I’ll give you a quick example as to how it has affected our business, Ten Percent Legal Recruitment. Ten Percent Legal Recruitment offers the lowest recruitment fees in the UK for the recruitment of permanent and temporary lawyers with law firms, in house departments and local authorities.
We have been charging 15 percent fees for many years now without any increases according to the salary or type of post.
Our competitors start their fees at 18 percent and they go up to anything around 35 percent.
Since the recession has kicked in, we have been getting requests from firms to lower our fees, which is fairly rare for us as our clients are usually very aware that we offer the lowest fees in the legal job market and that there is very little room for us to manoeuvre below this level.
However, quite a number of our competitors are struggling severely and have started to look at ways to cut their fees. Fairly large firms are indicating to us that they have been offered fees at 11 percent and 12 percent by our competitors who are effectively dropping their prices by at least 50 percent.
It has always been commonly accepted in the recruitment consultant world that you do not drop your fees under any circumstances as there is never a reason to do so – if a firm wants a quality candidate from you, they’ll take them regardless of your fee - certainly we would be happy to pay a recruitment agency fee if the candidate was going to generate fees for our company.
So how do we cope with this when a firm may have ten CVs to look at and although ours may be the preferred option, they may decide that the extra expenditure is simply not worth it and go for someone less qualified or less suitable for the post on the basis they are cheaper.
The answer is quite simple. We always start our negotiations by explaining that in order to give something, we have to get something in return and for us as recruiters what is important is ongoing business. A one off placement is great in terms of cash flow, but it usually does not assist the firm or ourselves in the longer term to build a relationship if we are simply placing a candidate and walking away. One of the visions of Ten-Percent Legal Recruitment is to have long term relationships with clients, and we have these already, with clients and candidates remaining with us for many years.
What we would rather do is to not charge the client at all for the candidate but instead offer an Master Vendor Relationship.
This basically entails a firm handing over their complete recruitment and HR operations to us and us managing the department externally for them. Although we do not do the weekly tasks of payroll or holiday entitlements, we can assist with all the recruitment process from the sifting of CVs through to interviews and negotiations and on to contracts, references and start date.
We can also help out with external disciplinary issues as required and give management consultancy advice where necessary.
This means that we have an ongoing relationship with the firm and handle all their enquiries relating to recruitment as well, so they do not need to be concerned about a bombardment from other recruitment agencies or direct applications from candidates.
All of this means that instead of paying us a one off fee, the firm pay us on a monthly basis for a minimum contract of 12 months. During this time we may well introduce four candidates to them and only get paid the equivalent of one and a half to two, but in the same time, we will have also benefited longer term from a close relationship with that firm and be able to recognise their needs quite easily. For us as recruiters it means that candidates will come to us for other vacancies as they can see that we are credible and secondly, we get the benefit of speaking to all that law firms’ recruitment traffic and if you are able to introduce unsuccessful candidates elsewhere, then this can only benefit our company.
This is but one example of a way of being flexible in the current recession and although our prices are not competitive with the agencies who are so desperate for work they are reducing their fees by half, they still offer firms a very good deal in the medium to long term as they get candidates free of charge from us as soon as we have introduced one or two lawyers to them.
I have read of plenty of examples in other industries doing similar things and it is clear that this is one of the major ways to keep your business going during the recession when some of the more conventional ways of generating income are disappearing.
Jonathan Fagan is Managing Director of Ten Percent Legal Recruitment and can be contacted for press comment and careers advice at email@example.com or telephone 0207 127 4343. Ten Percent Legal Recruitment are expert recruiters for lawyers and have been operating since 2000 with over 5,500 solicitors registered to date. Visit our website at www.ten-percent.co.uk for further details.