In-house legal department leaders are navigating an exceedingly difficult hiring environment these days. Hourly rates charged by external counsel are poised to rise, strengthening the business case for adding in-house roles. But in a highly competitive market, in-house searches are taking much longer than they have in previous years. As companies search for the right candidate, they face limited options in managing increased workloads: send out more work to expensive external counsel or allow a backlog to accumulate on the future hire’s desk.
As a growing number of legal departments are realizing, there is an attractive, viable alternative: interim counsel placements. Interim talent can be a cost-effective solution to managing a backlog of work and stretched internal teams, and can buy in-house law departments more time to find the perfect long-term hire while preserving their existing resources.
Strong demand for in-house hires means longer search times
If you lead an in-house legal department, you have likely drawn one daunting conclusion from the cascade of news about compensation increases for law firm associates: law firm billing rates are headed even higher. With increased external counsel costs on the horizon, adding in-house roles will make sense for many companies. This is not always an easy task, as headcount approvals (particularly for law departments) can be incredibly hard to obtain. Moreover, in this exceptionally hot market, recruiting top-tier talent into an in-house law department requires deliberate, measured screening processes that are more structured and focused than ever before. That takes time, subject matter expertise, bandwidth, and patience. Meanwhile, the work is aggregating, which causes in-house teams to be stressed out and stretched thin. The goal is to grow your team, but to do that, you must retain (and preserve) the talent that you already have.
One obstacle confronting in-house departments is the rise in law firm associate compensation. In-house salaries generally lagged behind Biglaw base salaries before 2021, but the difference has widened this year, dissuading some interest in in-house roles. Strong candidates who interview for in-house positions are routinely receiving multiple offers, causing many companies to miss out on their first-choice hire. The result is substantially longer search times. Prior to the pandemic, a typical in-house placement took six to eight weeks to complete. In some instances, that timeframe has lengthened to three to six months, and sometimes longer.
Interim counsel placements can help
Many companies have found that interim counsel placements offer an attractive solution to the problem of extended searches. As we discussed in detail last month, interim counsel placements offer several advantages. First, they enable a company to hire talented counsel for variable engagements at lower rates than those charged by external counsel. Second, compared to the option of a secondment from a law firm, interim counsel placements enable the company to hire from a deeper and more customized talent pool. And third, the interim model gives the company total flexibility to scale resources up or down on short notice.
In the context of in-house searches with an uncertain end date, the flexibility of an interim counsel placement is particularly valuable. Before the pandemic, the typical interim counsel placement lasted six to eight weeks. Now, six months is standard, and longer than six months is not uncommon. But in the event an in-house legal department decides to bring on interim talent and then resolves the permanent search unexpectedly quickly, there is no problem cutting the interim assignment short.
Let’s take the example of an in-house legal department seeking to hire a permanent Labor & Employment attorney with top credentials and more than 10 years of relevant experience. In the current market, that search may take several months, during which the company simply cannot afford to have the position sit vacant. In this case, Cadence Counsel will discuss with the company the options for an interim solution. Our search consultants will recruit interim counsel with the requisite pedigree and experience, and the law department will have temporary in-house coverage at an hourly rate that is notably lower than engaging outside counsel. In some cases, the department will find the interim attorney so impressive that it will extend a permanent offer to that person. (There is of course no guarantee that the interim attorney will accept! Many attorneys who take on interim assignments prefer to work on a short-term basis.) Either way, the interim arrangement will be a cost-effective way to prevent a substantial build-up of in-house L&E work.
* * *
If you would like to explore the suitability of interim counsel placements for your organization, either in the context of a permanent search or to address a short-term need, we welcome you to contact us.