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Legal recruiters have been seeing double lately — but only when it comes to their paychecks. A beneficiary of the supercharged marketplace for lawyers, recruiters are reaping a host of new financial incentives: placement fees topping 40 percent in some cases, bonuses and stock options. Many are increasingly being hired on retainer to find lawyers for firms. Though they are not thrilled about the expense, law firms are also courting recruiters like never before. Desperate for talent, some have begun hosting receptions and luncheons for recruiters they previously preferred to ignore. And for the recruiters themselves, the red-hot market is forcing them to work harder, smarter, and be accessible around the clock. “It’s a crazy time,” says recruiter Kristin Hebert of Kristin Hebert Associates. “During one conference call I’ll get paged and have 12 voice-mail messages. The pace of hiring has increased without question.” “You really need to be responsive in an appropriate and quick manner,” says recruiter Matthew Feuer of McClure & Feuer. Feuer said he often responds to e-mails from home at 11 p.m.: “It’s not just a matter of turning off the light at 5 o’clock.” MONEY MATTERS While top recruiters are doing very well — each recruiter interviewed for this article reported a record year in 1999, with some more than doubling their profits from the year before — they still have their work cut out for them. “People say ‘You must be making money hand over foot,’ but even if a candidate gets 10 to 12 offers, we only get one fee,” says Katharine Patterson, who has been consulting and recruiting for more than 20 years. Nevertheless, Patterson and her colleagues aren’t complaining. “Because the market is so strong, firms are increasing their fees to recruiters,” says Feuer. And such increases come on top of the automatic raises accorded to recruiters when associate salaries were bumped up earlier this year. Feuer says that the standard fee for bringing a lateral to a firm is 25 percent of the lawyer’s first-year salary. About a year ago, however, some firms began doling out 35 to 40 percent to recruiters placing hard-to-find attorneys. And some companies are upping the ante to find in-house lawyers. “I’m seeing a willingness to go up to 30, 33 percent,” says a recruiter who asked to remain anonymous. The recruiter said this mirrors the standard fee paid executive search firms for placing CEOs and CFOs. Finding attorneys fast can also mean more moolah in recruiters’ pockets. Hebert reports firms paying recruiters bonuses of $10,000 to $15,000 for partners hired by a particular date. But not all firms have jumped on the bandwagon. “Twenty-five percent of $125,000 is pretty substantial for placing a first-year,” says Laryl Garcia, the recruiting coordinator at San Francisco-based Brobeck, Phleger & Harrison. “Raising that has never been our practice. We have hired approximately 160 attorneys firmwide since Jan. 1, and we’re not having trouble getting people through the door.” Retainers comprise another big piece of the changing market. Recruiters say that the practice of doling out dollars up front is becoming more commonplace. “With a retainer, a firm is paying for your time irrespective of whether you place a client,” explains recruiter Avis Caravello of Avis Caravello Attorney Search Consultants. “I have so many contingency searches … if a firm really wants to get a search done, they buy a recruiter’s time.” “In the corporate world it is common practice, but in the legal world it isn’t for some reason,” adds Hebert. “More firms will have to start thinking about that.” But conducting searches on retainer isn’t necessarily heaven on earth for recruiters. Caravello says she is very careful about how many retainers she takes on. “I have to be honest with the client about whether or not the search is a realistic one,” she says. Caravello adds that she won’t take on such a search if she knows finding good candidates will be next to impossible. Of course, recruiters say they don’t mind taking on searches that offer another new incentive — stock. “If I’m paid in stock, I have more financial incentive than with another company,” Hebert says. So far, several corporate clients have swapped stock for her in-house placement services. HIGH DEMAND Recruiters say their services are in such demand that, in the words of Marty Martinez, recruiting coordinator at San Francisco’s Orrick, Herrington & Sutcliffe, “It’s rare to find a lateral attorney who hasn’t come through a search firm.” “I definitely think we are using recruiters more now than in years past,” says Christopher Byers, partner in charge of recruiting at San Francisco-based Pillsbury Madison & Sutro. “Recruiters used to be responsible for a small proportion of lateral hires, but now it’s a lot more.” Small firms are also turning to recruiters. Caravello says that a few years ago, small firms could put an ad in the classifieds and hear back from numerous qualified candidates. But now, “they are competing for this limited pool of talent and are having a difficult time,” she says. Recruiters are finding they also have to help firms adapt to the faster pace of hiring. “Some candidates accept offers before some firms have gotten back to them,” says Hebert. “Most firms still go through the traditional hiring practice … I tell my client, ‘Now listen, if you go the traditional old-line, the candidate will be long gone.’ “ “One thing I’m trying to work on is the time it takes us to get and review resumes,” says Byers. “Speed is now very important, and we’re trying to turn things around very quickly.” While firms may appreciate recruiters — including smaller firms who have increasingly enlisted their services — not all are happy about having to use them, primarily because of the expense. “Relying on search firms,” Brobeck’s Garcia asserts, “is not a good thing.” Indeed, firms are now urging their own attorneys to help attract new talent. Martinez says that in response to the tight market, the bonus for Orrick attorneys who bring in laterals was just boosted 33 percent to $10,000 — far cheaper than paying $30,000 or more to a recruiter. Referral bonus plans have become the norm at top firms. Garcia says Brobeck pays referral fees of $5,000 for first- through third-year associates and $15,000 for fourth-years and higher — though the new hires must stay at least six months for their references to collect. Filling spots left vacant as attorneys hop in-house and from firm to firm isn’t the only challenge. Firms are aggressively adding attorneys — not merely maintaining their current staffing levels. “I’m seeing more firms expanding into regions they didn’t feel they needed to be in until recently, especially Orange County [Calif.] and San Diego,” says Bill Nason of Watanabe & Nason, which does a lot of work placing partner groups in new offices. And as for in-house demand — “We’ve got in-house work coming out of our ears,” says Feuer, “and it’s going to continue.” RED CARPET TREATMENT Outside recruiters aren’t the only ones struggling to keep up with the demands of the market. Internal law firm recruiters are also working harder, doing their best to keep their outside counterparts well informed — and impressed. Caravello says this underscores the most significant change for recruiters. “Law firms are recognizing the worth of legal recruiters and the value that we can add,” she says. “They are seeing recruiters as a viable part of the firm’s growth plan. It’s a really refreshing change, because for a while recruiters were seen as a necessary evil.” “Firms are being more solicitous to get our attention and to get us to devote time and effort,” adds Patterson. “The job of law firm recruiting coordinators used to be to keep recruiters away from partners. Now they are very helpful and are willing to give us direct contact with people in the firm. We’re no longer being seen as adversaries.” Instead of hanging up on recruiters — a response one veteran recruiter recalls experiencing more than once — law firms are now at their beck and call. Some firms, like Brobeck and Heller Ehrman White & McAuliffe have held informational receptions intended to “fire up the troops,” as one Southern California recruiter put it. “Getting information from firms used to be like pulling teeth … It’s tough to sell a candidate on a firm if the firm is close-mouthed,” says a San Francisco recruiter. “Opening up on issues like profits per partner and compensation makes our job much more effective.” And other firms are taking the wining and dining a step further. Palo Alto, Calif.’s Cooley Godward and Los Angeles’ Gibson, Dunn & Crutcher recently hosted luncheons for recruiters at swanky San Francisco venues. “What it does,” explains Hebert, who attended Gibson, Dunn’s luncheon at Rubicon, “is to get Gibson at the top of the page, versus some other clients. We are the de facto marketing representatives on the behalf of firms. We give them momentum — it sounds much better when you can tell a candidate that the firm just had a reception.” But while Feuer spoke highly of the luncheons he has attended, he says such events are somewhat of a beauty contest for recruiters. “There is some jockeying that goes on below the surface,” he explains. “It feels a little odd … Recruiting has become an intensely competitive business.” Yet, few of the recruiters kid themselves that the frenzied pace and financial rewards will last forever. After all, they’ve survived previous economic ups and downs. “It’s feast or famine,” says Hebert, “and I’ll always take feast.”

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