As we approach the second half of the year, top firms are picking up lateral associates, an indication that the hiring market in the Nigerian legal sector remains active. This is particularly so for Senior Associates, who span the breath between associate and partner. Senior associates have taken off the training wheels of young novice associates yet are unencumbered with the responsibility or loyalty of partnership. In addition, law firms, generally, have fewer Senior Associates than associates which means on one side, that a well-primed Senior Associate can negotiate very beneficial employment packages and on the other, that the loss of such an Associate will be a significant blow to the host firm.
Law firms are hiring lawyers in practices including Dispute Resolution, Capital Markets, Banking and Finance, Intellectual Property, and Fintech. There are several reasons why lawyers may choose to leave their current employment; it could be because of dissatisfaction with the firm’s management, lack of support for their practice group, or stilted academic and career growth. As this trend is unlikely to wane soon, it is imperative for these firms to capitalize on the resulting vacancies by incorporating new laterals who possess synergistic qualities attractive to the firm’s growth plan.
The US National Association for Law Placement, Inc, survey on 2021 Lateral Hiring noted that the average number of lateral associates hired per office or firm in 2021 was about 11 and the median was four compared to an average of approximately two and a median of one for lateral partner hires. Lateral associate hiring accounted for 69.2% of lateral hirings in 2021 and lateral partner hirings accounted for 14.7%. Other lateral hiring was pegged at 16.1% of lateral hiring.
While overall lateral hiring was up across the board, offices in firms of 251-500 lawyers experienced the largest increase in lateral hiring (137.9%), and offices in firms of 250 or fewer lawyers had the smallest increase (79.3%).
On a regional basis, the level of lateral hiring per office was highest in the Northeast, with a median of 10 and an average of 18 lateral hires in 2021. In terms of aggregate volume change, volume was also up the most in the Northeast region (177.5%).
Indicators in the Nigerian Legal Sector
Firstly, the growth in the country’s startup space is unprecedented. In fact, according to a BCG report, the number of local startups that have secured funding between 2015 and 2020 has increased by 4%, a growth rate 6 times faster than the global average. This has created the need to hire experienced legal associates who can provide practical legal guidance on activities like; incorporation, product development, determination and protection of intellectual property, and more importantly, fundraising. Most startups, in a bid to get the best of both worlds, hire mid-level or Senior Associates with a well-rounded background in full-service law practice, or more specifically, lawyers that have been able to create a niche for themselves in the practice area(s) that is peculiar to their line of business(es). At the scaling stage, these lawyers play a host of different roles from sitting on the board, company secretarial functions, to advisory services during mergers and acquisitions.
Secondly, the trend in today’s workplace is for lawyers to increasingly view their employment as temporary, negotiable, and market-driven. Hence, lawyers today do not identify with or feel as dependent on any particular employer for career success, because lawyers often no longer perceive their current employment as necessarily holding the promise of longevity, job security, or long-term career opportunities. This has occasioned a rise in the movement of lateral lawyers both at the mid and Senior Associate levels.
Furthermore, there is an “equilibrium of opportunities” for both the law firms and the lawyers. Lawyers leave their present employers for numerous reasons including practice area preferences and the desire for more favorable compensation packages, advancement opportunities, an improved or more visible platform to service clients, professional development, work-life balance, or different law firm culture. In turn, law firms take advantage of the increased mobility of experienced associates (Mid/Senior) to accomplish their own goals, such as speeding firm growth, expanding specific practice areas, and increasing diversity.
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In a recent conversation with the Interface Manager of a top commercial law firm in Nigeria on lateral hires heating up in the legal sector, it was discovered that lateral moves have been more frequent with regard to certain practice areas such as Banking & Finance, Capital Markets, and Technology. As a result, corresponding lateral hires have been made to feel the vacuum, cushioning it with as adequate a pool of entry-level lawyers or trainees, as possible (mostly Youth Corp members).
Quote:
“If you have a lawyer spend two years with you, the lawyer has done well” – Interface Manager at a top Nigerian law firm
One metric used by the firm to determine if there is a need for a lateral hire, she said, is manpower planning. Manpower planning ascertains if the personnel structure in place is still able to hold, in terms of consolidations driven by client demands, and identifies the staff in each practice area. This manpower planning helps the firm analyze its current capacity and utilization of lawyers, and to track lawyer census statistics and evaluate existing metrics (e.g., number of partners, associates, leverage, diversity, and capacity and utilization at practice group and office levels) before approaching the open market and beginning the recruitment process. “This is a vital component because you do not want to find yourself with an overabundance of new lawyer hires, if the immediate needs are short-term in nature”.
“We have seen a rise in the number of law firms making lateral hires. Other notable factors behind these lateral hires are expanding business opportunities, new offices in specific geographic markets, lawyer turnover, and newly developed (or expanding) practice groups.
Also, because there is a talent war for mid-level or senior associates right now, top law firms are constantly reviewing associate salaries. The effect of this, coupled with the Japa syndrome (relocation abroad) is that the market is volatile and fast-moving.”
To retain or obtain the best associates at all levels, she recommends the following,
● Aim to meet the expectations of these lateral hires – A lot of firms do not know this for a fact, that when you hire people, as much as you have certain expectations of them, they also have expectations of the employers. Therefore, as an employer, you will need to know the expectations of the people you are hiring so that when they get on board you also meet their expectations.
● Flexibility at work – Aim to improve the flexibility culture, at the firm, in regards to resumption time, dress code and work-life balance. “Interestingly, our firm had a hybrid work structure even before Covid happened.”
● Give platforms for expression – Create an enabling environment where you can find young lawyers taking up speaking engagements and taking meetings with clients, depending on displayed brilliance. “We do not restrict our firm’s representation to the partners. This keeps the firm attractive to mid-level and senior associates who are looking to change firms.”
● Culture of recognition – Accolades for successful transactions should not be subsumed under a partner. Be intentional in perpetuating a culture where everyone involved is recognized and applauded.
● Commensurate remuneration – Increasingly, people need a higher purchasing power. “At my firm, there is a periodic review of salary to reflect the demands of the times.”
● Performance Incentive – Reward employees for the extras they bring on board. “At my firm, there is a very unique performance management appraisal system which is clear, very objective, and not subject to any partner’s reactions.”
Conclusion
The law firm-lawyer relationship is one of symbiotic consideration. In exchange for a lawyer’s efforts, skills, and discretionary contributions, the law firm provides money, benefits, and platform. On the surface, this relationship has a voluntary nature, however, lawyers still have more immediate financial needs and less slack than law firms. Hence, the need to constantly seek for better opportunities.
Consequently, it is advised that law firms who have been targeted by lateral hirers should seek to build symmetrical relational and ideological employment relationships with their associates. If it is not practical to build such relationships with all associates, they might consider building such relationships with key associates in pivotal positions within their firm.
Finally, lateral-hirers should carefully scrutinize charges of data privacy violation associated with their attempts to identify, contact, and offer employment to associates of other law firms. These hires should be done in accordance with expected ethical standards and relevant data protection laws.
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