Over the Apr-Jun quarter, the Top 7 NZ Law firms[1] have lost more lawyers than they hired. Only two firms hired more than left and then the difference was just one more hire than leaver.[2]
The first quarter of this year showed equal movement to other firms, in-house roles and overseas from the Top 7 firms. The second quarter of 2022 shows these are still the preferred avenues after leaving a Top 7 firm, although with most heading overseas (35%), then to other firms (28%) and finally to in-house roles (24%).
Trend to hire from in-house remains
While 60% of the new hires into the Top 7 firms were from private practice, there was still a noticeable trend of 28% coming from in-house. This has been a key pool of talent that the Top 7 have been dipping into since the second quarter of 2021. Since then, the percentage of new hires from in-house has ranged from 19-27.5% (except for a dip in the first quarter of this year to 13%). Showing this is not a section of the talent to be ignored.
While we’ve previously commented that it’s historically been difficult to move from in-house into private practice,[3] there are advantages for firms that decide to hire these lawyers. If the company in question is a key client of the firm, this strengthens the relationship between the law firm and company. The firm subsequently has a competitive advantage when it comes time to tender and/or renew the contract terms. In addition, in-house lawyers have a different perspective and can provide valuable insight into the running of companies and what’s important to their stakeholders.
Firms need to shift to proactive recruitment
The difference between those returning from overseas to the Top 7 firms (2.5% of known new hires) and those leaving on their OE (35%) is vast. Simply looking at that statistic shows that there is a continuing shortening in the lawyer market. In addition, 5 out of the Top 7 firms lost more than they hired in the first and second quarter of 2022.
Consequently, being reactive in this market is no longer a viable option. No matter how good your employer brand, EVP (employee value proposition), employee connections and alumni networks are. Law firms are either scrambling for talent to fill a high number of live roles[4] or are vulnerable to 1-2 unforeseen resignations in key parts of their business.
In this market, establishing and maintaining relationships with lawyers is the best recruitment strategy – both in the short and long term. By investing in building relationships with future prospective employees, firms will have a ready pool of lawyers they can call on when needed. Those lawyers will be willing to move because the firm has invested in the relationship and aligned the opportunity with that lawyer’s individual timeframes and drivers.
So how is your firm doing on proactive recruitment? Have you got enough resource internally to afford your team the time to build the firm’s future talent pipeline? If not, why not? With the growing war for talent and high number of live vacancies, there is an urgent need for law firms to expand their (often lean) business services and HR teams. Those teams will manage live vacancies while also spending valuable time investing in building a relationship with your future talent.
Insource Recruitment Technology helps firms and in-house legal teams build relationships with their future talent in advance before they need to hire. Insource is being used by 18 of the largest 20 law firms in New Zealand as well as many innovative mid-sized law firms around the country and specialist law firms. With an Insource subscription you can identify and connect the right lawyers with your future roles, build relationships directly and analyse the rich data contained on all NZ practising lawyers to help inform your future talent sourcing strategies. We’d love to hear from you and discuss how an investment in Insource could deliver better hiring decisions both now and in the future.
Why struggle to recruit from a small and shrinking pool of available talent when you can choose from the complete talent community using Insource? An Insource subscription ranges from $500 – $2,500 per month depending on the size of your firm. To book a demo, contact us here.
[1] Russell McVeagh, Bell Gully, Chapman Tripp, Simpson Grierson, MinterEllisonRuddWatts, Dentons Kensington Swan and Buddle Findlay.
[2] The statistics contained in this Insight are based on the publicly available information as at the time of writing.
[3] In-house lawyers are strolling into private practice (2021).
[4] As at time of writing, there are currently over 300 advertisements on Seek for ‘lawyer’ jobs. Anecdotally, Insource is aware of several law firms that are no longer advertising their vacant roles because they are receiving no applications or a few low quality applications.
