Wall Street law firm turns ex-lawyers into bounty hunters to ease talent crunch

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REUTERS/Yuriko Nakao

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  • Shearman & Sterling said it will pay alumni of the firm up to $25,000 for successful hiring referrals

(Reuters) - With many U.S. law firms straining to meet client demand, one Wall Street firm is deputizing its own former lawyers as paid recruiters, offering bonuses of up to $25,000 for referrals that lead to new hires.

Shearman & Sterling said Thursday that it will pay former lawyers and staff $25,000 for a successful placement of associates or counsel with at least one year of experience, $2,500 for salaried business services professionals, and $1,000 for hourly staff.

Referrers can also ask the firm to donate that money to a selection of pre-approved charities focused on causes such as environmental conservation and civil and human rights.

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Major law firms have been locked in a battle to recruit and retain lawyers amid demand for litigators and a historic M&A boom that surpassed $5 trillion in global deals last year. Many large firms in 2021 showered associates with pay raises and bonuses, and on Thursday, another Wall Street firm, Milbank, said it was raising salaries once again.

With competition so fierce, Geline Midouin, Shearman's chief people officer, said veterans of the firm can be its most effective recruiters since they know it from the inside.

"They're our best ambassadors," she said, adding the firm would rather reward them than rely solely on professional recruiters. “Many times when you do use vendors you have to teach them about your culture," Midouin said.

Typically, law firms pay outside recruiters about 25% of a candidate's first-year base salary for a successful placement, though high demand has lately pushed that up to 30% to 50%, according to Stephanie Ruiter, a director at legal recruiter Lateral Link.

Ruiter said she was unaware if there are specific firms paying alumni for referrals, but it would not surprise her if there are.

Shearman & Sterling last summer hiked pay for first-year associates from $190,000 to $205,000. The firm also offered two-installment “special” bonuses last year, plus market-matching year-end bonuses.

The firm’s website currently lists 67 open positions, including 29 legal jobs and 38 openings for business services professionals.

Read more:

To stem lawyer attrition, law firms must look beyond cash - report

The legal talent war that broke out in 2021 shows no sign of slowing down

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Xiumei Dong covers legal industry news, with a focus on law firm strategy and growth, in-house counsel and the Washington, D.C., legal market. Reach her at Xiumei.Dong@thomsonreuters.com.