People costs are
invariably the largest cost category for a law firm, and the art of maximising profitability
is to maintain a delicate balance between having sufficient lawyers on the
payroll to cover peak activity periods, whilst not being over-staffed in
quieter times. Nothing will hit the
bottom line of a firm faster than having lawyers on six-figure salaries
twiddling their thumbs. As a consequence,
in the economic downturn of the last few years, many firms have attempted (sometimes
successfully) to maintain profit-per-equity-partner ratios by ruthlessly
culling excess staff. In the short term
this clearly works from a financial perspective, but it will be interesting to
see whether, once the war for talent heats up to previous heady levels, those
firms who aggressively downsized in difficult economic times will be able to
compete with those who took a longer term view.
Whatever the outcome, it seems that the bumpy road of the last few years
means firms are now trying to take a more innovative approach to staffing
levels, and relying less on the traditional employer/employee arrangements.
Previously in this
blog, I have commented on Berwin Leighton Paisner’s Lawyers on Demand business. Now Freshfields Bruckhaus Deringer has
officially launched its own contract lawyer initiative (branded Freshfields
Continuum), whereby the firm will draw on its 3,500-strong pool of former senior
fee earners on an ad-hoc basis to provide additional temporary staffing during
busy periods, for periods of up to six months at a time. It is likely that most of the roles will be
predominantly behind-the-scenes rather than key client facing or negotiation
roles.
The aim appears to
be to target principally Associate level alumni (presumably on the basis that
to have made it to Associate level they must have earned their spurs at the
firm to some degree in the past, and therefore should be capable of slotting
back in quite quickly without too much hand-holding required). However, other levels of seniority will also
be considered, with pay being set at one of four bands – junior, mid-level,
senior and partner. Alumni will be
permitted to apply for work on projects below their level of experience, but if
they do so they would only be paid in accordance with the rate of the position
advertised, and not at the rate of their own experience. This should be a benefit to clients, who will
therefore not be paying inflated rates for an over-qualified lawyer to do a
relatively straightforward task.
This is believed
to be the first example of a law firm attempting to commercially leverage its
alumni network, other than through simply winning business from the alumni when
they move on to client company positions.
The firm plans to
review the scheme in six months’ time, at which point a decision will be taken
over whether it should be rolled out further to include the firm’s
international network. It is difficult
to know what Freshfields would consider to be success for these purposes - there
is no target for the number of candidates it is aiming to sign up, but the firm’s
alumni network currently stands at around 3,500 fee earners.
From Freshfields’
perspective, it is easy to see why this would be an attractive
proposition. It gives the firm maximum flexibility
to tailor its human resources to match the ebb and flow of client work, without
the fixed costs associated with hiring permanent employees, and without the
risks of hiring contract staff who are not known to the firm and who are not
familiar with the way it operates. For a
small number of Alumni, it may also be an interesting prospect, but I would not
expect that there would be a flood of people signing up for the scheme. I assume that a significant majority of the
Freshfields Alumni are now happily working in other jobs that would preclude
them from taking up the offer of being included in the Continuum bank of contractors. This means that the likely candidates are
those who chose to step off the conventional career treadmill. However, I question how many of them would
leap at this opportunity. For those who
need the stability of a regular income, this scheme is unlikely to be ideal and
there may be other contract lawyer or flexible working arrangements (including
as a Freshfields employee) which can probably provide them with a steadier
stream of assignments and a greater degree of flexibility regarding working
arrangements. But it might be an attractive prospect for
those who want to work in short bursts to enable them to travel, or to fit in
around family arrangements, or who want to dip their toe back in to the legal
market after a career break, for example, or those who simply don’t like to
countenance the monotony of a full time permanent role. I am sure there will be some who fit the bill
–I just doubt it will be a large number.
But as someone who
has been critical of law firms’ lack of imagination and ability to innovate, I
hope that Freshfields Continuum does indeed have success with this initiative. Anything which increases the flexibility of
working options for talented individuals who might otherwise be lost to the
profession, has got to be applauded.
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