New York Lawyer
May 14, 2002

Q:
What�s the typical starting salary and commission income for an entry-level legal headhunter or temporary/contract placement professional?

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A:
There may be as many different answers to this question as there are placement and recruiting firms. The bottom line answer is the classic lawyer's dodge: it depends.

On what? First of all, compensation will depend on whether you are going to be a hunter or a skinner. That is, is a major part of your role cultivating new clients and finding placement assignments? Or are you going to be the person who -- once an assignment has been landed by others -- sources candidates, does reference checks, performs preliminary interviews, and nudges the client to keep the process moving?

Most legal placement firms operate on contingency, meaning they don't get paid a dime unless/until a candidate they source actually lands the job. And they frequently aren't the only ones introducing candidates to that client firm or corporation; they don't have an exclusive on handling the whole search process (the way corporate "retainer" firms -- the classic "headhunters" -- do). Furthermore, in a number of placement firms, the process of finding qualified lawyers is delegated to lower-level "researchers," who then turn their leads list over to the consultants who actually interface with the client.

Both retainer and contingency firms typically charge clients about 35% of starting salary as their search fee. Temporary and project-placement firms typically take a certain percentage of the hourly fee the client pays, and this percentage is highly negotiable, but it probably averages $25-$35 for each hour billed. How much of that gets passed down to marketing, administrative and delivery personnel also varies widely. It's not unusual for "hunters" to take a relatively low monthly draw and make most of their money in commissions. Those who get low-balled might get a $2000-$3000 per month draw and take a 15% commission on the fees of placed candidates. Powerful marketers (who may have come into the firm with a solid network of contacts, leads or outright business on the hoof) have been known to take home 50% of placement fees. That can really add up.

Obviously, the commission is lower when you're less experienced and don't have much bargaining leverage. It's not unusual to see a "stepped" commission rate that escalates as one hits certain revenue generation milestones. Employees who work inside the firm on research and administrative tasks often are not eligible for non-discretionary earned commissions, and they must rely on the discretionary bonuses handed out annually by the Powers That Be. As a broad generalization, it's not unusual for fairly junior employees to take home $40,000 - $50,000 per year. Similarly, it's not unheard of for a seasoned, major league rainmaker to earn several hundred thousand dollars in base compensation, plus commissions.

One caveat, however: for the time being, the present economic climate has knocked hell out of the placement and recruiting businesses, both retainer and contingency. People just are not hiring as many full-time employees. The good news is that this trend has positively impacted the temp business, which is booming.

In any event, your best course of action is to network actively around your local marketplace and see if you can get a mole to reveal some hard-and-fast numbers for specific firms handling various kinds of searches and placements. That way you will neither price yourself out of contention nor leave some potential income sitting on the table.

Sincerely,
Douglas B. Richardson
President, The Richardson Group