THE BATTLE to recruit top talent is driving an increasing number of law firms to offer “golden hello” bonuses to beat rival offers
THE BATTLE to recruit top talent is driving an increasing number of law firms to offer “golden hello” bonuses to beat rival offers.
While sign-on bonuses have been used by top-tier firms and members of the corporate sector for years, competition in the past year has forced even the mid tier to offer bonuses at all levels, including secretaries and partners.
The practice can see partners get bonuses of up to $20,000 when they sign a new contract after a lateral hire, and bonuses of $5,000 for some senior secretaries have been cited.
This is a new phenomenon for mid tier, and even smaller mid-tier firms, according to Elvira Naiman, director of legal recruitment firm Naiman Clarke.
“This is not offered to every candidate, but a large reason it is being utilised is because one firm may pay $75,000 [for a solicitor at a certain level], then you might have a firm which pays $65-70,000,” she said.
“So instead of upsetting the bandwidth of that particular level of PQE lawyer, so that they can match an offer from X firm, they say ‘we can give you an extra $5,000 in a sign-on bonus’. So they are getting around the issue of parity between the people they currently have by giving people a sign-on bonus.”
At Corrs Chambers Westgarth, sign-on bonuses have been around for upwards of ten years, national human resources manager Alexis Nabie said. But what is new, she argued, is the “amount and the reasons”.
Nabie said remuneration practices did not used to be as sophisticated as they are today, noting that today they are more competitive. But firms are being responsible in not just increasing salaries to beat their competition, and in some cases are offering sign-on bonuses and other incentives to top the opposition.
“Sign-on bonuses have probably replaced inequity in salary differentials,” she said.
While Corrs does not offer golden hellos for secretaries, there has been an increase in the number of offers it has made lawyers at all levels, Nabie said.
“You are talking some relatively hefty amounts, up to $50,000. We are talking about people who have perhaps come from overseas and are used to being paid in [sterling] pounds or in US dollars, or in cases where there is a serious undersupply in skills and you really, really have to have that person. But you have to have a particular skills set for such bonuses.”
Naiman agreed that firms use the sign-on bonus scheme on a needs basis. “Generally it’s been utilised for senior appointments only. However, in the past 12 months we have seen an increase in sign-on bonuses for juniors.
“As far as lawyers are concerned it tends to be between the $2,000 and $10,000 mark, depending on the seniority, depending on the skill set that the person is bringing to the table and depending on how desperate the firm is to bring on that person’s services,” Naiman said.
A number of firms interviewed denied having a policy of sign-on bonuses, noting that this was not something they had yet been forced to introduce. Naiman agreed that many firms will not have it as a policy, but may use it as a backup if forced to by competition for a particular candidate.
“In the past we have told a firm that a particular candidate is looking for a sign-on bonus. But the firm will say it doesn’t do it. Then the person will go through the interview process and the firm will realise there are four or five firms vying for that person’s attention. In that case, they might then offer a sign-on bonus,” she said.
Naiman noted that the bonus is a “sweetener” to make someone make the move. “In a lot of firms it’s not a policy, they will say it’s a one-off event for a particular candidate and as approved by the partnership at the time.”
This activity has also been noted in the in-house market, said Taylor Root manager Claire Courtney. “In the cases where we have seen golden hellos, it has been generally because it is a recognition that someone has had to sacrifice a bonus in order to make that move over.”
Rather than wait six months for a substantial bonus to be paid, with the added risk, some banks, for example, will pay a sign-on bonus in order to encourage the move sooner.
