Brain Drain: Dutch Law Firms are Facing Unprecedented Staff Shortages as Lawyers Go In-House

Onderstaand interview verscheen op 4 augustus jl. op de website van law.com

Artikel LawMore and more mid-level lawyers in the Netherlands are giving Big Law the cold shoulder and choosing to go in-house at fintechs and scale-ups.

Dutch law firms are struggling to attract and retain senior associates in a talent crisis that few expect to be resolved any time soon.

The unprecedented staffing shortage is the result of stiffer competition from traditional and new corners, and a mismatch between the demands of Big Law and millennial career expectations, with both trends accelerated by the pandemic.

Legal recruiters and senior lawyers described the situation as “urgent” in interviews with Law.com International. Two to three months now tend to go by before a mid-level position can be filled, as opposed to the 30 days this used to take two to three years ago.

 

This has left most law firms hugely understaffed, with around 3,100 vacancies open at the moment according to analysis from Robert Walters. Senior associates specialized in privacy, M&A and fintech are especially in high demand.

“Attracting mid-levels is indeed very difficult,” said the Amsterdam-based Benelux chief operating officer of an international law firm. “And it’s proven more difficult even in the past, say, year and a half when everybody [has been] remote.”

The crisis is affecting all large Dutch firms, recruiters say. “It doesn’t matter whether you are a top-10 or a top-60 firm, this is happening across the board,” said Joyce Toeset, senior manager legal division at Robert Walters.

Christ’l Dullaert, co-founder of the legal temping agency Le Tableau, pointed out that it’s long been difficult for major law firms to hire and retain senior associates.

Senior associates might rethink working for law firms after three of four years on the job because they want to start a family; they want more adventure; they want to have more structured work days; or they dread the responsibility associated with partnership, she said. “It’s a whole series of reasons [why] you have shifts in the mid-level, but that’s always been the case.”

But the pandemic, Dullaert and several others interviewed said, appears to have intensified this stock-taking moment, as stay-at-home orders offered mid-level lawyers the space and quiet to reflect on what they really want from their jobs.

The pandemic-induced shift to remote working also has made smaller, regional firms more attractive. The senior associates who work for the Amsterdam offices of large international and local firms often hail from other regions in the Netherlands, said an Amsterdam senior lawyer who worked at a several international law firms before starting his own firm.

“COVID made them realise they don’t have to live in Amsterdam,” he said. “So, there’s also stiff competition from regional firms and that’s actually quite new.”

Finally, the pandemic resulted in many companies freezing their hiring. With the economy back in full swing, many companies are now playing catch-up and trying to fill their in-house vacancies for legal professionals, Toeset said. And the siren call of the tech startups, crypto companies, gaming studios and also Netflix EMEA headquarters that Amsterdam is home to, is proving difficult to resist for the current generation of senior associates.

“[Mid-level lawyers] go for, let’s call them, the ‘sexy’ jobs,” the law firm founder explained. “They go for the brand name; for something that’s new, that’s technology-driven, that’s exciting and doesn’t require them to work 100 hours a week. That’s new competition for the larger law firms.”

Because it’s taking longer and longer to find replacements for the fourth- and fifth-year associates who leave their firms, their former colleagues also have to do overtime for longer stretches of time, creating what Toeset described as a snowball effect. “They get even more work, even more stress and that’s also why the people who stay behind get tired of everything more quickly,” she said. “So, it’s a negative spiral for law firms.”

It’s why, for Toeset, law firms have no choice but to turn the tide. If the legal profession does not revise its pyramid hierarchy, “up or out” model, and emphasis on billable hours and deep specialization, it will remain difficult to hire and retain senior associates for the foreseeable future. “But I’m confident that the legal profession will reinvent itself. Some law firms are already doing this,” she said, adding that one of her clients had invested time and money into establishing a committee to identify and address the concerns of younger lawyers.

Others think the solution is to do more with less. “This finally now also puts pressure on law firms to be more efficient,” said the Amsterdam-based COO. He pointed out that law firms would have no choice but to embrace legal intelligence and document automation, and streamline their processes to make efficiency gains.

“That’s the only way to really tackle this problem. You can’t just throw another 50 bodies at this and think [the situation] will change because you will grow the business and at the end of the day, you’ll face the same issues when you make the next step in your growth.”

Dullaert was the only one interviewed who did not see the staffing shortage an urgent problem. Pointing out that law firms had gotten much more used to working on a project basis and hiring temp lawyers, she said: “They will figure this out.”

Others were more pessimistic. “I can’t really see a solution short-term, to be honest,” the law firm founder said. The Dutch office of Allen & Overy, he said, had been struggling for months now to hire several mid-level associates to build their privacy team. “They pay the highest salary in the market; they’ve got the best name in the market but, still, they haven’t got anyone,” he said.

Christ'l Dullaert

Christ'l Dullaert

Christ'l is Partner van Le Tableau BV, meer dan 15 jaar gespecialiseerd in tijdelijke plaatsingen van advocaten en kandidaat-notarissen.

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