Top 6 Recruiting Budgeting Tips
Recruiting Budgeting is unique at most law firms; however, there are core principles and guidelines that can and should be implemented at every firm to facilitate a successful process. Based on my 40 years of recruiting and human resources experience, here are my Top 6 Tips for developing and prioritizing your attorney recruiting budget:
Tip 1: Align Your Recruiting Budget with Management’s Hiring Goals
It is crucial that your recruiting budget be built on realistic projections both for OCI and lateral attorney candidates. Attorney compensation is the largest expense item in all law firm budgets, so getting the headcount projections right really drives the budget process. If you are a national or global firm, that means collaborating with your firmwide and local offices and their respective practice section leaders (Corporate & Securities, Emerging Growth, Finance, IP, Litigation, Tax, etc.) to establish their OCI and lateral associate hiring projections (or wish lists) for the coming fiscal year. Depending on your firm’s structure, goals for lateral partner hiring may be included in your process, although at some firms, the lateral partner hiring budgeting process is handled separately.
The budgeting process will require constant back-and-forth communication among partners and the recruiting team. However, it is essential to make sure that all practice section needs are addressed. Pro Tip 1 - That process can be time-consuming, so be sure you make budgeting requests well in advance of when annual budget requests are due.
Through accurate headcount projection, you will establish a comprehensive and effective organizational design. Pro Tip 2 - A hybrid budgeting approach and a people management platform can be very effective in streamlining this process.
Once you have the lateral and OCI requests from each practice section or group, a presentation should be made by the recruiting leadership team to firm management for them to determine final annual targets and goals (this can also be a slow process, so allow plenty of lead time), at which point you can budget.
Tip 2: Keep Your Recruiting Team on the Same Page as Accounting/Finance and HR
It is essential to keep a robust line of communication between all the teams involved in the budgeting process. Typically, the firmwide budget process is driven by the accounting/finance team, and the Attorney Recruiting Budget is a key part of a much larger whole. Timelines and deadlines should be clearly communicated, as should all review steps for final budget approval. Sometimes changes in attorney headcount requests are determined through hard-to-track communication channels or communicated through emails, making it easy for the information to get lost, especially in large firms with complex talent acquisition processes.
Put together a system/process that ensures that any budgeting change you make is clearly communicated to accounting/finance and human resources, so they do not operate on outdated information.
Do not bring unwanted attention to the attorney recruiting budget process by not providing accurate headcount projections or not providing timely information during the budget cycle. Always strive to be perceived as a critical team player.
Tip 3: Cost Per Hire
It is important to the credibility of the Attorney Recruiting Team that it be prepared to address the Cost Per Hire for lateral and OCI associates and perhaps, lateral partners. Without detailing all of the internal and external components that go into a cost-per-hire analysis (those resources are readily available from other sources), having a strong understanding of your cost per hire is critical to your credibility to firm management, as it demonstrates you are on top not only of the efficiency of your process but are cognizant of how it impacts the firm’s bottom line.
A solid understanding of what it costs to hire attorneys through OCI, through lateral associate hiring, and through partner hiring (those should be three separate numbers), along with the capability to provide documentation of the methodology for determining those costs upon request is mission critical. The ability to verbally explain it all in clear and concise terms is a bonus and fantastic for the recruiting team’s credibility.
Curious about the hidden costs? Check out another blog here.
Tip 4: Be Realistic, Yet Aggressive, in Your Budget Requests
At most firms, budgeting is a process undertaken annually, and at many firms, it is the only opportunity to get your bite of the budget apple. All firms are only as good as their talent, but for a multitude of reasons, sometimes firms are reluctant to dedicate the resources necessary to compete for top talent.
It is important for recruiting leadership to push the envelope in obtaining the necessary budget to obtain that top talent. As well-intentioned as they may be, the accounting/finance and human resources leaders and teams do not have the market expertise that you and your team do regarding the recruiting marketplace. Nor does the majority of firm management. It is incumbent on recruiting leaders and the recruiting team to do the digging and research to be in a position to present a credible case to firm management regarding the recruiting budget, including what it takes to be competitive in attracting the best talent. Be aggressive in proposing your budget, including significant fees for search firms (likely by far the biggest percentage of your budget proposals).
Have the confidence to present yourself as the market expert in what it takes to compete in attorney recruiting. That is exactly what firm leadership wants and expects from its recruiting leaders. Have partner allies that “get it” regarding attorney recruiting to reinforce your message and help get the budget dollars required to compete.
Finally, always be creative and thoughtful in budgeting for special projects (updated recruiting website, collateral recruiting materials, applicant tracking system purchases and upgrades, etc.) that improve the team’s efficiency and in the long term will help keep costs down.
Tip 5: Recruiting Marketing and Advertising
OCI Budgets are typically driven by many factors, particularly summer program costs and costs associated with law school programming and actual interviewing and travel. The biggest expense by far in lateral associate and partner hiring budgets are the fees paid to search firms for identifying top candidates. On the partner side, those fees can represent up to 90% of your budget, and for large firms in the high seven-figures annually.
What all attorney recruiting has in common is the need to market and advertise your firm’s brand. Products like Flo Recruit’s Forward and the Vault and Chambers rankings are critical differentiators for entry-level and experienced attorneys who are seeking information regarding your firm’s metrics, practice areas, culture, and attorney satisfaction beyond what is offered on a firm’s website. Compare impact and choose wisely in partnering with the providers who provide the most impact for your firm in the market.
Additionally, you need budget dollars to keep the attorney recruiting portion of your firm’s website updated and attractive to candidates, plus have attractive collateral material regarding the firm that can be sent electronically to candidates. That collateral material is particularly important to recruiting lateral partners, where a quick reference brochure or PowerPoint highlighting the firm’s history, financial performance, areas of strength and expertise, and including short bios of successful lateral partners is critical to both candidates and search firms.
Be thoughtful and creative in determining how your firm can most effectively leverage its brand in your marketing and advertising and collateral materials, and be sure to include the recruiting budget necessary to be market-leading and impactful.
Tip 6: An Applicant Tracking (ATS) System Improves Budget Efficiency
Easy access to historical information regarding attorney hiring is crucial for budget forecasting and the ability to track cost per hire. If you’re managing your attorney hiring through spreadsheets that need to be manually updated - like most law firms! - you're at a significant disadvantage in having up-to-date hiring statistics with reports at your fingertips that Flo Recruit’s ATS can provide.
A market-leading ATS like Flo helps you guarantee that historic hiring information can be shared quickly and accurately, keeping your recruiting numbers aligned with accounting/finance and human resources. This means all involved parties have access to the information they need without accessing irrelevant data.
Flo Recruit will make your life easier in the budgeting process by improving communication, speed, accuracy, and efficiency. Be sure to allocate adequate budget dollars for the purchase and annual licensing of a market-leading ATS to improve your recruiting cost per hire and for a better return on investment of your recruiting budget dollars.