Using Flexible Legal Talent to Navigate Hiring Freezes
By Charlie Sandel
Hiring freezes can be an enterprise-wide problem, but for already overwhelmed legal teams, which tend to have even more work and face novel challenges in a recession, they can be a disaster. How can in-house legal departments navigate these challenges without compromising outcomes or overwhelming existing teams?
According to Axiom’s recent survey of legal leaders, 94% predict a potential hiring freeze is likely due to economic circumstances; 41% report it’s very likely or already happening.
What’s worse, though, is that all legal leaders (100%) say it is very difficult to hire the right attorneys to meet their needs, with more than a third reporting it very or extremely difficult.
What are overburdened legal teams to do when they don’t have the resources available to make a full-time hire? And where should they turn when they do have the resources to make a full-time hire but aren’t able to find a lawyer who has the experience they need?
The answer is simple: strategic utilization of flexible legal talent can help already-overwhelmed in-house legal departments better weather hiring freezes and provide support when making a full-time hire doesn’t make sense or isn’t feasible for other business reasons. In fact, utilizing flexible legal talent and exercising variable spend often makes more sense qualitatively and financially.
The true cost of hiring full-time
In a recessionary environment, the cost of hiring full-time in-house legal talent goes well beyond salary and benefits; for many in-house legal leaders, severance and the cost of team morale should also be of concern.
Even if legal leaders get the green light to hire, ongoing volatility calls into question the permanence of that hire. Legal layoffs have been making headlines recently, and given the current economic climate, many expect them to continue. When layoffs are imminent, more-recent hires are often the first to be cut, which means the cost of severance should be called into question.
And just as significant, the cost to legal team morale should be called into question, too. According to Axiom’s 2023 report, all legal leaders report feeling stressed or burned out in their current roles. We already know legal leaders are facing tremendous pressure, both anecdotally and through survey findings. And GCs have taken notice: four in five GCs (81%) are more concerned about their legal team’s mental well-being now than they have been in the past. Over two-thirds of GCs (69%) say ongoing economic volatility has negatively impacted the mental health of their legal team. Nearly as many (60%) say the same is true of their own mental health.
Onboarding and helping to ramp up full-time employees inevitably add tasks to existing teams’ already-full plates. Losing a support system they helped build impacts team morale in a way that cannot be understated at a time when GCs should be acutely concerned about attrition among their teams. For example, 79% of deputy general counsels (DGCs) are open to new positions outside their current employer/role, with 22% actively searching. More than half of in-house lawyers are open to finding another job, with 14% actively searching. And even among those not actively searching, the majority (53%) still report it’s at least somewhat likely they’ll look for a new position within the next year.
Economic uncertainty reminiscent of the 2008 recession
While it’s a tale of multiple economies, depending on industry and geography, with some companies still making big investments, others are having to repurpose and rethink their strategies. Across the board, there's a tremendous amount of uncertainty about what’s going to happen over the next year. Many remain hopeful this economic cycle won’t be as impactful as previous recessions, but it’s difficult to anticipate how this one will compare, and for many, it’s reminiscent of what they experienced in 2008. But here are two big differences between the current economic environment and what in-house counsel weathered 15 years ago.
Increasing outside counsel fees, lack of commercial acumen and insight
Law firm rates have skyrocketed in 2023, with some reports anticipating rate hikes of 7-8% on average, and some upwards of 30%. These dramatic increases are out of line with many in-house legal departments’ tightened budgets this year.
Importantly, though, legal leaders are finding law firms to be a particularly ineffective tool for the challenges they’re currently facing. While law firms may have once been the go-to resource for legal departments needing extra help, fewer than half of legal leaders (47%) say they are an effective solution for the problems they’re currently facing. Why? Law firms lack commercial acumen and insight into the nitty-gritty work they need to get done. Nearly two in five (42%) say law firms provide conceptual advice rather than the practical advice their departments need.
Conversely, nearly two-thirds of legal leaders (65%) see flexible talent providers as a particularly effective solution to their department’s resourcing challenges. In an era of shrinking budgets and rising law firm rates, almost half (41%) say flexible talent providers offer better value for every budgeted dollar.
Alternative legal service providers are becoming less alternative
In his byline for Legal Futures, Daniel Hayter, Managing Director & Vice President of Axiom Europe, argued that “given current economic contraction, the demand for efficiencies in terms of cost will only increase. New world realities, along with the interest in working for flexible talent providers will only accelerate. Those two forces combined is why we believe 2023 will be the year that officially removes the ‘A’ from ALSPs.”
The post-COVID legal landscape has accelerated the mainstreaming of alternative legal service providers (ALSPs) or flexible legal talent providers. Flexible legal talent providers like Axiom have become not only an accepted but a well-respected tool in the toolbox of legal departments and legal leaders, both in times of economic uncertainty and when they’re facing other novel challenges.
Axiom, for example, has built a brand based on our successes and the work we’ve been able to help legal departments accomplish over the past 23 years. The reputation we’ve been able to build with clients has fully embedded Axiom as both an integral and well-understood piece of the legal ecosystem.
Are flexible legal talent providers just a Band-Aid solution?
No, flexible legal talent providers are not a Band-Aid solution at all; flexible legal talent have the unique ability to very quickly become an extension of the in-house legal team and require a shorter onboarding period then traditional full-time hires.
Axiom’s bench of talent has a breadth of prior in-house experience and bring best practices and knowledge from their wide range of experiences at different companies. Unlike other outside counsel, Axiom’s flexible legal talent have the ability to quickly ramp up and become embedded within the legal department. Over 60% of legal leaders say the lengthy onboarding process and/or time-consuming administrative management needs of law firms are core problems that prevent them from being an effective solution for their department’s resourcing challenges, but 63% recognize that flexible talent providers offer effective administrative management and/or quick onboarding to help make them an ideal solution.
And flexible legal talent providers have the ability to not only implement and manage more strategic initiatives, but they’re also able to create and update templates and workflows, write playbooks to improve processes that will help increase efficiencies, and continue to reduce the burden on in-house counsel long after their assignment within the department has ended.
Using technology to make the onboarding of flexible legal talent more efficient
Not only can Axiom’s flexible legal talent help improve efficiencies within in-house legal departments, but Axiom is helping to pave the way to make the onboarding of flexible legal talent more efficient, too.
Axiom’s Access Legal Talent platform empowers legal hirers to find the right legal talent, right away, by allowing them to browse and connect with talent in real time. Talent can be filtered by practice area, industry, and years of experience to help ensure they have access to lawyers with the experience they need to help alleviate the pain points their department is currently experiencing.
How does the quality of flexible legal talent compare to other outside counsel?
Quality of talent is of utmost concern to legal hirers. Axiom’s thoughtful and strategic recruiting process has resulted in an extensive bench of high-quality, experienced, and innovative lawyers who enjoy the benefits of Axiom’s model. It’s appealing to them because it allows them to practice with the flexibility and work-life balance that law firms or other more traditional models can’t afford, while giving them the opportunity to expand and share their skillsets with the in-house teams who need their support the most.
Reach your goals without lowering your standards: Find the right legal talent, with the right level of seniority and most relevant experience.
Charlie Sandel is Vice President, Senior Client Advisor at Axiom. He’s a former GC of American Eagle Outfitters and Regional GC of Levi Strauss.
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