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Hiring Freeze? Alternative Legal Service Providers to the Rescue
by: Katelyn Braun, Andrew Teig of Major Lindsey & Africa  -  Major Lindsey & Africa Articles
Wednesday, March 29, 2023

Organizations in a wide range of industries are tightening their purse strings. Rising interest rates paired with the over-hiring that occurred the past two years has caused many to take a pause and reevaluate their next steps. Among corporate legal teams of all sizes, hiring managers are implementing hiring freezes, and legal operations professionals are looking into how to reduce outside counsel spend—a classic refrain that everyone has come to expect.

Unfortunately, as a result, some organizations and law firms are having to make the hard decisions to lay off good legal talent. While these lawyers are hopeful to find new permanent roles, hiring freezes are keeping those roles just out of reach, leaving high-quality, experienced lawyers in the market for opportunities.

Hiring on a Budget

The challenge that always comes with a tightened budget is how to get the work done—just because the money is not there does not mean the workload went away.  So, what is a legal team supposed to do?

At this point in the new year, corporate budgets have already been approved—including how much outside counsel spend is available. While the logical default to getting work done is to lean more heavily on law firm support, legal teams should consider using alternative legal service providers.

Alternative legal service providers often have a significantly lower price point than a law firm’s hourly rate. (Think up to 50% less per hour.) Consulting attorneys can come in and work as members of the legal department, addressing a range of matters based on the team’s needs. These lawyers handle all aspects of legal work, including research and review, and can also be hired on a part-time or project basis depending on the volume of the workload. Interim talent is also hireable under the outside counsel budget rather than the budget used for permanent headcount. Between the lower price point and quality of talent available, using outside counsel spend offers a viable solution for teams in need of extra hands within a tight budget. 

Available Talent

In years past, the most common use of a temporary attorney was for “document review”. This work would be very surface level, simply reviewing the terms of a contract and extracting data. Those days are gone. Today, contract attorneys advise business units, interface with clients directly and sit in very visible leadership roles. Corporations have seen the value that hiring a consulting attorney brings to their team, whether it be for parental leave coverage, an downsize in a company, or when an attorney leaves a full-time position and there is an urgent vacancy. This trend has been a natural progression of the legal market over the past 10+ years.

Now as talent enters the market due to layoffs, companies selling/merging, and overall downsizing, legal teams have an opportunity to work with never-before available talent. 

A few years ago, lawyers were holding on to their roles with everything they had. Even six months ago, the candidate pipeline was pretty dry. However, now, we’re seeing a huge shift in available talent due to the changing market mentioned above. These candidates are mid- to senior-level people (i.e., former associate general counsel and general counsel) who have a lot of experience to offer.

Many of these candidates are feeling the effects of the permanent market freezing up, and they are unsettled with the idea of waiting six months or longer to see if things change. In the interim, they seem very eager to take on a substantive role that would allow them to learn a new industry, stay sharp on their skills and avoid gaps in their resumes. In turn, legal teams can bring in these talented attorneys on a short-term or project-based assignment and benefit from their expertise.

For example, we have seen numerous legal teams looking for commercial contract attorneys to take on short-term roles. With a focus on technology, finance, M&A, start-ups, pharmaceutical and more, the work often includes heavy drafting, negotiating and other client-facing interactions where the consulting lawyer is expected to work autonomously and independently. This need lends itself to the caliber of candidates coming into the interim/contract marketplace for the first time who have done just that for 20+ years in their permanent roles and need very little assistance to take on such assignments.

Consulting attorneys are able to take on the same work a law firm/permanent employee would. The vast differences come with caliber of candidate, the services provided by a recruiting firm and the cost the organization incurs. Candidates are not only able to work independently and autonomously, but they tend to need very little training because they have done this work in a previous, permanent role. Also, an interim resource can usually be interviewed, onboarded and start all within a 48–72-hour period because they are available to move from one interim assignment to the next with ease. For the company, hiring a consulting attorney allows for the legal placement firm to “employ” the attorney and cover all payroll, onboarding, health benefits, PTO, etc. This keeps the candidate “off the books” for the company and allows for the recruiting firm to serve as the main point of contact for all questions coming from the consulting lawyer. The option to retain outside counsel can be very costly. Hiring an interim lawyer can often save a legal team over 50% on an hourly rate when compared to a law firm secondee.

The moral of the story? By leaning on your outside counsel budget, you can access this rarely available talent while it lasts. These interim lawyers can become dedicated resources to their clients’ legal teams, being readily available at any time the work comes in and offering valuable expertise. It’s a win-win: The organization in need of legal support benefits from being able to quickly bring in top talent, and the lawyers looking for new opportunities have a valuable chance to explore new horizons.

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