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‘They seemed like one of us’: Why relying on referral is a risk in legal recruitment

‘They seemed like one of us’: Why relying on referral is a risk in legal recruitment

Hiring staff, risk of referral

What are the risks of referral and how to do your due diligence when hiring staff? Lewis Matthews writes. 

Honestly, how did THEY get hired?  If this question is running through your mind, it will also probably be going through the minds of your clients. Smart business leaders know their staff are the foundation of their success, so when a relationship-driven business like a law firm has the wrong employees on board, it can have detrimental consequences.

The Australian legal industry is well connected, which is often a positive thing but it has created a risk when it comes to referral-based recruitment. The chance of a candidate entering a top-tier firm without some help from former colleagues is as likely as Legally Blonde being based on a true story. 

Often, a ‘referral’ recruitment system is based more on personal relationships than skills and experience, providing limited objectivity when it comes to a candidate’s expertise or suitability for a role. Without having confidence in this information, organisations not only lack the evidence they need to support a hiring decision but are limited in the knowledge that will help them manage the candidate when they become a staff member.

This approach also poses significant governance risks in an industry where due diligence is paramount. Law firms can’t afford to overlook a responsible auditing process during recruitment, when the repercussions could land both them and their clients in hot water.

The risks of referral

Given the sensitivity of the material lawyers deal with on a daily basis, the recruitment stakes are high, so getting the hiring decision right the first time is crucial. Reputation can make or break a firm’s success, and its employees are the foundation of that reputation.

Maintaining a high level of professional competence, confidentiality and conduct is essential, meaning that one poor hire not only puts the business at risk, but can affect other cultural aspects of the organisation and the productivity of staff.

Ensuring the right people are in the right roles is critical for an industry so bound by its integrity. And the reality is that the success of any one person’s legal career is rarely just in their own hands. Often, there will be at least one particularly well-connected referee that helps a legal professional get their foot in a few doors along the way, offering their job seeking ex-colleague the credibility required to land a role by utilising their network.

But employment by referral requires a high level of trust between the employer and the referee, and that’s where it can become unreliable. Personal biases may disguise the true nature of a candidate, and human error is a liability that no one wants to wear. The conflicts of interest that may result from unchecked referrals can lead to divergent interests and allegiances.

How to do due diligence, and do it well

Fulfilling due diligence across all elements of the recruitment process is key to ensuring candidates have the necessary qualifications and experience, and that they are the right cultural fit for the role. From selecting resumes through to tailoring interviews for specific role requirements, all touch points of the recruitment process should help hiring managers make informed, confident recruitment decisions.

Using accurate, impartial data to guide the recruitment process is the most reliable mechanism for legal firms to ensure they hire candidates they can count on. For example, an automated reference checking system will provide employers with accurate and defendable data about a candidate’s experience and background prior to hire, as opposed to anecdotal evidence collected over the phone, from a former colleague or perhaps even just an acquaintance who attended the same school as the candidate.

An automated reference checking system caters to the recruitment of all positions and levels, using tailored questionnaires, developed to investigate specific role requirements. This flexible system ensures that the appropriate checks and balances are run for the corresponding candidate position, and can be benchmarked across other candidates applying for the same role in the future.

This data-driven approach can be replicated across the recruitment process, using new technology-based solutions that remove the risk of human error or biased decision-making. These platforms offer law firms a robust approach that will ensure peace of mind, and deliver more valuable and reliable insights about a new recruit. Their flexibility also ensures they can adapt and grow in line with the firm they support, as its headcount increases or evolves, making them a future-proof investment for organisations that must keep up with the digital evolution in order to attract future legal talent.

Lewis Matthews has several years of experience working across multiple industries in recruitment and business development. At Xref, Lewis consults with organisations across the Asia-Pacific region on how best to streamline their reference checking process.

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