For more than half a century, corporate legal departments and law firms have used secondment arrangements to meet the legal department’s need for high-quality, interim additional consultants to alleviate absenteeism or sudden increases in legal work. These flexible talent agreements provided by law firms have largely been viewed as symbiotic, with each side seeing for themselves how happy they are with the deal. As it turns out, however, many of these attorney personnel agreements are in fact not strategic and often have a negative impact on clients, law firms, and the lawyers on duty.
Why are law firms posted? Secondments are sometimes viewed as a viable flexible talent solution when additional bandwidth is needed internally but hiring new team members doesn’t make sense for the legal department. Typical circumstances are major legal disputes and during the integration phases before and after the merger. Secondments are also often used to fill the role of existing team members who are released due to illness, military or family leave. Some companies use the secondment of law firms when staff restrictions or hiring freezes prevent them from accepting a required permanent position.
What is symbiotic about posting? For law firms, seconding can sometimes be a means of fulfilling a good client’s request, with the potential added benefit of having a law firm team member embedded with the client and presumably generating enough revenue to at least cover the firm’s cost of hiring the lawyer cover up. For the Legal Department, the immediate need for additional resources is met by a talented, highly qualified attorney who has been audited by one of their prestigious law firms.
Delegations from law firms are symbiotic when the goals of the firm and the client are aligned. For example, a secondment can sometimes provide a convenient way for internal teams to anchor knowledge of the company in their law firm and give the law firm a better understanding of their clients’ needs. It can also be a way to help young lawyers gain “business-side” experience before returning to the firm to better serve clients in the future. In some cases the company is testing a potential future hiring for the company and the firm does not mind permanently losing the attorney as it is expected that new work will flow back into the firm if the attorney moves permanently. Sometimes a law firm simply displaces a lawyer who does not fit into the firm in the long term.
But there are many cases – most of the time – where the disadvantages of posting outweigh the advantages. Customers often look for posting agreements – and companies agree to them – simply because “it’s always been done that way”. A deeper analysis shows that secondments are often not really beneficial for law firms, clients or, in particular, the seconded lawyers.
Let’s start with law firms. First, secondees are typically billed at high discounts, which results in significant financial damage to the company. Often companies bill their MPs much closer to the cost of their employment than to their billing rate. In these cases, the law firm misses the income that the lawyer could have achieved for the law firm by settling at market rates. This often results in the company losing hundreds of thousands of dollars in profits every time it is posted.
Second, customers often ask a company’s most talented or marketable employees too, leaving them unable to serve other key customers. A top employee can work with several customers at the same time; Dedicating them full-time to a single client can disappoint the other clients, or at least affect the workflow of those projects. This interruption in the workflow often results in the company writing off hours so that customers do not have to pay the cost of training replacement staff. Then, if – or if – the secondee comes back, the same workflow difficulties arise again when the lawyer is reintegrated.
Third, removing an employee from a team can feel the same as if you lost them to another job (which, in fact, often is). The effect can be particularly pronounced in smaller teams, among other things lowering the morale of already stressed team members and risking further churn through burnout. There is also the problem of possible deterioration in the quality of the work product caused by the transition.
From the client’s point of view, the lawyers provided by law firms are often junior lawyers. And even if they are more experienced lawyers, they almost never have any experience in internal work. This limits the short-term effectiveness of the secondee and leads to an increased burden on the existing internal team, which has to spend time training the secondee in a new way of attending the law. Lawyers with in-house experience know that the skills required to be a great employee in a law firm are not necessarily the same skills required to be a great in-house attorney right away. Law firms seek the analysis of many problems that require detailed consideration, the consideration of many different problems, the precise elaboration – and the multi-layered review of the work result by sometimes several more experienced lawyers. Companies are looking for precise answers to legal questions – and that takes time.
Legal departments, on the other hand, have to work “at the pace of business”. In-house lawyers need to provide actionable responses, often instantly, in line with the company’s business objectives and risk appetite. Legal departments look for answers to business questions – as quickly as possible. Switching between office style and in-house practice often takes time and training – but legal departments often resort to secondments because they need a lawyer who can immediately relieve others of their work.
Finally, even when a MP is provided at a significant discount, the law firm’s resources are not cheap and are typically significantly more expensive to the legal department than comparable alternatives.
Perhaps most importantly, seconding agreements can also have a negative impact on the lawyers on secondment. Many employees who agree to serve as secondees do so with the idea that this is an easier way to meet their billable hourly needs, or that the internal work will be less demanding. However, as mentioned earlier, the skills required in a company are different from those in a company. This can frustrate the customer, but it can also be a big shock for the secondee.
Second, from their legal career perspective, seconded time is a time that does not generate the same income as its peers due to cheaper labor. This can be problematic depending on your career level and law firm. While the partners understand that seconding the lawyer generated less revenue, this does not change the fact that many of the MP’s colleagues have far outpaced them when it comes to billing and contact with decision-makers. (Secondees who are out of sight are also out of mind.) After their return, secondees often find that they have been overtaken by other employees, have difficulty getting back to the same customer teams or are no longer in contact with other customers, because they missed important events. In some cases, upon their return, MPs may face the resentment of their colleagues who had to bear their weight while they were absent. Some returning secondees can even be viewed as failures because they were not hired on a permanent basis by the customer.
Third, this internal period will likely require the attorney to take a break, or at least up to a year of traction, to start his own business. This often makes it more difficult to find partners.
At a time when law firms and business leaders are striving to better develop young lawyers, in many situations secondments can have the opposite effect on the career of a promising young lawyer. In short, a posting opportunity is often not in a young employee’s best long-term interests.
The legal industry is entering a new era with lots of new ways to get work done. So why are non-symbiotic postings still often used? Sometimes it’s because other, better options aren’t known, and often it’s because both businesses and customers don’t fully understand the downside for everyone involved. However, some remain reluctant to take alternative routes because of concerns about the quality of lawyers outside of traditional law firms. Gone are the days when only law firms and legal departments had top-notch attorneys, so you don’t have to compromise on quality. In the meantime, many outstanding lawyers with demanding big law and in-house backgrounds are flexibly available. These attorneys have a track record of allowing them to adopt the kind of very well paid, flexible practice only available to the most accomplished attorneys.
While law firms in the past had no choice but to comply with a client’s request for posting despite the negative consequences for the firm and the delegates – or to reject it and drive the client into the arms of a competing law firm – law firms now have great alternatives to conventional ones Postings. Likewise, legal departments no longer need to push their law firms for a secondment and can save that favor for other occasions.
With the growing pace of legal teams requiring highly developed specialties and rapidly changing activities, including the rise of proactive investigations and ESG-related compliance, lawyers with a big law pedigree have never been needed to fill in the loopholes for corporate legal departments conclude. But in an increasing number of cases, traditional law firm secondments are not the best model. Instead, it is important to find legal team members who can get into work quickly and inexpensively and who can fit into the existing in-house team without putting excessive pressure on the law firms or impairing the careers of promising lawyers. And flexible talent legal counseling firms can be key to bridging the gaps and avoiding these costly pitfalls.