San Francisco's Golden Gate Bridge/Credit: canadastock/Shutterstock.com

The rent is too damn high in Silicon Valley—and it's driving off in-house candidates.

Bay Area legal recruiters said it has become increasingly common for in-house candidates at all levels to turn down offers in Silicon Valley, explicitly citing “cost of living” as the reason for their decision. The shrinking pool of available candidates coupled with growing demand for in-house counsel is keeping positions open in the region for longer than usual.

“I've had candidates not be able to accept assignments because of the cost of living here. And that's what they say, 'cost of living.' I think it's a very common term now that I'm hearing more regularly,” said Elisabetta Fabiani, a legal recruiter and Silicon Valley branch director of staffing firm Robert Half International.

She's seen the biggest impact on legal department support staff hiring in towns such as Facebook's home base Menlo Park and neighboring Palo Alto, where Tesla Inc. and Hewlett Packard Enterprise are located. The average home price in either town is more than $2 million, according to Zillow.

The average pay for in-house support employee—administrators, file clerks and secretaries—is under $60,000, according to Robert Half's 2019 salary guide.

That's left support staff candidates, many of whom Fabiani said live further south in San Jose, with a tough choice: take the job and a possible two-hour round-trip commute, or waive the offer for a position closer to affordable housing.

“We have candidates simply turning down jobs based on location,” Fabiani said. “They don't even wait to hear the pay, to hear about the job. The minute I tell them the job's in Menlo Park or the job's in Palo Alto, they politely decline. Which is very different from seven years ago.”

Lawyers in-house are left to pick up the administrative work that needs to be done as job openings linger unfilled for weeks, sometimes months, longer than usual, she said. Legal departments have begun introducing hybrid roles, merging paralegal positions with support responsibilities to offset the lack of administrative staff.

Carol Warren Simon, a managing director at legal recruiting firm Major, Lindsey & Africa's San Francisco in-house practice group, said she's seen legal departments struggle to attract nonlocal candidates for “mid- and lower-level attorney roles” with five to 10 years of experience.

Candidates have explicitly told her, too, that “cost of living” is their reason for turning jobs down. That's a shift from when she started in legal recruiting around five years ago.

“Candidates from other parts of the country were more often than not very eager to come to the Bay Area. Yes, it's expensive, but it's where it's happening, it's exciting, it's beautiful. Everybody seemed to want to come here,” Simon said. “But in the last year or so I'm hearing much more hesitancy about it.”

The “veneer has gotten a little thin as far as the Bay Area goes,” she said, speculating it's in part due to increased media coverage of rising costs and wealth inequality in the region.

General counsel hiring hasn't been unaffected. While GCs and chief legal officers are the top paid earners in their department, that's true in any city. Fabiani said she's seen GC roles stay open longer than usual, sometimes more than six months, with candidates concerned over the high cost of living.

Legal execs might be offered a high compensation to lead a legal team in Silicon Valley, but, Simon noted, “that package doesn't go as far in the Bay Area as it might in other parts of the country.” She's seen increased competition from states such as Texas, where taxes, commute times and home prices are often lower.

Bay Area companies are changing the way they hire legal talent in response. Simon said she's seen a slight shift in focus on hiring local attorneys who don't have to move for the position.

There is also an increased emphasis on noncompensation perks: mentorship, career development and a powerful company mission. While Silicon Valley is expensive, it's also still a hotbed of tech startups and talent, Simon and Fabiani said. That's a big plus for some lawyers.

“The Bay Area has remained a leader in innovative companies, innovative technologies of all kinds. That continues to be a huge draw that employers will certainly emphasize,” Simon said. “Even if they can't pay the same compensation … they are inventing tomorrow's technology.”