Amid Unprecedented Talent Market, Referral Bonuses Make a Return
November 10, 2021
The Legal Intelligencer
Types : In the News
“This is one of the hottest lateral markets that I’ve seen in years, maybe the hottest lateral market since I’ve been an attorney,” Montgomery McCracken managing partner Steven Pachman said.
Financial incentives for attorneys who secure the employment of a former colleague for their current firm have come back into vogue in 2021 as firms seek a cost-effective method of onboarding laterals with preexisting work relationships.
Philadelphia-based Montgomery McCracken Walker & Rhoads plans to start financially rewarding lateral attorneys who help to bring on other lawyers from their previous firms. “If an existing employee has a friend at another firm and the existing employee convinces that friend to come over to our firm, they get a ‘referral bonus,’” managing partner Steven Pachman explained.
With the going rate for headhunter fees at around 25% of a candidate’s first-year base salary, law firms have found themselves paying out $50,000 each time they hire someone with a salary of $200,000, Pachman said. He declined to offer an estimate for how much referring lawyers could expect to receive under the firm’s referral bonus program.
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