October 17, 2024 • 35 mins
In this episode of Steve's Rules, podcast partners Murray Coffey founder and principal of M Coffey and executive recruiter Steve Nelson from The McCormick Group discuss some of Steve's market updates and then go deep on best practices in legal recruiting agreements.. This episode should be of special interest to those on the law firm side responsible for engaging executive recruiters for lateral placements.
Key Topics:
- Increased Government Hiring by Law Firms
Steve highlights the recent surge in law firms hiring from key government agencies, including the DOJ, SEC, and FTC. This trend reflects law firms’ increasing need for regulatory expertise, especially amid policy shifts and anticipated changes from upcoming elections. Steve explains how this affects the demand for experienced attorneys from federal agencies. - Employee Benefits Partner Hiring Report
Steve shares insights from McCormick Group’s new report on ERISA and employee benefits partner hiring. As mergers and acquisitions increase, firms are turning to highly specialized attorneys in this technical area to support complex deal structures. Steve discusses why these roles, though not profit centers, are crucial client retention tools.. - The "Poison Pill" Clauses in Law Firm Recruiting Agreements
Steve discusses three key “poison pill” provisions in partner recruiting agreements that can make firms less attractive to recruiters and dissuade them from bringing top talent forward:- Fee Caps for Large Groups: Some firms impose strict fee caps on large group hires, which can be problematic if they aren’t consistent with the market for securing these high-value placements.
- Guarantee Periods and Conflicts: Onerous refund requirements, particularly when partners are forced to leave due to unanticipated conflicts, put undue burden on recruiters making placements less appealing.
- Non-Recruit Clauses: Blanket restrictions on recruiting, particularly not tied to placements, can limit long-term partnerships with recruiting firms.
Steve emphasizes that balanced, reasonable agreements foster stronger recruiter-firm relationships and ensure access to the best talent.
Bonus Content: Here is a link Steve referenced to the documentary film about his friend and fellow Key West, Florida stand-up comedian Tom Dustin: Portrait of a Comedian
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Murray (00:00):
Murray Coffey, welcome to Steve's rules
(00:07):
periodic podcast featuring SteveNelson, executive principal at
McCormick group in the law andgovernment affairs practice. My
name is Murray Coffey, and I amthe principal of M Coffey, a law
firm, marketing and businessdevelopment Boutique. For more
information, please visit mywebsite@mcoffee.net
Steve has been an executiverecruiter for nearly three
(00:28):
decades, and without namingnames, he is ready to spill the
tea on best practices, and maybea few not so best practices by
firms and candidates that he hasseen during his career,
recruiting some of the mostdriven and successful
professionals into highlyprofitable and growing firms.
Steve is a former lawyer andjournalist and is a fellow of
the college of law practicemanagement and a proud son of
(00:50):
Wilkes Barre, Pennsylvania. Fulltransparency here, Steve has
helped my career immenselythrough the years and has become
something of a career shaman tome and I know many others. Hey,
Steve,
Steve Nelson (01:05):
how are you? Okay?
Murray Coffey, doing I
Murray (01:08):
am doing great. It is actually starting to cool off
here in Dallas. We actually gotbelow 90.
Steve Nelson (01:20):
Hey, listen, I'm excited, particularly I just
went to New York, and my comedymentor, Tom Dustin, who runs the
Key West Comedy Club, is thesubject of a new documentary
called Tom Dustin portrait ofcomedians. So I was there for
the premiere of New York. So itwas really great. It was great
(01:41):
to see him, but it was alsogreat, a great movie. If it ever
comes to your city, I recommend,
Murray (01:47):
oh, is it? It's not on one of the streaming services
right now,
Steve Nelson (01:50):
not yet, not yet, but I think it will get there.
Okay,
Murray (01:53):
okay, well, I'll keep an eye out for it. I enjoy, I enjoy
a good documentary, for sure,especially one where there might
be some yucks. There aredefinitely that. There are
definitely that, right? Well, aswe often do, we will start off
this episode of Steve's rulesgetting kind of what's going on
(02:15):
out there, Intel that Steve andhis colleagues at McCormick
group are hearing. They'vealways got their ears to the
ground. And also, I thinkthey've got a new report that
Steve's going to talk to usabout. So, Steve, what are you
hearing out there? Right?
Steve Nelson (02:30):
Well, I think the biggest thing going on in the DC
area right now is that we'reseeing a spike in government
hiring, hiring from thegovernment by major law firms.
It's uh, we've already counted13 in the month of September,
which is the highest this year,and was well above what was last
year. Now, earlier this year,the government hiring was
(02:52):
lagging behind last year's pace.
I remember, which is normal,because an election year
generally is a slower year,because a lot of the people who
are, you know, high, high up ingovernment, have pledged to to
stay to the end of the term. Butin September, we started seeing
them, and they've continued intoOctober. So we're thinking that
there's been a change in in thethe loyalty, let's say, of the
(03:18):
of the of government workergovernment attorneys right now,
with regard to staying until theend of the administration, and I
may have something to do withthe fact that, you know,
there's, there was a change inthe the election, with Biden
dropping out, Harris coming in.
So that may have been a factor.
Now I will say this, threeagencies are the key agencies
(03:41):
that are that are being hiredfrom it. So I think that really
will tell you a lot, DOJ, SECand the FTC, and so those are
all areas of importantimportance to business and where
really, no matter what happenswith the the election, there's
(04:03):
going to be a lot of issues thatare going to be raised right
next year and the year after,with regard to policies at the
SEC, everything they're doingwith regard to crypto. I mean,
that's a huge deal. Everybody'snot sure where that's going.
Obviously the FTC and the wholeissue of, you know, price
gouging, and Paris is talkingabout that, that may turn out to
(04:25):
be something that will be a newpolicy. Antitrust has been
strong, has been a strong areaof interest throughout, frankly,
this entire administration. Sowe're seeing a continuation of
that. Don't want to, don't wantto mislead anybody to say that,
well, it's across the board, andthat, you know that people from
the Federal CommunicationsCommission are going to be in
(04:47):
tremendous demand. We're notseeing that, but we're seeing it
that is going on.
Murray (04:55):
Yeah, and those are all agencies that have levels of
enforcement can. Abilities thatthat are are critical to to law
firms in terms of representingtheir clients. So that is
fascinating. And I, you know,who knows how this election is
going to turn out. It still is,is, you know, neck and neck,
which, frankly, I find hard tobelieve at this point, but there
(05:17):
were that that's where we are.
Steve Nelson (05:20):
So and you were telling me earlier, we were
discussing this earlier, that ainteresting wrinkle is the fact
that you've got Kamala Harris, aformer prosecutor, that's right,
is, is, is, is the Democraticcandidate, and if she were to
become president, you would, youwould think that there's going
(05:42):
to be heightened enforcement,you know, more aggressive
posture. And of course, that'sgoing to be of, oh, yeah,
interest or even scariness tobusiness. Yeah.
Murray (05:55):
Look, she's, she was, when she was attorney general.
She was an activist, AttorneyGeneral, and and she had a
reputation for using the powersof law enforcement to try to try
to stimulate some some societalchange. Whether, whether, you
know that was, whether that wassuccessful or not, I think is an
(06:19):
open question, but it's aninteresting, you know, she that
poses an interesting issue forlaw firms. If you have a
prosecutor who is, who is headof the United States, you know,
government and will inevitablyappoint whoever is going to be
the head of the DOJ is going tobe somebody that Kamala Harris
(06:41):
is, is, is sort of in sync withso could be, could be very
interesting time, that's forsure. It'll be interesting
either way. I guess you know so.
And you guys have got somethingnew, some new reporting that
you're doing too, right?
Steve Nelson (06:56):
Yeah, no, we, just last month, we issued our first
report on employee benefits.
Partner hiring for us ynational, we have been
developing a strong practice inthis area, terms of ERISA
lawyers, again, mostly partnersin council. And you know,
(07:18):
because of that, we've, youknow, we've really been tracking
a lot of the moves, and so wedecided to to give that, to
provide that information on anational basis. You know, that's
an area right now. It's, it'salways been, it's super
technical, yep, and it's andit's something where, you know,
(07:41):
firms need the expertise. It'snot a money maker for the most
part, but it is. It's a clientholder, you know. So the clients
do a merger, they need thatexpertise, and they're going to
get the best person to providethat expert, that's right. And
so therefore these, theselawyers, are very much in
(08:03):
demand. And therefore this isreally interesting information
for for firms to know. What youknow, where are the people
going? Are they? Yeah, are theygoing to boutiques? Are they
going to big firms, etcetera. Sostay tuned. If you, if you're
not subscribing, you know, youknow, you'll get the notes below
about how to reach us, and, youknow, we'll get you on the list.
(08:24):
So very excited about thatproject. Yeah,
Murray (08:28):
that's, that's great.
And you know, with, you know,we're seeing, we're seeing
interest rates come down, sothat's going to stimulate the
deal world. And you're right. Sothis could, we could see a whole
bunch of mergers, acquisitions,you know, spin offs, and that's
going to drive a lot of, a lotof need in this, in this area,
(08:50):
and it is highly technical and,and, and Full of landmines. So,
so it's, it's great and verycool that you guys are tracking
that so, so carefully. And
Steve Nelson (09:07):
I want to give a shout out to rob Virgo, who was
my colleague, yes, practice. Soif you're an Arista lawyer, and
you're want to, you know, wantto get an idea what your job
options are, give Rob a call.
Murray (09:20):
Yeah, give Rob a call.
He's a great guy too. We, we'vehad him on the podcast in the
past. He's just, just great. Solet's focus in on what kind of
the the primary subject hereSteve, and that this is what I
would this is what I would call,you know, the fine print of the
of the recruiting world. And Ithink you called it when we were
(09:42):
talking about the subject. Youcall it the poison pill, and,
and I found that intriguing and,and as we talked about it, it
became even more intriguing so,so, and this is probably, you
know, the this is, this isgetting to that inside baseball
point where. Where you know thepeople who care about it are
really going to care about it,and probably other recruiters.
(10:03):
And as we often know, Steve, thetraffic that goes to this, this
particular podcast seems tointerestingly come from lots of
your competitors. So right,
Steve Nelson (10:16):
yeah, and it may come from the competitors. It's
this is definitely a topic ofinterest to law firm management,
in particular, terms of this isimportant, and really what, what
we're talking about is thevarious law firms recruiting
agreements with outsiderecruiters. And virtually every
am law 100 200 firm has them astheir own their own agreement.
(10:42):
And, you know, pretty muchinsist that that all of their
recruiters sign them. And on theone hand, I mean, it's, it's a
good vehicle to protect thefirm. You know, one of the areas
that they, that they go into,which is, important is the who's
(11:03):
got the rights, you know, who,who got the resume in first,
etc, which, you know, there's awhole, you know, there's a
whole, you know, basis of that Iwant, I don't really want to get
into it here. But, you know,sometimes it's not the person
who gets a resume first, it'sthe person who actually knows
the candidate. But we couldargue that. But there's other
(11:23):
things in there which which areimportant. And I think that what
the law firms have to understandis that, on the one hand, you
want to protect yourself, but ifyou go too far and you and you
become draconian in yourapproach, what you're telling
the recruiter is, you know,don't, don't call me with your
(11:46):
candidates, because you're notgoing to get as good a deal with
us. And so you know, you know,you know, go ahead and send your
candidates elsewhere. I don'tthink most law firms want that
with partner candidates. Sothat's the issue, is you want to
(12:07):
protect yourself. On the otherhand, you don't want to be
draconian and do something inthere like a poison pill that's
going to dissuade recruitersfrom sending you their best
candidates. All right, so Ithink that there are, like, sort
of three basic issues that Ithat I want to go into. One is,
(12:28):
is the fee percentage now themarket for partners and law
firms at amla, 200 firms, 25%for an individual partner, and a
sliding scale down to at leastthe third partner in a group. So
if you have a partner in agroup, you would pay 25% for the
first partner, 20% sometimesit's 15% but 20% for the second
(12:53):
partner, and 15% of the thirdpart. And that's the base
compensation that's all basedon, yeah. Where it gets tricky
is when you get into groups, andif it's a particularly large
group, there's firms will put ina fee cap. And so the, you know,
the question is, is the fee capreasonable? And you know, my
(13:18):
sense of this is at least, Imean, at least the way we look
at it. And I think most of ourcompetitors will look at it, if
it's reasonable, we're going tobe fine with it. You know, it's
not like a, I mean, if it's amillion dollar cap or million
five, yeah, it's a lot of money.
But I'm looking at therelationship. I want to make the
deal. I don't you know, to me,that's not worth the hack. It's
(13:38):
when you know you do getsometimes a firm will come up
with, like, a 300,000 cap. Andif you're talking about four or
five partners, it'sunreasonable, no, and therefore,
therefore, you know, that willbe a problem. So that's one area
of issue. The other part of thisis, what is, how is a group
(14:00):
defined? And that can be reallytricky, because what happens a
lot is one or two partners beginthe process, and they talk, they
go to the firm, and they, youknow, the firm starts to say,
can you bring somebody else withyou? And, you know, as as the
recruiter, is the recruiterreally part of that process, or
(14:20):
is that something that's, youknow, organic within the firm,
and so often the recruiting firmwill argue that, well, I brought
you the first two, thereforeyou're gonna have to pay for
everybody else. I think thefirms use it differently, which
is, you brought us the first twowe'll pay your fine for that,
(14:41):
but you don't get any credit foranything else. I think there are
various versions of that.
Sometimes, when we were workingwith the group, we say there is
a potential for a group or fiveother partners who might come
along. So therefore it's aquestion of how. Much was the
recruiter involved? Again, myview is, if the recruiter was
(15:04):
involved and talked to the groupand talked to all the members of
the group before thistransaction happened, they
should be paid, yeah, maybe,maybe a bit less than what
normally would be done, becausethe firm did a whole bunch of
stuff on its own, but theyrecruiters should be paid unless
I think it's, it's, it's lessavailable or less required if,
(15:33):
if, in fact, it was one of thesesituations where the recruiter
really just represented one ortwo partners and that it just
sort of came out of that. Iwould take the firm side on that
so, but the provision has to bethe language of that provision
has to be written in a way thatit sort of covers all the
(15:55):
nuances there. So that can belittle when you're looking at
that particular provision. Butwe do think that the firms have
a right to make it clear thatyou know, that the recruiter
has, has had a role in theadditional partners. That's the
way I look at it. So, so that'sthe first, the first area of of
(16:19):
some controversy. Let's, let'sput it that way. Second area
relates to the guarantee period.
So the way this works with, withpart, you know, if you're not
doing, if you're doing raw staffrecruiting or executive
recruiting, you can, you canmake a guarantee that if the
person leaves within a year ofstarting, you replace the
(16:42):
individual. That's standard inthe non law firm partner
industry, right? It's evenstandard within the law firms,
but with regard to theirmanagement, and that's because
you can a recruiter can readilyreplace the person that has left
that there is a really goodchance that you will find
somebody else. You know, eithercircumstance has changed, or
(17:06):
they're very good people, orthey were the they were the
number two candidate, andthey're still available, you'll
be able to replace that person.
And therefore the replacement issufficient. But I think the
firms have found that law firmpartners is they're a different
animal. And therefore, if youwere, if you place a private
(17:27):
equity partner with $5 millionworth of business at Firm A and
that partner leaves, you know,in six months, you're not going
to be able to replace you couldwork forever. You could pay five
years and you would not replacethem. So firms obviously figured
that out, and, and, and they'vecome with basically money back
(17:52):
guarantees for for thosecircumstances, when, when, when?
Part, generally, what we find issome variation of a sliding
scale, pro rated give back. Soit might be like for the first
90 if somebody leaves within 90days, it's a full gift back,
(18:13):
because if they left within 90days, there's been a change in
their in their circumstance, achange of mind, something
disastrous happened. It's not aplace the way we look at it's
not a place within if you'releaving within 90 days. But
after that, there would be asliding scale that would go on
often, often throughout a fullyear, sometimes for only six
(18:35):
months, throughout, you know, sothat you would that the
recruiter would have to giveback a certain percentage of the
fee, depending on how long theperson stayed well.
Murray (18:47):
But we were, you know, when we were starting this
conversation, prepping for thisconversation, we talked about a
circumstance in which a which aconflict comes up during the
during during this guaranteetime, and that's to me, and
maybe you can explain what wewere talking about with this,
(19:08):
but to me, it seems it doesn't,it doesn't seem particularly
fair that the recruiter shouldhave to, you know, disgorge fees
if there's a conflict that hascome up. And maybe you can
explain that content, thatconflict context, because we all
know that they're checkingconflicts before the partners
come in, and they didn't checkthe conflicts well enough, you
know, shame on them. Butsometimes there's a subsequent
(19:32):
conflicts issue. So maybe youcan talk a little
Steve Nelson (19:34):
bit. Yeah, exactly. I mean, other words,
obviously, if I mean, I thinkthat the recruiter doesn't have
much, much weight to stand on ifthe the candidate didn't
disclose a major client orsomething like that, right? But
what happens more often is thatafter, after that person starts,
(19:54):
that the firm will will bring ina new potential client. It maybe
a very large client that willrequire that partner to give up
their main or one of their mainclients. So if this happens, you
know, again, you know, you know,several months down the road,
(20:18):
right, the partner's gottenthere is doing well,
everything's integrated, etc,and all of a sudden this
conflict comes up from therecruiter standpoint, and
frankly, from the candidatestandpoint, it's, it's like, you
know, why are we the guarantor?
You know, you made a businessdecision to bring in a new
client. You it's your, you know.
(20:41):
This is your, you know,liability, so to speak. You know
you'll have to deal with havingthis partner. And to be fair, I
mean, the partner himself orherself is, all of a sudden,
their career has been throwninto turmoil because their
expectations where they're goingto bring this client and
hopefully get some new clientsbased on that client, etc. So
(21:04):
it's an overreach, in my view,to have that kind of situation
come up and then the firm demandrefund, you know, again, you
know, if it again, I might lookat it differently if it came up
in the first 60 days, but, butcertainly after a certain period
of time, and it usually happensthat way. I don't think I've
ever had a situation where apartner started and then, you
(21:28):
know, left within 90 days. Imean, it just doesn't happen
very often. So that's one issue,but there are other ones, other
things that come up that thatend up a partner leave. One is a
partner can end up going to aclient. Could be a client of the
firms. It could be their ownclient that get an opportunity
(21:49):
to go to a client. Well, thatcould be a benefit to the firm,
right of a new client come in ornews, let's say it's a trade
association or something likethat. They could have a bunch of
new clients, sure. So, so again,the the recruiter is faced with
this, you know, obligation,which you know, the recruiter
(22:12):
feels like, well, you're, you'regetting benefit two ways on
this, you know, you you'regetting the the the new client,
and you're getting the feedback,you know, part of your feedback
government, sometimes they go,go to a government agency that
can, you know, that could alsobe a benefit to to a to a to a
firm. So, you know, my view isthat, you know, once you get
(22:34):
beyond six months, it's, it's,you know, I think it's you know,
everything's a little different.
And I'm not, I'm not saying thatyou never give money back after
after months, but anything, youknow, and then we have seen some
of the provisions where you haveto give back three quarters of
the fee for the first ninemonths that somebody there,
(22:56):
that, to me, is, is anoverreach. And again, that's the
kind of thing. If we asrecruiters see that in the
agreement, we're going to take anote of it, and, you know, you
might get the first candidate webring you because it's a good
fit, or something like that.
You're not going to hear from usagain very often, because we'll
(23:17):
find other firms that we can dobusiness with. So that's, it's
just, you know, the fact oflife, it's, it's, it's
Murray (23:23):
business, business decision, absolutely. Yeah,
alright. So
Steve Nelson (23:28):
then the third area, which is probably the
most, maybe the mostcontroversial and most
sensitive, is non recruitagreements. So if we make a
placement with your firm, right?
We agree, if it's a partnerplacement, we agree for to a one
year, you know, a one year, youknow, we're not, we're not sort
(23:54):
of recruiting your people for ayear, right, recruiting your
people, or recruiting thatcandidate, recruiting your
people, we we would neverrecruit that candidate, okay,
unless less circumstancessignificantly changed, and that
candidate came to us and said,you know, things are not working
out here. And we often, to behonest, we asked for them to
(24:16):
give, to get some sort ofauthorization from somebody,
some partner at the firm, orleader at the firm, is this is
not working, but if it's thejust the firm itself, we agree
not to recruit for a year, oncethe placements made. And I think
that's generally the way thatfirms look at it. But we have
run into to some firms and not,not, you know, not just a few,
(24:40):
but a fair number of firmswhere, where their approach is,
something upon something alongthe lines of, if you submit a
candidate, or if you sign thisagreement, you agree to
indefinitely, not. Not recruitany of our partners or any of
(25:00):
our people indefinitely,
Murray (25:04):
indefinitely.
Steve Nelson (25:06):
So that means it's sort of all time I send one
candidate who may or your firm,and you're asking me to not
recruit any of your peopleindefinitely. Well, I'm not
going to sign that because, Imean, we're a recruiting firm. I
mean, this is, this is comingabout, because so many people in
(25:27):
our industry, the legalrecruiting industry, are
basically just, they're justagents for lawyers. They're not,
they're not really recruiting.
They know a lot of lawyers. Whena lawyer calls them up and says,
I need to make a change, theyrepresent them. They take them
to a few firms, and that's howthey do their business. And for
those lawyers, recruitingdoesn't mean much, because they
don't do it. But if you're areal recruiting firm, and the
(25:50):
best, the best legal recruitingfirms out there, are recruiting,
okay, let's face it, you knowwhether it, you know it's any of
the name brand firms arerecruiting, yeah, so, so when I
get that, it's, it's like, okay,I'm not doing business with you.
I mean, I'm going to withdrawthis person. And, you know,
we're never, you know whenyou're not going to hear from us
(26:13):
again. Because it's like, youknow, it's to me, it's like, as
if you're if looking at from thelawyer point of view, let's say
you get asked by a client to doan RFP, and we do an RFP about,
you know you're looking, youknow, we're looking to hire you
to do, you know, workers, copwork, or something like that.
(26:35):
And we so you do the RFP. But aspart of the fine print of the
RFP, that says, as part of thisRFP, you agree never to sue us,
never to sue us again on any nomatter what I mean, would you, I
mean, you know, if you're theGeneral Counsel of that, if
you're the General Counsel ofthat law firm, would you, would
(26:57):
you sign that
Murray (27:00):
you that's why we always say, you know, the for those of
us who answer RFPs, that's whywe always say, Look, before you
put pen to paper, look at thatoutside council guidelines and
get it in front of the firmCouncil, because there's all
kinds of little nuggets in therelike that, right? Exactly.
Steve Nelson (27:17):
So, so any event.
So that's the idea is that youknow you as a firm, you're
limiting your access torecruiters if you do that. And
so therefore, I mean, I justthink you want to be reasonable
you, and I'll tell you the goodfirms for firm. We've had this
come up a few times where we wenegotiate with the firm and we
(27:38):
say, okay, we understand yourposition, and we will agree to
to the to the point at which isnot normally what we would do,
but just so we can can move thisalong. You know, have this
candidate considered is we'llagree that if there is a
candidate that you areconsidering from McCormick group
during that period of time, wewon't recruit for you, but once
(28:01):
that, if you decide not to hirethat Sure, not to interview that
person, then we're, you know,then it's, you know, it's free
ball. And I think we've gottenfirms to get to the point where
they understand that that's, youknow, that that our point of
view is legitimate, and that,you know, again, I mean, the
alternative is, you're going tohave us and many other search
(28:25):
firms that will not do businesswith
Murray (28:32):
that's a So, it's the, you know, it's in working with
law firms. They are, they areconservative businesses. They
approach their businessconservatively, and they
approach their business withwith, you know, risk management
being sometimes the the highestorder of of business. And so I
(28:59):
can imagine that that the when,when they're looking at
recruiting, or how they're goingto set up their their recruiting
agreements, they're going to belooking at minimizing risk, and
in so doing, I mean, there'snothing wrong with minimizing
risk. You have to do it. That'show you have to run a business.
(29:19):
You have to have risk toleranceto a certain level. Just that
law firms tend to have very lowrisk tolerance, which is always
interesting to me. But yougotta, you gotta, there's,
there's, there's a line, there'sa fine line, you know, right
between, between the risktolerance and the and the and
(29:40):
the, you know, kind of screwingup business relationships
because you're so, you're sorisk tolerant or intolerant, and
so, I guess, how does a, howdoes a firm, you know, dance on
that line of protecting itselfwhile still, you know, making
sure that. It has, it has accessto the pool of candidates that
(30:03):
that they need, and anymore, youknow, we talked about this a
little bit. We won't name names,but, you know, some firms are
seeing the the laterals as a asa critical factor in their
revenues, maybe even, you know,so
Steve Nelson (30:19):
that's that's entirely true if you, if your
firm is, you know you're, ifyou're doing, you know your
revenue projections becauseyou're you're planning to bring
in X number of levels per year.
You know you're going to haveto, you need to maximize your
your opportunities, and so youare balancing the the risk
factors, you know, you're about,you're you're balancing the
(30:44):
downsides and, you know, and therisk with the opportunities. And
so I think it's one of thosethings where I think you want to
have the person who is, who is,basically got the final say if
that person is also in charge ofthe recruiting strategy and the
and you know, the you know, youknow, the actual, you know
(31:10):
results, that person hasresponsibility over the results,
then you could probably getthere, because they'll
understand that they want tohave, they want to have access
to as many good candidates aspossible, and so that they, you
know, you know that they, yes,they'll want to protect
themselves. And that's wheresome of the issues come up,
(31:32):
where we talked about the thegroups and the being, you know,
you want to protect that,because that's, that's a little
different sort of issue. But Ithink in this area, in terms of
in terms of guarantees, and interms of the non recruits, I
think you want to be, you wantto make sure that, that you are,
that the recruiters, that youcan develop a partnership with
(31:55):
them, and that they're not justsending you the occasional
candidate, but you really startseeing, you know, a flow of
candidates from them, and youonly can do that if, if the if
the recruiter feels like youragreement is not draconian,
Murray (32:10):
yeah, yeah. Everybody has to share in the risk. It
can't be one sided, right? And Ithink that's that's critical.
That's a it's a very interestingtopic. I hope the firms are are
listening to this one.
Steve Nelson (32:24):
Well, we're going to be doing one of our
roundtables that we do withrecruiters. We got one next
week. We're going to talk abouta lot of these issues next week.
So, good, good, interesting. Ithink that's I just think that's
what you know. I think that youknow that this comes up a lot.
And I think these are importantissues, you know, that for our
(32:45):
industry. And I think that, Imean, I can, I can tell you one
thing which is unfortunate forour industry is that looking at
from the other side, from therecruiter, the law firm,
recruiter side, they do not havea high opinion of our industry
as a whole, because there is nobarriers to entry. You know, if
(33:07):
you've got a phone, you've got arecruiter, right? And, and
nowadays you don't even need aphone, right? Yeah, you know you
gotta blame, you know, yougotta, you know, Wi Fi, you've
got recruiter, and, and sotherefore there's no, you know,
you nobody can get, can getthrown out of the business,
Murray (33:24):
right, right, right.
There's not licensing that'sgoing on, right?
Steve Nelson (33:29):
So, I mean, I recognize that, and I think the
firms are caught in a situationwhere they've got to protect
themselves, and they've got tocome up with good, good
provisions to protectthemselves, yet, on the other
hand, they still need to getaccess to the best candidates.
Yeah,
Murray (33:46):
yeah, absolutely. Well, what did we learn today? We
learned that. We learned that weall need to share the risk, and
it's all Kumbaya, right, right?
Steve,
Steve Nelson (33:58):
really, I wish that was the case. All
Murray (34:03):
right. Well, very good.
Any parting thoughts before wesign off?
Steve Nelson (34:08):
No, I don't think so. I think we've covered it.
Okay, yeah, I we've got somegood we've got some good plans
for some future upcomingepisodes. So we will be back. We
will let you know. But we'vegot, you know, a couple of
guests that we're talking about.
Yeah, absolutely, bring in some,some different perspectives. So
yeah,
Murray (34:26):
absolutely, and and, and we'll, if we can, we'll drop the
link to your friend'sdocumentary, the document
director friend, into the shownotes as well. So if you've got
that handy, send it on andwe'll, we'll add it to the show
notes. Okay, all right, allright. You.
Murray Coffey, welcome to Steve's rules
(00:07):
periodic podcast featuring SteveNelson, executive principal at
McCormick group in the law andgovernment affairs practice. My
name is Murray Coffey, and I amthe principal of M Coffey, a law
firm, marketing and businessdevelopment Boutique. For more
information, please visit mywebsite@mcoffee.net
Steve has been an executiverecruiter for nearly three
(00:28):
decades, and without namingnames, he is ready to spill the
tea on best practices, and maybea few not so best practices by
firms and candidates that he hasseen during his career,
recruiting some of the mostdriven and successful
professionals into highlyprofitable and growing firms.
Steve is a former lawyer andjournalist and is a fellow of
the college of law practicemanagement and a proud son of
(00:50):
Wilkes Barre, Pennsylvania. Fulltransparency here, Steve has
helped my career immenselythrough the years and has become
something of a career shaman tome and I know many others. Hey,
Steve,
Steve Nelson (01:05):
how are you? Okay?
Murray Coffey, doing I
Murray (01:08):
am doing great. It is actually starting to cool off
here in Dallas. We actually gotbelow 90.
Steve Nelson (01:20):
Hey, listen, I'm excited, particularly I just
went to New York, and my comedymentor, Tom Dustin, who runs the
Key West Comedy Club, is thesubject of a new documentary
called Tom Dustin portrait ofcomedians. So I was there for
the premiere of New York. So itwas really great. It was great
(01:41):
to see him, but it was alsogreat, a great movie. If it ever
comes to your city, I recommend,
Murray (01:47):
oh, is it? It's not on one of the streaming services
right now,
Steve Nelson (01:50):
not yet, not yet, but I think it will get there.
Okay,
Murray (01:53):
okay, well, I'll keep an eye out for it. I enjoy, I enjoy
a good documentary, for sure,especially one where there might
be some yucks. There aredefinitely that. There are
definitely that, right? Well, aswe often do, we will start off
this episode of Steve's rulesgetting kind of what's going on
(02:15):
out there, Intel that Steve andhis colleagues at McCormick
group are hearing. They'vealways got their ears to the
ground. And also, I thinkthey've got a new report that
Steve's going to talk to usabout. So, Steve, what are you
hearing out there? Right?
Steve Nelson (02:30):
Well, I think the biggest thing going on in the DC
area right now is that we'reseeing a spike in government
hiring, hiring from thegovernment by major law firms.
It's uh, we've already counted13 in the month of September,
which is the highest this year,and was well above what was last
year. Now, earlier this year,the government hiring was
(02:52):
lagging behind last year's pace.
I remember, which is normal,because an election year
generally is a slower year,because a lot of the people who
are, you know, high, high up ingovernment, have pledged to to
stay to the end of the term. Butin September, we started seeing
them, and they've continued intoOctober. So we're thinking that
there's been a change in in thethe loyalty, let's say, of the
(03:18):
of the of government workergovernment attorneys right now,
with regard to staying until theend of the administration, and I
may have something to do withthe fact that, you know,
there's, there was a change inthe the election, with Biden
dropping out, Harris coming in.
So that may have been a factor.
Now I will say this, threeagencies are the key agencies
(03:41):
that are that are being hiredfrom it. So I think that really
will tell you a lot, DOJ, SECand the FTC, and so those are
all areas of importantimportance to business and where
really, no matter what happenswith the the election, there's
(04:03):
going to be a lot of issues thatare going to be raised right
next year and the year after,with regard to policies at the
SEC, everything they're doingwith regard to crypto. I mean,
that's a huge deal. Everybody'snot sure where that's going.
Obviously the FTC and the wholeissue of, you know, price
gouging, and Paris is talkingabout that, that may turn out to
(04:25):
be something that will be a newpolicy. Antitrust has been
strong, has been a strong areaof interest throughout, frankly,
this entire administration. Sowe're seeing a continuation of
that. Don't want to, don't wantto mislead anybody to say that,
well, it's across the board, andthat, you know that people from
the Federal CommunicationsCommission are going to be in
(04:47):
tremendous demand. We're notseeing that, but we're seeing it
that is going on.
Murray (04:55):
Yeah, and those are all agencies that have levels of
enforcement can. Abilities thatthat are are critical to to law
firms in terms of representingtheir clients. So that is
fascinating. And I, you know,who knows how this election is
going to turn out. It still is,is, you know, neck and neck,
which, frankly, I find hard tobelieve at this point, but there
(05:17):
were that that's where we are.
Steve Nelson (05:20):
So and you were telling me earlier, we were
discussing this earlier, that ainteresting wrinkle is the fact
that you've got Kamala Harris, aformer prosecutor, that's right,
is, is, is, is the Democraticcandidate, and if she were to
become president, you would, youwould think that there's going
(05:42):
to be heightened enforcement,you know, more aggressive
posture. And of course, that'sgoing to be of, oh, yeah,
interest or even scariness tobusiness. Yeah.
Murray (05:55):
Look, she's, she was, when she was attorney general.
She was an activist, AttorneyGeneral, and and she had a
reputation for using the powersof law enforcement to try to try
to stimulate some some societalchange. Whether, whether, you
know that was, whether that wassuccessful or not, I think is an
(06:19):
open question, but it's aninteresting, you know, she that
poses an interesting issue forlaw firms. If you have a
prosecutor who is, who is headof the United States, you know,
government and will inevitablyappoint whoever is going to be
the head of the DOJ is going tobe somebody that Kamala Harris
(06:41):
is, is, is sort of in sync withso could be, could be very
interesting time, that's forsure. It'll be interesting
either way. I guess you know so.
And you guys have got somethingnew, some new reporting that
you're doing too, right?
Steve Nelson (06:56):
Yeah, no, we, just last month, we issued our first
report on employee benefits.
Partner hiring for us ynational, we have been
developing a strong practice inthis area, terms of ERISA
lawyers, again, mostly partnersin council. And you know,
(07:18):
because of that, we've, youknow, we've really been tracking
a lot of the moves, and so wedecided to to give that, to
provide that information on anational basis. You know, that's
an area right now. It's, it'salways been, it's super
technical, yep, and it's andit's something where, you know,
(07:41):
firms need the expertise. It'snot a money maker for the most
part, but it is. It's a clientholder, you know. So the clients
do a merger, they need thatexpertise, and they're going to
get the best person to providethat expert, that's right. And
so therefore these, theselawyers, are very much in
(08:03):
demand. And therefore this isreally interesting information
for for firms to know. What youknow, where are the people
going? Are they? Yeah, are theygoing to boutiques? Are they
going to big firms, etcetera. Sostay tuned. If you, if you're
not subscribing, you know, youknow, you'll get the notes below
about how to reach us, and, youknow, we'll get you on the list.
(08:24):
So very excited about thatproject. Yeah,
Murray (08:28):
that's, that's great.
And you know, with, you know,we're seeing, we're seeing
interest rates come down, sothat's going to stimulate the
deal world. And you're right. Sothis could, we could see a whole
bunch of mergers, acquisitions,you know, spin offs, and that's
going to drive a lot of, a lotof need in this, in this area,
(08:50):
and it is highly technical and,and, and Full of landmines. So,
so it's, it's great and verycool that you guys are tracking
that so, so carefully. And
Steve Nelson (09:07):
I want to give a shout out to rob Virgo, who was
my colleague, yes, practice. Soif you're an Arista lawyer, and
you're want to, you know, wantto get an idea what your job
options are, give Rob a call.
Murray (09:20):
Yeah, give Rob a call.
He's a great guy too. We, we'vehad him on the podcast in the
past. He's just, just great. Solet's focus in on what kind of
the the primary subject hereSteve, and that this is what I
would this is what I would call,you know, the fine print of the
of the recruiting world. And Ithink you called it when we were
(09:42):
talking about the subject. Youcall it the poison pill, and,
and I found that intriguing and,and as we talked about it, it
became even more intriguing so,so, and this is probably, you
know, the this is, this isgetting to that inside baseball
point where. Where you know thepeople who care about it are
really going to care about it,and probably other recruiters.
(10:03):
And as we often know, Steve, thetraffic that goes to this, this
particular podcast seems tointerestingly come from lots of
your competitors. So right,
Steve Nelson (10:16):
yeah, and it may come from the competitors. It's
this is definitely a topic ofinterest to law firm management,
in particular, terms of this isimportant, and really what, what
we're talking about is thevarious law firms recruiting
agreements with outsiderecruiters. And virtually every
am law 100 200 firm has them astheir own their own agreement.
(10:42):
And, you know, pretty muchinsist that that all of their
recruiters sign them. And on theone hand, I mean, it's, it's a
good vehicle to protect thefirm. You know, one of the areas
that they, that they go into,which is, important is the who's
(11:03):
got the rights, you know, who,who got the resume in first,
etc, which, you know, there's awhole, you know, there's a
whole, you know, basis of that Iwant, I don't really want to get
into it here. But, you know,sometimes it's not the person
who gets a resume first, it'sthe person who actually knows
the candidate. But we couldargue that. But there's other
(11:23):
things in there which which areimportant. And I think that what
the law firms have to understandis that, on the one hand, you
want to protect yourself, but ifyou go too far and you and you
become draconian in yourapproach, what you're telling
the recruiter is, you know,don't, don't call me with your
(11:46):
candidates, because you're notgoing to get as good a deal with
us. And so you know, you know,you know, go ahead and send your
candidates elsewhere. I don'tthink most law firms want that
with partner candidates. Sothat's the issue, is you want to
(12:07):
protect yourself. On the otherhand, you don't want to be
draconian and do something inthere like a poison pill that's
going to dissuade recruitersfrom sending you their best
candidates. All right, so Ithink that there are, like, sort
of three basic issues that Ithat I want to go into. One is,
(12:28):
is the fee percentage now themarket for partners and law
firms at amla, 200 firms, 25%for an individual partner, and a
sliding scale down to at leastthe third partner in a group. So
if you have a partner in agroup, you would pay 25% for the
first partner, 20% sometimesit's 15% but 20% for the second
(12:53):
partner, and 15% of the thirdpart. And that's the base
compensation that's all basedon, yeah. Where it gets tricky
is when you get into groups, andif it's a particularly large
group, there's firms will put ina fee cap. And so the, you know,
the question is, is the fee capreasonable? And you know, my
(13:18):
sense of this is at least, Imean, at least the way we look
at it. And I think most of ourcompetitors will look at it, if
it's reasonable, we're going tobe fine with it. You know, it's
not like a, I mean, if it's amillion dollar cap or million
five, yeah, it's a lot of money.
But I'm looking at therelationship. I want to make the
deal. I don't you know, to me,that's not worth the hack. It's
(13:38):
when you know you do getsometimes a firm will come up
with, like, a 300,000 cap. Andif you're talking about four or
five partners, it'sunreasonable, no, and therefore,
therefore, you know, that willbe a problem. So that's one area
of issue. The other part of thisis, what is, how is a group
(14:00):
defined? And that can be reallytricky, because what happens a
lot is one or two partners beginthe process, and they talk, they
go to the firm, and they, youknow, the firm starts to say,
can you bring somebody else withyou? And, you know, as as the
recruiter, is the recruiterreally part of that process, or
(14:20):
is that something that's, youknow, organic within the firm,
and so often the recruiting firmwill argue that, well, I brought
you the first two, thereforeyou're gonna have to pay for
everybody else. I think thefirms use it differently, which
is, you brought us the first twowe'll pay your fine for that,
(14:41):
but you don't get any credit foranything else. I think there are
various versions of that.
Sometimes, when we were workingwith the group, we say there is
a potential for a group or fiveother partners who might come
along. So therefore it's aquestion of how. Much was the
recruiter involved? Again, myview is, if the recruiter was
(15:04):
involved and talked to the groupand talked to all the members of
the group before thistransaction happened, they
should be paid, yeah, maybe,maybe a bit less than what
normally would be done, becausethe firm did a whole bunch of
stuff on its own, but theyrecruiters should be paid unless
I think it's, it's, it's lessavailable or less required if,
(15:33):
if, in fact, it was one of thesesituations where the recruiter
really just represented one ortwo partners and that it just
sort of came out of that. Iwould take the firm side on that
so, but the provision has to bethe language of that provision
has to be written in a way thatit sort of covers all the
(15:55):
nuances there. So that can belittle when you're looking at
that particular provision. Butwe do think that the firms have
a right to make it clear thatyou know, that the recruiter
has, has had a role in theadditional partners. That's the
way I look at it. So, so that'sthe first, the first area of of
(16:19):
some controversy. Let's, let'sput it that way. Second area
relates to the guarantee period.
So the way this works with, withpart, you know, if you're not
doing, if you're doing raw staffrecruiting or executive
recruiting, you can, you canmake a guarantee that if the
person leaves within a year ofstarting, you replace the
(16:42):
individual. That's standard inthe non law firm partner
industry, right? It's evenstandard within the law firms,
but with regard to theirmanagement, and that's because
you can a recruiter can readilyreplace the person that has left
that there is a really goodchance that you will find
somebody else. You know, eithercircumstance has changed, or
(17:06):
they're very good people, orthey were the they were the
number two candidate, andthey're still available, you'll
be able to replace that person.
And therefore the replacement issufficient. But I think the
firms have found that law firmpartners is they're a different
animal. And therefore, if youwere, if you place a private
(17:27):
equity partner with $5 millionworth of business at Firm A and
that partner leaves, you know,in six months, you're not going
to be able to replace you couldwork forever. You could pay five
years and you would not replacethem. So firms obviously figured
that out, and, and, and they'vecome with basically money back
(17:52):
guarantees for for thosecircumstances, when, when, when?
Part, generally, what we find issome variation of a sliding
scale, pro rated give back. Soit might be like for the first
90 if somebody leaves within 90days, it's a full gift back,
(18:13):
because if they left within 90days, there's been a change in
their in their circumstance, achange of mind, something
disastrous happened. It's not aplace the way we look at it's
not a place within if you'releaving within 90 days. But
after that, there would be asliding scale that would go on
often, often throughout a fullyear, sometimes for only six
(18:35):
months, throughout, you know, sothat you would that the
recruiter would have to giveback a certain percentage of the
fee, depending on how long theperson stayed well.
Murray (18:47):
But we were, you know, when we were starting this
conversation, prepping for thisconversation, we talked about a
circumstance in which a which aconflict comes up during the
during during this guaranteetime, and that's to me, and
maybe you can explain what wewere talking about with this,
(19:08):
but to me, it seems it doesn't,it doesn't seem particularly
fair that the recruiter shouldhave to, you know, disgorge fees
if there's a conflict that hascome up. And maybe you can
explain that content, thatconflict context, because we all
know that they're checkingconflicts before the partners
come in, and they didn't checkthe conflicts well enough, you
know, shame on them. Butsometimes there's a subsequent
(19:32):
conflicts issue. So maybe youcan talk a little
Steve Nelson (19:34):
bit. Yeah, exactly. I mean, other words,
obviously, if I mean, I thinkthat the recruiter doesn't have
much, much weight to stand on ifthe the candidate didn't
disclose a major client orsomething like that, right? But
what happens more often is thatafter, after that person starts,
(19:54):
that the firm will will bring ina new potential client. It maybe
a very large client that willrequire that partner to give up
their main or one of their mainclients. So if this happens, you
know, again, you know, you know,several months down the road,
(20:18):
right, the partner's gottenthere is doing well,
everything's integrated, etc,and all of a sudden this
conflict comes up from therecruiter standpoint, and
frankly, from the candidatestandpoint, it's, it's like, you
know, why are we the guarantor?
You know, you made a businessdecision to bring in a new
client. You it's your, you know.
(20:41):
This is your, you know,liability, so to speak. You know
you'll have to deal with havingthis partner. And to be fair, I
mean, the partner himself orherself is, all of a sudden,
their career has been throwninto turmoil because their
expectations where they're goingto bring this client and
hopefully get some new clientsbased on that client, etc. So
(21:04):
it's an overreach, in my view,to have that kind of situation
come up and then the firm demandrefund, you know, again, you
know, if it again, I might lookat it differently if it came up
in the first 60 days, but, butcertainly after a certain period
of time, and it usually happensthat way. I don't think I've
ever had a situation where apartner started and then, you
(21:28):
know, left within 90 days. Imean, it just doesn't happen
very often. So that's one issue,but there are other ones, other
things that come up that thatend up a partner leave. One is a
partner can end up going to aclient. Could be a client of the
firms. It could be their ownclient that get an opportunity
(21:49):
to go to a client. Well, thatcould be a benefit to the firm,
right of a new client come in ornews, let's say it's a trade
association or something likethat. They could have a bunch of
new clients, sure. So, so again,the the recruiter is faced with
this, you know, obligation,which you know, the recruiter
(22:12):
feels like, well, you're, you'regetting benefit two ways on
this, you know, you you'regetting the the the new client,
and you're getting the feedback,you know, part of your feedback
government, sometimes they go,go to a government agency that
can, you know, that could alsobe a benefit to to a to a to a
firm. So, you know, my view isthat, you know, once you get
(22:34):
beyond six months, it's, it's,you know, I think it's you know,
everything's a little different.
And I'm not, I'm not saying thatyou never give money back after
after months, but anything, youknow, and then we have seen some
of the provisions where you haveto give back three quarters of
the fee for the first ninemonths that somebody there,
(22:56):
that, to me, is, is anoverreach. And again, that's the
kind of thing. If we asrecruiters see that in the
agreement, we're going to take anote of it, and, you know, you
might get the first candidate webring you because it's a good
fit, or something like that.
You're not going to hear from usagain very often, because we'll
(23:17):
find other firms that we can dobusiness with. So that's, it's
just, you know, the fact oflife, it's, it's, it's
Murray (23:23):
business, business decision, absolutely. Yeah,
alright. So
Steve Nelson (23:28):
then the third area, which is probably the
most, maybe the mostcontroversial and most
sensitive, is non recruitagreements. So if we make a
placement with your firm, right?
We agree, if it's a partnerplacement, we agree for to a one
year, you know, a one year, youknow, we're not, we're not sort
(23:54):
of recruiting your people for ayear, right, recruiting your
people, or recruiting thatcandidate, recruiting your
people, we we would neverrecruit that candidate, okay,
unless less circumstancessignificantly changed, and that
candidate came to us and said,you know, things are not working
out here. And we often, to behonest, we asked for them to
(24:16):
give, to get some sort ofauthorization from somebody,
some partner at the firm, orleader at the firm, is this is
not working, but if it's thejust the firm itself, we agree
not to recruit for a year, oncethe placements made. And I think
that's generally the way thatfirms look at it. But we have
run into to some firms and not,not, you know, not just a few,
(24:40):
but a fair number of firmswhere, where their approach is,
something upon something alongthe lines of, if you submit a
candidate, or if you sign thisagreement, you agree to
indefinitely, not. Not recruitany of our partners or any of
(25:00):
our people indefinitely,
Murray (25:04):
indefinitely.
Steve Nelson (25:06):
So that means it's sort of all time I send one
candidate who may or your firm,and you're asking me to not
recruit any of your peopleindefinitely. Well, I'm not
going to sign that because, Imean, we're a recruiting firm. I
mean, this is, this is comingabout, because so many people in
(25:27):
our industry, the legalrecruiting industry, are
basically just, they're justagents for lawyers. They're not,
they're not really recruiting.
They know a lot of lawyers. Whena lawyer calls them up and says,
I need to make a change, theyrepresent them. They take them
to a few firms, and that's howthey do their business. And for
those lawyers, recruitingdoesn't mean much, because they
don't do it. But if you're areal recruiting firm, and the
(25:50):
best, the best legal recruitingfirms out there, are recruiting,
okay, let's face it, you knowwhether it, you know it's any of
the name brand firms arerecruiting, yeah, so, so when I
get that, it's, it's like, okay,I'm not doing business with you.
I mean, I'm going to withdrawthis person. And, you know,
we're never, you know whenyou're not going to hear from us
(26:13):
again. Because it's like, youknow, it's to me, it's like, as
if you're if looking at from thelawyer point of view, let's say
you get asked by a client to doan RFP, and we do an RFP about,
you know you're looking, youknow, we're looking to hire you
to do, you know, workers, copwork, or something like that.
(26:35):
And we so you do the RFP. But aspart of the fine print of the
RFP, that says, as part of thisRFP, you agree never to sue us,
never to sue us again on any nomatter what I mean, would you, I
mean, you know, if you're theGeneral Counsel of that, if
you're the General Counsel ofthat law firm, would you, would
(26:57):
you sign that
Murray (27:00):
you that's why we always say, you know, the for those of
us who answer RFPs, that's whywe always say, Look, before you
put pen to paper, look at thatoutside council guidelines and
get it in front of the firmCouncil, because there's all
kinds of little nuggets in therelike that, right? Exactly.
Steve Nelson (27:17):
So, so any event.
So that's the idea is that youknow you as a firm, you're
limiting your access torecruiters if you do that. And
so therefore, I mean, I justthink you want to be reasonable
you, and I'll tell you the goodfirms for firm. We've had this
come up a few times where we wenegotiate with the firm and we
(27:38):
say, okay, we understand yourposition, and we will agree to
to the to the point at which isnot normally what we would do,
but just so we can can move thisalong. You know, have this
candidate considered is we'llagree that if there is a
candidate that you areconsidering from McCormick group
during that period of time, wewon't recruit for you, but once
(28:01):
that, if you decide not to hirethat Sure, not to interview that
person, then we're, you know,then it's, you know, it's free
ball. And I think we've gottenfirms to get to the point where
they understand that that's, youknow, that that our point of
view is legitimate, and that,you know, again, I mean, the
alternative is, you're going tohave us and many other search
(28:25):
firms that will not do businesswith
Murray (28:32):
that's a So, it's the, you know, it's in working with
law firms. They are, they areconservative businesses. They
approach their businessconservatively, and they
approach their business withwith, you know, risk management
being sometimes the the highestorder of of business. And so I
(28:59):
can imagine that that the when,when they're looking at
recruiting, or how they're goingto set up their their recruiting
agreements, they're going to belooking at minimizing risk, and
in so doing, I mean, there'snothing wrong with minimizing
risk. You have to do it. That'show you have to run a business.
(29:19):
You have to have risk toleranceto a certain level. Just that
law firms tend to have very lowrisk tolerance, which is always
interesting to me. But yougotta, you gotta, there's,
there's, there's a line, there'sa fine line, you know, right
between, between the risktolerance and the and the and
(29:40):
the, you know, kind of screwingup business relationships
because you're so, you're sorisk tolerant or intolerant, and
so, I guess, how does a, howdoes a firm, you know, dance on
that line of protecting itselfwhile still, you know, making
sure that. It has, it has accessto the pool of candidates that
(30:03):
that they need, and anymore, youknow, we talked about this a
little bit. We won't name names,but, you know, some firms are
seeing the the laterals as a asa critical factor in their
revenues, maybe even, you know,so
Steve Nelson (30:19):
that's that's entirely true if you, if your
firm is, you know you're, ifyou're doing, you know your
revenue projections becauseyou're you're planning to bring
in X number of levels per year.
You know you're going to haveto, you need to maximize your
your opportunities, and so youare balancing the the risk
factors, you know, you're about,you're you're balancing the
(30:44):
downsides and, you know, and therisk with the opportunities. And
so I think it's one of thosethings where I think you want to
have the person who is, who is,basically got the final say if
that person is also in charge ofthe recruiting strategy and the
and you know, the you know, youknow, the actual, you know
(31:10):
results, that person hasresponsibility over the results,
then you could probably getthere, because they'll
understand that they want tohave, they want to have access
to as many good candidates aspossible, and so that they, you
know, you know that they, yes,they'll want to protect
themselves. And that's wheresome of the issues come up,
(31:32):
where we talked about the thegroups and the being, you know,
you want to protect that,because that's, that's a little
different sort of issue. But Ithink in this area, in terms of
in terms of guarantees, and interms of the non recruits, I
think you want to be, you wantto make sure that, that you are,
that the recruiters, that youcan develop a partnership with
(31:55):
them, and that they're not justsending you the occasional
candidate, but you really startseeing, you know, a flow of
candidates from them, and youonly can do that if, if the if
the recruiter feels like youragreement is not draconian,
Murray (32:10):
yeah, yeah. Everybody has to share in the risk. It
can't be one sided, right? And Ithink that's that's critical.
That's a it's a very interestingtopic. I hope the firms are are
listening to this one.
Steve Nelson (32:24):
Well, we're going to be doing one of our
roundtables that we do withrecruiters. We got one next
week. We're going to talk abouta lot of these issues next week.
So, good, good, interesting. Ithink that's I just think that's
what you know. I think that youknow that this comes up a lot.
And I think these are importantissues, you know, that for our
(32:45):
industry. And I think that, Imean, I can, I can tell you one
thing which is unfortunate forour industry is that looking at
from the other side, from therecruiter, the law firm,
recruiter side, they do not havea high opinion of our industry
as a whole, because there is nobarriers to entry. You know, if
(33:07):
you've got a phone, you've got arecruiter, right? And, and
nowadays you don't even need aphone, right? Yeah, you know you
gotta blame, you know, yougotta, you know, Wi Fi, you've
got recruiter, and, and sotherefore there's no, you know,
you nobody can get, can getthrown out of the business,
Murray (33:24):
right, right, right.
There's not licensing that'sgoing on, right?
Steve Nelson (33:29):
So, I mean, I recognize that, and I think the
firms are caught in a situationwhere they've got to protect
themselves, and they've got tocome up with good, good
provisions to protectthemselves, yet, on the other
hand, they still need to getaccess to the best candidates.
Yeah,
Murray (33:46):
yeah, absolutely. Well, what did we learn today? We
learned that. We learned that weall need to share the risk, and
it's all Kumbaya, right, right?
Steve,
Steve Nelson (33:58):
really, I wish that was the case. All
Murray (34:03):
right. Well, very good.
Any parting thoughts before wesign off?
Steve Nelson (34:08):
No, I don't think so. I think we've covered it.
Okay, yeah, I we've got somegood we've got some good plans
for some future upcomingepisodes. So we will be back. We
will let you know. But we'vegot, you know, a couple of
guests that we're talking about.
Yeah, absolutely, bring in some,some different perspectives. So
yeah,
Murray (34:26):
absolutely, and and, and we'll, if we can, we'll drop the
link to your friend'sdocumentary, the document
director friend, into the shownotes as well. So if you've got
that handy, send it on andwe'll, we'll add it to the show
notes. Okay, all right, allright. You.
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