Thought for the day –
How often are you asked to negotiate on your fees?
Does every client ask? One out of three? One out of ten? If so, how often do you agree? Have you lost business out of a reluctance to negotiate on your cost?
Have you ever completed a mediation, a transaction, a disposal or a separation and then have clients complain retrospectively about the bill that arrives on their doorstep or in their in-tray? If so, what have they based this complaint on?
If this is a common occurrence for lawyers it is twice as common amongst the legal recruitment market. In these current thrifty times firms are understandably trying to limit expenditure where possible including the fees paid to recruiters.
Before I go any further this is not a recruiter moaning about how you should pay our fees and not complain about it. Although that would be nice, if you don’t mind.
The purpose of the blog is for those occasions where you are either being asked to cut your fees or are asking your suppliers to cut theirs:- just how is it that you value the service you provide or are provided with?
Within the law every firm will wax lyrical about USPs, heightened levels of client care, rates of repeat business or even mention ‘No Win No Fee’ arrangements in an attempt to stand out from the crowd. As recruiters we also strive for an elevated position against the competition, although as with any business the main factor which sorts out the wheat from the chaff is our success.
So what is your perception of how your recruiter works for you? Do you value the recruiter who provides you with fifteen CVs for a role, with you then shortlisting four for interview, second interview two of these, invite one to a third interview to meet the team and then sign off the offer?
Alternatively what about the recruiter who provides you with one CV for a great candidate that you interview for 2 hours, who ticks all the boxes professionally and personally and who you then offer all within an afternoon? Both recruiters charge you the same fee, yet who has provided you with the better service?
As much as you may hate to admit it there is a tendency to expect some ‘pain’ for your money; if you’re going to pay £x for a piece of recruitment then you may want to feel that you have spoken to a range of individuals, albeit that most aren’t suitable, and then made your choice from the remainder.
However think about it this way. Let’s say that your interview process will be carried out by a partner and an associate who have a charge-out rate of £325/hour & £250/hour respectively. Take an hour to shortlist the CVs (partner only) and spend an hour in each interview at every stage, and the first recruiter has cost you £4,350 in lost billings on top of the fee.
The second one by way of contrast has cost you closer to £1300 in billings, hence a potential saving of around £3,000 compared to the first premarin price. Now again:- which recruiter gives you a better level of service?
Quite clearly the second has proven to be a more cost effective supplier. Of course you may feel that with the first recruiter you know that you have covered the market by seeing as many CVs as possible, but then you’re paying a considerable sum to your recruiter for their services; the good ones will have already filtered out the unsuitable ones for you.
Lawyers of course have experience of fee negotiation; the number of recorded hours very rarely tallies with the chargeable one! There is always a reluctance to pay for work unless there is tangible and definite proof of what the client is forking out for, and hence time spent proof-reading or undertaking the associated administrative tasks can often disappear into the background, just like time recruiters spend talking to unsuitable candidates, shortlisting & reformatting CVs and building comprehensive market information.
We have recently been working with a number of clients where our CVs submitted-to-interview-to-placement ratio has been exceptional by any standard. The recruitment has been slick and effective and the offers accepted with a minimal amount of fuss, and the candidates of such a calibre that one client has considered recruiting an additional person to avoid losing out on a potential star.
In business there is always negotiation, but when you can demonstrate that you save your client money whilst meeting or exceeding their expectations it puts you in a great position to justify your fee.