Congratulations to one of my favorite General Counsel, Jeffrey Carr. Jeff pioneered incentive-based law firm engagements, and much more, during his tenure with FMC Technologies. Jeff advocated for changes in how legal services are delivered via his writing, and through prominent roles with InsideCounsel’s Superconference and The General Counsel Forum. Jeff returned to the arena on May 11 as the new General Counsel of Univar (NYSE: UNVR), a global chemical distributor.
Jeff’s return to the in-house community brings back fond memories of 2011, when our firm placed three attorneys with FMC Technologies. Jeff and I worked out search fee terms with three components: a modest retainer, a set fixed fee for making a placement and a discretionary bonus based on client satisfaction with our overall service. The agreement aligned our interests, and none of it was based on the compensation of the attorneys we placed. The work was so rewarding, it inspired this column for InsideCounsel on the merits of a new pricing structure for recruiting.
Now, please guess how many times Evers Legal has been engaged since 2011 under this alternative fee structure. Your wise guess of zero is correct. It turns out that I am not Jerry McGuire. I am just a recruiter who really enjoys handling good searches. And that means continually adapting to how our clients want to do business. In 2011, I was making the case for using an outside recruiter instead of your internal recruiters.
Six years later, I have learned how to work with your internal recruiters. Thanks in large part to LinkedIn, good internal recruiters can take a DIY-approach and source attorney candidates. In many cases, they are mandated to do so, and law departments at some companies are restricted from even contacting outside recruiters.
Thankfully for outside recruiters, not all searches are equal, and internal recruiters occasionally hit walls and need our expertise. Instead of bashing HR and trying to get work directly from GCs, I have spent an enormous amount of time meeting with and getting to know the challenges faced by internal recruiters. At many companies, they decide when it’s time to bring in a search firm, and which one they should use. You can teach a dinosaur new tricks, and this one has finally learned how to play nice in the corporate sandbox!
And this brings me back to the title of this issue’s column about our pricing model. It will always adapt to how clients want to engage us. In 2017, clients are engaging us to supplement their direct posting efforts. We are charging a nonrefundable $9,000 retainer to work with the internal HR recruiters who are engaging us. This retainer is then applied to a traditional percentage of salary contingency fee if a client hires a candidate our firm supplies.
The modest retainer is a critical piece of the engagement. It creates a serious partnership with HR. We collaborate, talk about process, share information, and work toward the singular goal of building a strong diverse candidate pool. Obviously, I am happiest when one of our candidates gets hired and we collect a much larger fee. But it has gone in the other direction as well. The important part of the equation: the client found value in the engagement and returned for another search under the same terms.
So, here is my bottom-line for clients and prospective clients: We enjoy handling good, interesting searches. We like the work and know we add value. I have also come to realize that I am not a pricing pioneer. I am a chameleon, and I will change my pricing colors to match how companies want to do business. Six years from now, our common engagement terms may look nothing like today’s engagement terms. Fixed fees, alternative fees, success fees… as long as the terms are fair to both parties, count us in.