With the legal profession becoming increasingly involved in the provision of investment advice in-house, law firms are faced with the challenge of recruiting technically qualified and culturally compatible financial advisers.
Experience has shown that finding the right person can prove more time consuming and traumatic for law firms than any other aspect of the development of an in-house financial services capability.
Recruiting financial services professionals for legal practices is a two-way street:
the practice must be confident that potential recruits can fulfil the role it envisages and work to the high professional standard it requires;
the potential employees must feel that they can achieve a level of success which meets with their career aspirations.
Recruitment always involves an element of risk. For example, the employer risks hiring the "wrong" employee, and conversely the employee could join the "wrong" employer.
In extreme cases, taking on an unsuitable employee could tarnish a practice's reputation and lose valuable client goodwill and business. For the employee, accepting an unsuitable post could cause great personal trauma. Minimising this risk requires a high degree of preparation, planning and communication by both parties.
Once a law firm is committed to providing financial services advice and has a business plan which identifies the need for an in-house investment professional, it needs to determine the key recruitment criteria. Naturally, the practice will want someone with professional qualifications in the relevant investment area.
Key points to consider when appraising a potential recruit include:
the adviser's ability to empathise with, and professionally service, the client base as an integral part of the practice;
the adviser's ability to accept and act upon the different demands involved in providing investment advice in a generally fee-based environment.
The risk of cultural mis-match can be avoided by recruiting financial services advisers from similar professional backgrounds.
In the past many firms have assumed that a retired bank or building society manager would possess the necessary attributes. However, this is seldom the case as most have limited knowledge of the technical aspects of financial services, and/or lack the appropriate aptitudes. The Independent Financial Adviser (IFA) community is a more common source of recruits.
Many small IFAs are happy to become part of a law firm with potential access to a high net worth client base, relinquishing the burden of direct regulation and the need to continually hunt for new clients.
Firms which have recruited accountants are often pleased to find that they are well received as fellow professionals by the legal fee earners. Another bonus is that the firms effectively become multi-disciplinary practices, able to serve clients' varied and interrelated requirements for high-quality professional advice. Some firms with established financial services departments are even considering newly-qualifying trainee solicitors as potential financial services specialists.
It is important for firms to understand the objectives and concerns of potential recruits. This will help to identify the most suitable individual and will also help reveal areas of incompatibility. Not all candidates' concerns will be commercial, with many specifically seeking a professional legal working environment which is compatible with their own methods of working.
Often the opportunities available in a firm may not be completely understood by a prospective financial services employee. So, to ensure the right type of candidate is attracted, the practice needs to communicate a clear commitment to financial services and demonstrate an appropriate level of resourcing and acceptable direct client access.
Another area of concern for both parties is an appropriate remuneration package. Firms are keen, as is the Law Society, to actively promote salary packages which include a bonus element.
Such packages mirror an industry-wide trend which ensures that advisers have stable earnings and is designed to protect against inappropriate business being taken on to meet pressing financial commitments. But it must be remembered that these salary packages must be competitive as they are up against those on offer through other recruitment opportunities outside law firms.
With clear objectives, commitment and a grasp of the unique features of the recruitment opportunity on offer, law firms can recruit financial services specialists who have suitable technical capability and cultural requirements.
In an increasingly professional financial services marketplace, firms will have a greater opportunity to choose from a larger pool of appropriate candidates and will directly benefit from the higher standards afforded by their own management programmes.