The Counteroffer Conundrum: Win Legal Client Value Talent in a Competitive Market

In the US, counteroffers present a significant challenge to recruitment, especially for client value roles in Pricing and LPM. Short notice periods make it challenging for companies to quickly recruit replacements. So, many businesses resort to temporary solutions, such as salary increases or newly-created job titles, to avoid the lengthy hiring process, up to three months, to fill vacancies. Some areas, particularly in large metropolitan areas and tech-focused regions like Silicon Valley, are seeing salary increases of up to 30% to secure professionals in the legal market.   

While the recruitment market for all legal talent is highly competitive, this is particularly true for client value roles including Legal Pricing, Legal Project Management (LPM), Financial Planning and Analysis (FP&A), and Practice Group Management. The resulting cycle of offer and counteroffer presents a challenge for both law firms looking to retain employees and those trying to attract new talent. Effective offer management is key, alongside targeted approaches that put forward clear value propositions, competitive compensation, and opportunities for growth. 

In this article we’ll explore why counteroffers happen, what motivates legal client value professionals to move, and how global firms can pre-empt or mitigate their effects.

Why Counteroffers Are So Common in Today’s Legal Market

We’ve seen why counteroffers are so prevalent in the US. But companies with multiple international offices should bear in mind some regional differences. In countries like Germany where notice periods can be up to 12 months, or the 3 to 6 months common in the UK,  they tend to happen less frequently as companies have longer to find an ideal replacement. 

Despite these very different employment cultures, counteroffers are becoming more common globally.  In part, this has been driven by fierce competition for key skills. In the US there is high demand for client value talent to have expertise in intellectual property and technology law, while emerging markets like Southeast Asia and the Middle East are focused on attracting professionals who have international legal expertise to support growing economies.  

Understanding the Push and Pull Factors in Legal Recruitment

One of the biggest hurdles to attracting and retaining key talent is understanding the motivations behind candidates choosing to move roles. 

When recruiting for client value roles such as legal pricing and LPM, the push and pull factors are different to traditional legal roles. For these professionals, pressure from senior partners and an ‘always on’ culture can leave them feeling burnout and seeking better work-life balance elsewhere. The appeal of a role lies in the opportunities available to drive innovation, shape firm strategy, and access to cutting-edge technologies and methodologies. 

Attracting, and crucially, retaining talent, is about making sure employees feel they have a structured career path and opportunities for development. 

How to Mitigate the Impact of Counteroffers

For client value roles like legal pricing, and LPM, firms must take a proactive approach to attract talent. To appeal to these candidates, focus on:

• Demonstrating their Impact: Candidates are drawn to positions where they can lead transformation and directly impact profitability. Pricing experts seek to contribute to strategic decisions, while LPM professionals value advanced tools and frameworks that enable them to improve efficiencies and client outcomes. To attract and retain top talent, invest in creating a culture where people feel they're in the best place to grow and develop.  Use your hiring process to demonstrate your commitment to providing leadership opportunities and cutting-edge methodologies.
   
• Competitive Benefits Packages: While keeping compensation competitive is important, it’s not always about offering more money. In the US, where there is often more room for rate negotiation compared to elsewhere, firms need to balance competitive pay with flexibility in negotiations. Salary benchmarking ensures your offer is aligned with industry standards. Benefits matter. Flexible work arrangements and performance-based bonuses can make your package more appealing. Becoming more common in the US are incentives such as:
  o    Parental Leave 
  o    Profit Share Schemes 
  o    Increased Vacation Time  
  o    Extensive Healthcare Plans
   
• Develop Market Awareness and Relationships: Staying informed about legal market trends and competitor strategies can help you anticipate potential counteroffers. Regular market assessments provide insights into how other firms are attracting talent, allowing you to stay competitive. Proactive headhunting also plays a key role—building relationships with potential candidates early on can create loyalty and reduce the appeal of counteroffers from competitors. By engaging with legal talent before they actively start looking for new opportunities, you can secure top candidates without reactive bidding wars.

Retaining Legal Talent

Counteroffers are often made to avoid the hassle of replacing and retraining staff. But, relying on counteroffers alone masks deeper issues with talent retention. Many professionals who accept a counteroffer will go on to leave within six months. And as we’ve seen, those in client value roles are seeking more than money. 

To retain top talent in client value roles, firms must offer meaningful growth and recognition:

• Offering opportunities for professional development in emerging trends like alternative fee arrangements (AFAs) and recognising strategic contributions to client profitability.
   
• Involving professionals in duties beyond their defined job role, such as key client relationship management and project planning. Some firms are trialling roles that mix both LPM and pricing.
   
• Piloting new technologies, testing new workflows, and rewarding successful transformations of legal operations.

Be prepared to establish:

• Regular Employee Engagement: Conduct stay interviews to gauge employee satisfaction and identify potential retention risks early.
   
• Clear Career Progression: Offer mentorship programmes and leadership opportunities, crucial in structured markets where professionals value hierarchical advancement.
   
• Fair and Timely Compensation: Regular salary reviews that reflect performance and market conditions can reduce the need for employees to look elsewhere.

Ok, the counteroffer conundrum is not going to disappear overnight. But with careful planning, investment in employee satisfaction initiatives and building relationships with your recruiter and their pipeline of talent, you can position you and your firm in the best position to overcome it.

Boston Hale can help you develop comprehensive strategies that include competitive compensation, market awareness, and creating a culture that resonates with today’s legal client value professionals. Boston Hale specialises in helping organisations recruit for mid-senior level, interim, and permanent roles in legal business services. 

To discuss your requirements contact our team today.