Employing Graduate Solicitors

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By Dr Neil Oakes | Oct 27, 2016

educationQuestion: What are most of the graduating class of 2015–16 doing now?

Answer: The same part-time jobs that they had as students (i.e., Baristas not Barristers)

Suggestion: ‘Give a kid a shot at the title’

Australian Big Law loves graduate recruitment. In 2016 the intake of graduates among the largest 50 firms is up 14% of the 2015 intake (according to the Australian Newspaper’s partnership survey). That said, there are now more than 40 law schools in Australia, so the 550-odd graduates employed by Big Law must be a drop in the bucket.

Many of the small firms (one to ten partners) that I encounter are relatively busy, and aware of all of the ‘management 101’, ‘leverage is good’ principles of profitable practice, but are continually searching for an employee solicitor with ‘about five years experience’. Why? They’re hard to find, relatively expensive and usually highly portable.

I would encourage all firms to consider a graduate-recruitment programme. I know that attrition rates are high among Year 1 and Year 2 solicitors. I know that graduates require supervision, coaching and support. I know that some graduates can be a little bit precious and I know that Gen Y are, well … challenging. But I also know (a lot) about profit margins in law firms.

It is not unusual for a graduate solicitor to return $2.50 for every salary dollar paid in their first year. An associate will usually return $2.50 and a non-equity partner $1.70-ish. In years 2 to 5, it is not unusual for returns on salary dollar paid to approach $4.00. These numbers, of course, assume appropriate delegation, supervision, support and leadership. These numbers increase under fixed fees or scale fees.

Graduates are relatively easy to get and you can go direct to the factory: you don’t have to deal with a broker (and their placement fee). In the absence of internal HR professionals, one would be well advised to build selection skills among those charged with the responsibility for recruitment, but these are learned skills that one can develop internally at relatively low cost. So getting graduates is not hard. Keeping them is a bigger challenge. Here are some tips:

  1. Look closely at profit margin

The ideal of cradle-to-grave employment where a graduate joins your firm, works hard, stays and one day buys a partnership, and eventually retires (gracefully) probably won’t happen. Of course people will leave. Young lawyers want variety in their careers, why wouldn’t they? Managing attrition requires a targeted approach. Aim to retain them for four or five years by implementing the strategies below. If they stay beyond four or five years, great (subject to acceptable performance). But if they don’t, it’s no big deal, so long as others are coming through to take their place. If your firm is average, attrition will be about 14% (14% of employees will leave annually); 10% is closer to ideal.

  1. Find round pegs for round holes

We all have a hard-wired skill set. Some people thrive in an organised, process-focused environment, some people thrive in a client-service-focussed environment, some people thrive in a creative environment and others thrive in learning or intellectually challenging environments. Determine what the role involves, and recruit someone with the appropriate behavioural skill set. Test shortlisted candidates to ensure that they fit. Don’t put a highly intelligent, creative kid into a job that requires attention to detail, tenacity and repetition. They will hate every minute of it and leave.

  1. Paint a clear picture of the first five years

You are significantly more likely to retain graduates if you can create a picture of their first four or five years with your firm. What will they be doing in Year 1? What will they learn? What will they be doing in Year 2? Show them your graduate-development plan that includes professional and personal skills. At the end of Year 2, send them on a three-month holiday overseas (with appropriate pocket money), and explain what their job will look like on their return for the following two years. If you build the vision then, there is a pretty good chance that they will structure their life around it. If you do none of the above they will build their own vision and typically it will be short-term and opportunistic. By the way, I have seen this exact model working well in several regional firms (including the long holiday at the end of Year 2).

  1. Pay well

This is pretty obvious. Pay people well and money ceases to be an issue, pay them poorly and it will fester into discontent. Aim to pay competitive market salaries and enforce minimum acceptable performance standards. If employed solicitors can’t perform at acceptable levels, replace them with people who can.

  1. Build a relationship with graduate solicitors

Get to know your talent. People will want to work for you if they like you and if you like them. It’s not hard. Take an interest in their lives (without interfering), help them save and structure a wealth-creation plan, learn a bit about their out-of-work interests, encourage them, etc. In short, care about them.

  1. Leave the budget out of it

I wouldn’t bother a graduate lawyer with a budget. Explain what minimum acceptable contribution looks like AND that nobody ever progressed in their career by achieving minimum acceptable contribution. Acknowledge good contribution with pay rises, minimum contribution with no pay rises, and below-minimum contribution with termination.

Don’t expect graduate lawyers to develop their own practices. They won’t. (Neither, for that matter, will most employed lawyers.) You will have to delegate sufficient work to enable them to be productive. Getting work is the responsibility of partners. In my experience the more work you delegate the more they will do.

Meet with graduates every morning (initially) to compile their daily to-do list, and recognise performance and achievement in these discussions. When you are confident that they can cope, lengthen the lead and meet weekly. Maintain weekly meetings and weekly to-do lists for the first four years of their career.

  1. Do unto others

We’ve seen significant development in HR strategies in law firms in the last 20 years. Engagement has replaced fear as the primary motivator of young lawyers; flexibility is now a corporate virtue and employer of choice the new mantra. Talent management has become an industry!

This is all well and good but managing and leading employed lawyers is, in a pragmatic sense, no more complicated than ‘do unto others’; treat people the way you like to be treated and you’re pretty much there. Note I said ‘Treat people the way you like to be treated’, NOT ‘Treat people the same way that you were treated’; there is a subtle but important difference.

Have a look at your employee structure and see if you have room for a couple of graduate solicitors. I suggest putting one or two on annually. Some will stick and some won’t but if you do the above well, the majority will stay for the high-profit-margin employee years (2 to 5). The financial risk is low, so give it a shot.