Legal Jobs Spotlight: Top Hiring and Compensation Trends for 2017

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Transcript

Robert Half legal Report

Legal Jobs Spotlight: Top Hiring and Compensation Trends for 2017

12/01/2016

Intro: Welcome to the Robert Half Legal Report, where we discuss current issues impacting the legal profession related to hiring, staff management and more, with leading experts in the field. Robert Half Legal provides lawyers, paralegals and support staff to law firms and corporate legal departments on a project and full-time basis. The Robert Half Legal Report is here, on the Legal Talk Network.

[Music]

Charles Volkert: Hello everyone and welcome. I am Charles Volkert, Senior District President of Robert Half Legal and the host of our program. Our guest today is Billie Watkins, District President at Robert Half Legal, where she provides skilled and practical guidance to legal clients and candidates. She is also an attorney with more than 10 years of experience practicing law.

Billie and I will be exploring the legal hiring and compensation trends expected to shape the law profession in the coming year. It’s wonderful to have you with us today Billie, and for our audience, could you share a little bit more about your background and expertise.

Billie Watkins: Thanks Chad. Very pleased to be here. And yes, 10 years of legal experience, I formerly worked with the Attorney General’s office, also was involved in regulatory and compliance matters, and legislative relations, and after that joined the wonderful world of staffing, where I was not only a salesperson and producer and recruiter, but also led some of our legal teams throughout the country. And now oversee a geography and very excited to be able to talk about the good news related to what we are seeing in hiring over the next year.

Charles Volkert: That’s great Billie. Thank you again for joining us today. So why don’t we dive into it, let’s start with expectations for legal hiring in the 2017 environment. The outlook for legal hiring in the coming year appears to be very encouraging. Law firms are certainly expanding to capitalize on emerging business opportunities and corporate legal departments are adding staff to meet growing demand for legal services.

What trends Billie are likely to have the greatest impact on legal hiring in the coming year?

Billie Watkins: Thank you Chad. Great question. I think the good news is for job seekers, we see a steady increase in hiring legal professionals throughout the next year. Kind of the challenge I think you may see for employers is that the market is shifting, it’s very much candidate driven, and while there’s a lot of demand for high-level talent across the industry, the supply is pretty tight.

And so some of the trends we are seeing is more significant demand for that specialized talent in high growth practice areas.

We are also seeing that lateral hiring remains strong. We conducted a survey, where one out of four lawyers indicated that they plan to increase hiring in this area over the next two years.

And so what’s happening is as a result employers are needing to kind of put on their creative hat to make sure that they are not only attracting the top talent, but also covering a workflow when responding to the client. So as a result we are seeing flexibility and staffing models using lawyers, paralegals, and specialists on a contract project and even consulting basis.

And I did want to add another trend we are seeing is kind of that first-year associate hiring rebounding. Chad, you may know, right, a few years ago we saw a bit of a lull, but it appears that that is coming back pretty strong with large law firms expanding their summer associate programs and boosting on-campus recruiting.

Charles Volkert: That’s great intel Billie. And as you think about what positions will be in the spotlight next year, you began to touch on some of those positions. Could you dive a little bit deeper into that, as well as share busy practice areas, where we are going to see the largest job opportunities, and some of the skills and expertise needed?

Billie Watkins: Sure. So starting with practice areas, I think kind of the usual suspect in terms of demand is always litigation, and I think that will remain strong.

We also expect to see job opportunities in the business and commercial law segment.

And then another, which we hadn’t spoken much about kind of in previous years, but we expect to see and have seen demand in and potential opportunities in, would be family law.

(00:04:50)

And in terms of skills, I think that any professional with expertise in these areas and strong legal background, who is adaptable and team-oriented, would be kind of an ideal candidate that might be sought after by employers.

And in terms of positions, and this was strong last year, strong again this year, the hybrid legal assistant role. We continue to see demand and growth for that role.

I think what’s happening is law firms and corporate law departments are looking for candidates with multiple skills, who can add immediate value. So those with some substantive knowledge, who can work on fairly complex matters, but can also handle some administrative task. And so in certain segments that position is called a legal assistant, but we call it a hybrid role, because it can come with many titles.

Charles Volkert: So very good information Billie on that hybrid role and some of the other things you are seeing with these positions. You began touching on practice areas, could you share with the audience why certain legal specialties and practice areas are driving growth while others may not be.

Billie Watkins: Yeah. And I think that’s also a great question. It’s something we actually talk about all the time in our business day to day. I get questions all the time as to why is there more demand for litigation or contracts or compliance, and I think kind of the simple response is supply and demand. It’s a response to the market as businesses are moving their business in certain areas, law firms are responding because these are their clients.

For example, we are seeing that firms are hiring in medical malpractice, in intellectual property, in insurance defense. Why is that, because they are ramping up their service offerings in these areas in response to either new clients or more demand from existing clients.

Another example would be the increase we see in product development and corporate mergers. This activity in the market is driving demand for legal professionals with specialized intellectual property experience and mergers and acquisitions experience.

And we all know there’s complexity in terms of responding to regulatory requirements and revisions and new regulatory requirements that corporations need to meet. Well, as a result of that we are obviously seeing hiring increases in legal compliance expert.

So all of that is kind of the natural consequence of why you see demand in certain areas, it’s really market-driven, but the simple answer is supply and demand.

Charles Volkert: I would also add that I continue to hear about the hiring trends being strong within small boutique firms, many of which are in the areas that you mentioned, like intellectual property, litigation, firms handling compliance and regulatory work, is that something you are also seeing with this growing demand with the boutique firms as they hire?

Billie Watkins: Absolutely. And I also think some of those firms are becoming more and more competitive, because it goes back to what I mentioned at the beginning in terms of attracting top talent, putting on that creative hat, where, well, they may be able to offer some models in terms of billing and arrangements with the corporate clients that may be pretty competitive, and so obviously pretty bullish in terms of the way they are going about their business, but allows them an opportunity to be competitive and grab it as well.

Charles Volkert: Well, that’s a great discussion. And now it’s time for a quick break.

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Charles Volkert: Welcome back to the Robert Half legal Report. I am Chad Volkert and joining me today is Billie Watkins, District President for Robert Half Legal. Before the break we were discussing legal hiring trends and employment opportunities expected to be in the spotlight in the coming year and the specialized legal knowledge being sought. Now more than ever competitive compensation is a key factor in a law firm or legal department’s ability to attract and retain the legal talent it requires.

So Billie, what salary trends can we expect in 2017?

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Billie Watkins: Thanks Chad. This is a favorite topic for our job seekers and employers so we want to run through this. A good amount of data, so bear with me please, but in our 2017 survey we found some interesting news, and what’s good for job seekers obviously is that we do anticipate a 3.6 overall increase in average salaries over the next year in the legal field.

But I will start with lawyers. Average salaries for lawyers at law firms are projected to increase by 4.6%, and if you drill down a little deeper, and this goes to some of the points and questions on small and midsized firms, you see something pretty significant. Lawyers with four to nine years of experience at small to midsized law firms should see starting salaries increase at 6.9%, and then in-house lawyers, we see overall compensation increases at 3.8%, but corporate counsel with four to nine years of experience at midsized companies can expect annual starting salaries to increase by 5%.

So I thought that was pretty interesting and goes to the points we are making about midsized firms, what are they doing to attract talent as well.

Charles Volkert: Certainly, and very interesting percentages, up over 6% in some categories for lawyers. What about paralegals, Billie?

Billie Watkins: So overall we project average gains in starting salaries for law firm paralegals at 3.5%. And so kind of drilling down a little more there, paralegals with four to six years experience at small to midsized firms should see more significant gains at 5.2% of their annual starting salary.

And I thought that was interesting, also kind of goes to the point about attracting top talent and how small and midsized firms are responding to some of the increases we see at larger firms.

Charles Volkert: Yeah, that’s very interesting Billie. How do legal secretary salary increases differ from paralegals?

Billie Watkins: Yeah, and they do. I think the trend though in terms of overall average and small, midsized strategy in hiring is similar. So overall legal secretaries at law firms can expect an average salary increase at 2.3%, but again, the greatest gains in starting salaries are expected for legal secretaries with three to six years of experience at small to midsized firms.

Charles Volkert: And firm administrators and additional legal support positions outside of the paralegal and the legal secretary rank, so what are you seeing there?

Billie Watkins: These align a little bit more with the paralegal statistics. We found that law firm administrators, office managers at midsized law firms should see average salary increases at 3.7% over last year and senior supervising paralegals with 7+ years of experience at midsized companies should see 4% increases over last year.

And then last, but certainly not least, legal secretaries with three to six years of experience at midsized companies, I didn’t reference those earlier, we were just talking about law firms, should see 3.7% increase from last year.

Charles Volkert: Well, a tremendous amount of detail, and I know there is even more as you look through the 2017 Robert Half Legal Salary Guide. So maybe we could transition into how are the salary increases for first year associates that were announced by many larger law firms last summer influencing compensation at other firms and are general counsels now feeling the pressure to adjust salaries for their in-house teams?

Billie Watkins: So some feedback on that. I mean, I think that’s an interesting question, and obviously we are always getting inquiries about what’s competitive in the market. And so we all heard about the $180,000 mark in terms of the Am Law 100 Law Firm Salaries. But I think the responses for in-house general counsels who are looking to hire and small, midsized firms varies.

I think for a number of reasons when you look at small and midsized firms they likely will not be able to match the large law firm salary grid, but that’s fine, because their service offering is a little different, and I am not sure that they want to. They would like to be able to aggressively go after business opportunity, providing different fee models and arrangements to their clients, and lower bill rates, and so that means that their salary structure may be a little different.

But again, it goes back to what are employees doing to put on their creative hat to attract the very best talent for their business, and I think it’s not always monetary. And so those responses to those increases likely will be about compensation and other benefits they can offer.

(00:15:06)

In terms of in-house counsel and their responses, we aren’t seeing a ton of pressure. I think there is some natural interest in in-house opportunities in the legal profession for a number of reasons, but we are getting inquiries and we are having conversations about what’s competitive in the market.

And so I do think general counsels are looking at, how do I retain my talent and how do I continue to attract top talent, and it goes to, again, putting on that creative hat, understanding what the market is dictating so that not only the monetary benefits matter, but others.

And so not that there won’t be salary increases, we just mentioned those, but whether everyone will follow the 180K mark and up, I think depends and varies based on the business.

Charles Volkert: Well, that’s excellent feedback, Billie. And maybe shifting gears a little bit away from the attorney positions, whether that’s in a law firm or in-house; our research continues to indicate that legal specialists will see the largest compensation increases in 2017. Could you share why those positions are showing more significant salary gains than other jobs within the legal industry?

Billie Watkins: Yes Chad. This one is really interesting, because these are some pretty significant numbers. But again, simple answer, supply and demand. We are seeing pretty significant demand in this space and it is very tight in terms of the talent.

And so if you think about it, across the board the average increase we expect is 5.1%. So if you think about that compared to the numbers before, all good for job seekers, but pretty significantly higher.

I will give you some examples, eDiscovery directors with 10+ years of experience can expect an average increase of 8.9%. So that’s pretty significant. But I can tell you based on experience, it’s pretty challenging to find talent in that space based on the demand we see, and so that’s likely why you are seeing these numbers that match that. It’s just the response to the market and the business demand.

Another example, compliance managers, and I mentioned this in demand practice area based on some business trends earlier, with seven to nine years of experience can expect average increases at 6.9% annually. So again, pretty significant for the reasons I mentioned before.

Another, contracts managers, I alluded to this earlier also, but they can expect average starting salaries to rise by 5.4%, and so when we talk about merger and acquisitions activities, direct correlation to the demand in that area.

Last, but certainly not least, another example I would like to mention, because we see a lot of activity here, lease managers, and I tell my teams all the time, look at the cranes. When you are walking down the street, there is a ton of activity. Look at businesses expanding operations in multiple markets. So we expect demand in that area and that increase to be 5.1% on average.

Charles Volkert: Very interesting. And a lot of talk about the salaries, Billie, which are obviously important, but what additional strategies are law firms or corporate legal departments using to effectively recruit and retain high performing lawyers as well as other professionals?

Billie Watkins: Great question. So I will start with lateral hiring at law firms. So I mentioned, a few years ago we saw a lull, but that looks to be back on the rebound, and I think we are seeing some activity, pretty significant activity there, because if you think about laterals, they come with experience and that experience can add immediate value day one. And so we continue to see demand in that area.

And I think as we have talked to lawyers, more than half indicated that this is an effective strategy for improving their revenue, and so I don’t expect that to slow down.

Another thing, and I mentioned some of this earlier, is putting on the creative hat in terms of attracting top talent and retaining staff, and it’s not always about the monetary benefit or how much money you make. And so we are seeing more and more that employers are looking at, what do we do to engage our employees to make sure that they feel that they have a good place to call a career home.

Some of those things, I will give you some examples, would be offering them meaningful work, and when you mention meaningful work, work that makes them feel like they are making a contribution, that it matters in the workplace, creates job satisfaction.

(00:20:00)

The other thing is, and we all hear this all the time, work-life balance; that means something different for whoever you might ask, but it is more and more important that that’s addressed in the workplace. And so a lot more we see people engaging us to talk about what that means, but making sure that they are talking to employees about, in some cases flexible arrangements or pro bono work outside of the office that allows them to give back to the community. It helps them to feel good about the investment the employer makes in them and themselves and their career.

The other is professional development and learning opportunities. And I think by emphasizing this and giving them continued education, it can demonstrate that you truly are invested in them and their career.

And then the last thing I would mention, but certainly not least, is the engagement. And the more I speak with employers, most organizations get involved in engagement surveys, and that’s really all about how are you connecting at the highest and lowest levels with every employee. And we have found that those employees who get regular feedback and recognition feel like they are engaged in a positive way more and those people stay on the job.

So I think all of that is just as important as compensation and altogether employers likely can retain top talent and attract top talent.

Charles Volkert: Well, Billie, that’s a great list of strategies for our listeners, and I certainly agree that many of those rank nearly as high as salary and certainly a wide array of legal professionals are looking for additional benefits to be retained or attracted to a firm or in-house position. So a great discussion overall and it looks like we have reached the end of our program.

Special thanks to Billie Watkins for joining us today, and before we close, I would like to let the audience know how they can contact you and where they can obtain more information about legal hiring and compensation trends.

Billie Watkins: Thank You Chad. I can be contacted via email. My email address is  HYPERLINK “mailto:[email protected]” [email protected]. We will be happy to share more information and dig a little deeper into those data points I mentioned related to salary; I wasn’t able to share all.

Charles Volkert: Well, great Billie, I am sure a number of our listeners will reach out to you for additional discussion.

Our listeners can reach me at  HYPERLINK “mailto:[email protected]” [email protected]. And you can visit the Robert Half Legal website for additional career resources, including our latest Salary Guide for the Legal Profession at  HYPERLINK “http://www.roberthalflegal.com” roberthalflegal.com.

Thanks again Billie for a great discussion, as well a big thanks to our audience for listening today. Join us next time on the Robert Half Legal report, as we discuss important trends impacting the legal field and legal careers.

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