The Battle for Talent

I am seeing more and more quality lawyers opting to work for the Big Four affiliated law firms rather than the traditional leading law firms (“Big Law”). With this trend, the Big Law leaders are facing not only the destabilization of their staffing and client service efforts but also negative marketing and potential client attrition in connection with the loss of talented senior attorneys.

How are the Big Four winning the talent battle? And, what can the management of Big Law do to stem the tide? Read on to find out.

Big Four: Healthy Eating Habits

Source: Thompson Reuters 2018 Report on the State of the Legal Market

It’s no secret that the Big Four’s law firms have been rapidly growing into major competitors of the traditional law firm brands. (For an interesting article on this topic, see PWC Legal - Another Baker & McKenzie.) For example, PwC legal already has over 3,500 lawyers in approximately 100 countries. For comparison purposes, Baker Mckenzie has approximately 4,500 lawyers in around 75 countries.

The Big Four firms can afford to eat big and grow their staff quickly due to their successful focus on attracting high-volume, process-oriented work. According to the Thompson Reuters 2018 Report on the State of the Legal Market, the Big Four brought in almost 1 billion dollars in revenue for this work. Although several traditional law firms have recognized the value in this low-cost work and have even spun off captive firms to manage it (e.g. Allen & Overy’s Belfast-based Legal Services Center), these efforts have brought in only a small fraction of the revenue earned by the Big 4 (approx. $150 million).

Big Four: Business Advantages

The Big Four have a sizeable advantage over traditional firms in competing for process-type work due to the following key success factors: (i) integrated services and (ii) technology.

With integrated services, the Big Four can satisfy client demand for one-stop shopping. For example, a client can get from KPMG a combined offer for both legal services as well as tax and advisory, helping the client avoid the cost and logistical difficulty of combining service providers.

As for technology, clients can take full benefit of the Big Four’s investment in developing innovative IT services for their audit and advisory teams. As a result, the clients can at least believe that they are receiving their legal services more rapidly and with fewer errors than they would from Big Law.

Big Four: Recruiting Advantages

Interestingly, the above keys success factors are also providing the Big Four with an important advantage in the recruiting market. For example, as their firms are integrated (or partially integrated) into the audit and advisory networks, they can take advantage of the talented HR departments. These departments are experienced with efficiently hiring hundreds of quality staff per year. As a result, they can help their law firms quickly beat out Big Law in making the first offer to job candidates. This first offeror status is important as candidates tend to overvalue their first offers (e.g. they think that the first company to offer appreciates them even more than the competition).

This HR efficiency is further supported by the underlying technology and process innovations of the HR teams. These sophisticated processes not only help the firms streamline their hiring approaches but also protect the individual lawyers from making cognitive bias mistakes (e.g. hiring lawyers just because they feel similar to the interviewer). BTW, if you are interested in cognitive bias mistakes in hiring, see this Forbes article.

A third recruiting advantage is that the Big Four firms typically do a better job of addressing lawyers concerns about personal and professional development. For examples, they are frequently much more transparent about the possibilities for career advancement. More importantly, they typically offer formalized training programs to manage the development needs of lawyers at each stage of their career.

Big Law: Regaining the Recruiting Edge

For many Big Law partners, there is still some denial regarding the ascendence of the Big Four firms. Not too long ago, top tier law school graduates would laugh if you suggested the idea of not going for the traditional law firm brands. (The idea of joining an “auditing” firm was even more crazy.)

However, nowadays, the Big Four are setting the agenda in recruiting talent and its up to the traditional firms to decide if they want to keep up. To achieve this, they should consider the following initiatives:

Let HR be HR
Introduce a Real Process
Formalize their Development

Let HR be HR

Many firms treat their HR people like glorified secretaries - a recipe for getting killed in the race for talent. HR teams need to be given the primary responsibility for managing the process in order to (i) ensure that their firms proceed through the hiring process in a timely manner (e.g. kick the ass of partners who keep postponing interviews and allowing the Big Four competitors to beat them in offering) and (ii) confidently communicate to the job candidates what they can expect from their firm’s hiring process in terms of timing, stages, etc. At the very least, these communications can reduce the likelihood of lost hiring opportunities caused by candidates misinterpreting the strange silent pauses of the firm’s hiring team.

Introduce a Real Process

If your firm isn’t doing this already, you can make your firm more impressive for job candidates if all of the interviewers and HR staff follow a standardized process. This standardization would include such matters as minimum/maximum days between interview stages, required mix of attorneys for all stages, and mandatory question categories and topics for all interviewers (in order to enable comparative analysis of interviewer feedback).

Formalize Their Development

As a final step, you can dramatically boost your firm’s competitiveness in the battle for talented attorneys by persuasively explaining how you are going to enable them to develop their talent further. Remember, these candidates are talented precisely because they have been focused on developing themselves throughout their law school years, and beyond.

In other words, you can’t keep feeding them vague stories about mentoring programs and “on-the-job experience”. But rather, you need to talk about formal programs with realistic specifics. For example:

What are the career stages at your firm and what are the standard years to reach each stage? How do you determine whether an attorney advances to each stage?
What training programs do you provide the attorneys in order to assist them in proceeding from stage to stage?

But, once you answer the above questions, your job is not done. You still need to sell the candidates on the specifics. For example:

On what exact date do will they get their annual feedback regarding stage advancement? If they are not advanced, what information and support with they receive to help them advance next time?

For each of the stages, what are the names of the training programs and what is the schedule?

The End?

Although Big Law can’t beat the Big Four firms in terms of size and experience for back office support, they can still beat them for top level talent by adopting the Big Four’s best hiring practices as well as selling candidates on their firm’s track record in producing top level attorneys. For firms that don’t follow this approach, they won’t just be losing the war on talent, but they can also look forward to an uphill marketing battle in overcoming the damaging effects to their firm brands.

If you are looking for help with making your L&D programs competitive with the Big Four, check out our Firm Programs.

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Talent Battle: Big Four vs. Big Law