paid $148,000, the firm ended up paying $225,000.
The differences are based on two facts. The first is that incumbent law firm staff members have, on average, received annual merit increases averaging 3.9 percent over the past five years. During the same period, the market for administrative positions has more closely mirrored associate salary increases and risen at a rate of 10 to 12 percent per year. The surveys measure the salaries of the incumbents who may be paid well below the market rate. The second reason is that the risks and non-reimbursed costs of changing jobs for most candidates necessitate at least a 20 percent salary increase to justify moving to a new position. Since firms rarely recruit for a candidate who is less qualified than the person who is leaving, there is a built-in increase necessary to attract candidates. Bifurcation of Law Firms Expands
The next time you talk to a disgruntled associate, you might want to show them how the other 80 percent of their peer group is paid. Despite the attention drawn to the associate salary wars occurring among large law firms, a study by NALP shows a dramatic difference in the actual salaries paid to new lawyers. The survey for law school graduates in the class of 2006 reminds us that there are really two recruiting markets in the U.S. Of approximately 36,000 graduates in 2006, 75.3 percent obtained jobs for which bar admission was required. But, of those graduates, only 20 percent took jobs with law firms of 100 or more attorneys. The graph below is based on 22,665 salaries with a few extremely high and low salaries excluded for clarity. The first peak reflects salaries of $40,000 and $50,000 (each representing about 11% of the reported salaries). The second peaks are at $135,000 (10% of reported salaries) and $145,000 (7% of reported salaries).
Diversity Hiring
For those who felt the number of minority candidates was declining, they may be right. According to the NALP study above, among Black/African-American graduates, only 46% took jobs in private practice as compared to 58% of whites and 60% of Asians. By the same token, women took governmental, judicial clerkship and public interest positions over men by 31% vs. 25%. Older graduates were less likely to go into private practice. Only 44% of graduates age 41-45 and 39% of graduates over age 46 went into private practice compared to 61% of those aged 20 to 25. Dressing for Success
An article in yesterday’s Wall Street Journal underscores what we have heard from law firms for the past couple of years. The way young lawyers dress has a huge impact on their work assignments and business development opportunities. That is, lawyers who routinely dress in casual clothing are selected less often to participate in client presentations or to take lead roles in sophisticated matters.
As recruiters for senior administrative positions we have seen precisely the same effect on the position authority, respect and compensation of administrators based on their dress. We can’t help but observe that an amazing number of administrators (especially COO’s and CIO’s) who complain about micromanaging supervision, seem to bring it on themselves by failing to dress in a manner that presents a professional and confident appearance. Behavioral Interviewing
We have observed that an increasing number of law firms are using behavior interviewing in assessing candidates for senior administrative positions. Behavioral interviewing is a technique aimed at predicting a candidate’s suitability based on previous behavior. Typically, the interviewer will present a situation and ask the candidate to describe, in detail, how they have handled similar situations in the past. Often the situations involve interactions with “high maintenance” partners, disgruntled clients or forms of harassment or discrimination.
Behavioral interviewing can be a powerful tool but can also give terribly inaccurate evaluations of a candidate and, at the extreme, can open the firm for charges of discrimination. If you elect to use behavioral interviewing, or are aware of members of your firm using it, you may want to consider the following issues:
- Avoid situations that are extremely complex or controversial. The candidate may get lost in the minutia and fail to respond appropriately.
- Avoid situations that represent “damned if you do, damned if you don’t” situations.
- Avoid “truth or dare” type questions that could be embarrassing or offensive (particularly if they could involve religious or political beliefs).
- Prepare situational questions in advance and test them on current staff members who are performing well.
- Ask the same situational questions of all candidates for a specific position.
- Avoid questions that are too similar to actual situations in your firm. There is a risk that your evaluation of the response will be tainted by subjective and factual information the candidate does not have.
- Don’t use behavioral interviews too early in the selection process. Wait until the second interview when the candidate feels more comfortable and is more likely to give a less guarded response.
- Remember, candidates will infer that the situations you describe represent the actual culture and nature of relationships in your firm.
- Offer training for interviewers intending to use behavior questions. Most HR publishers have such training programs.
The Price of Telecommuting
As telecommuting becomes a part of the routine practice of law in many law firms, the availability of this option to some lawyers may have an adverse effect on others. The conventional wisdom has been that telecommuters are “out of sight, out of mind” and risk getting less favorable work assignments and opportunities for partnership. Surprisingly, a recent study by the Lally School of Management at Rensselaer Polytechnic Institute seems to show that increased telecommuting may lead to increased disgruntlement by non-telecommuters.
Some of this potential disgruntlement may be old fashion jealousy akin to sibling rivalry. The telecommuter is seen as getting away with something. But to a larger degree, there appears to be some truth in non-telecommuting lawyers’ concerns. Associates working in the office tend to get tagged for more last minute “grunt work” projects, whereas telecommuters’ assignments tend to be better thought out and more organized. Lawyers working in the office perceive that they must handle more simultaneous matters than telecommuters and have more billable hour sapping interruptions. They are prone to believe that they have less flexibility and must sustain a higher work load. Further, they feel that the burden of coordinating matters and communicating falls on them. As one associate told us, “When you call a person on another floor and they don’t answer, you assume they are in the library or a partner’s office. When you call a telecommuter, you assume they are out shopping.”
Not surprisingly the solution seems to be greater communication. One of the primary actions involves establishing a very clear set of rules and expectations for telecommuters including processes that may be more restrictive than those required of lawyers working in the office.
For a copy of our white paper on implementing a telecommuting policy, click here or go to our website (www.LRGLLC.com). Legal Resource Group LLC specializes in serving the executive and administrative recruiting needs of law firms. We maintain the largest data base of law firm executive and Administrative staff in the world. This allows us to immediately identify the very best candidates. We find the best people, complete searches faster and have extremely reasonable fees. For further information, visit our website at www.LRGLLC.com , contact us by e-mail at inquiries@LRGLLC.com or by phone at 1-800-688-4147.
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