If your legal department is trying to fill in an open vacancy, it can choose one of two things: either, it can hire an employee internally (i.e. someone who already works for the company), or it can engage a lawyer or legal counsel from outside (a so-called ‘external hire’). Both options have their advantages and drawbacks. 

In this article, we provide you with an overview of the potential benefits and downsides of internal and external hiring for legal departments.

Hiring lawyers internally: rewarding loyalty, but creating competition

Pros of hiring legal counsels internally: lower costs and retaining talent

The first option your legal department has, is promoting someone from their own team. This can be an employee who has been working for the company for many years, but it’s equally possible to offer a permanent contract to a freelance legal consultant who has been advising your department on an interim basis. Lastly, you could even consider hiring an employee or consultant from another branch or department, if they meet the right qualifications.

Choosing this path obviously has different advantages. First of all, recruitment costs will be lower. Instead of setting up an entire campaign, you can create an internal job posting that only employees of your company or branch have access to. Usually, an internal recruitment process will also take less time than its external counterpart.

A third advantage is that employees will feel rewarded for their loyalty to your company. Promoting one of your team members proves that you value their contributions to your department, which might motivate other counsels to keep delivering the same high-quality advice to your branch. Additionally, hiring internally is a perfect instance of ‘reaping what you sow’. By starting off with an internal vacancy, you give yourself the opportunity to keep the talent that you raised within the business, instead of seeing great potential leave to other companies.

Lastly, internal vacancies have the benefit of familiarity. This goes two ways: on the one hand, you won’t have to do a thorough background check on the applicants, because the position is only open to people you already work with. You know their skills, have access to their performance records and you’re up-to-date on their history at the company, which leaves you with way more precise information to decide whether a candidate would be a good fit for the position they’re applying for.

On the other hand, all applicants are already familiar with your company’s culture and working methods, which means they will need less time to adjust to a new function than an outsider will.

Cons of internal legal hiring: jealousy and recreating a gap

It is only evident that internal job postings also have their downsides.

First of all, a new job opening might create an unhealthy competition and jealousy between the workers of your legal department. It is very likely that different employees will apply for the same position, but obviously, only one of them will get the promotion at the end of the day. Not everyone takes their losses gracefully, unfortunately, and such applicants might feel discouraged to keep working hard if they sense that they won’t receive any chance for a promotion within a reasonable amount of time. Maybe, they will even consider leaving your company to try their luck elsewhere.

Another problem is that, by hiring one of your own legal advisors, you immediately create a new vacancy, namely the previous position that your new hire was holding. This is like trying to fill a gap by digging a new hole; in essence, you’re just moving the problem from one place to another. 

Therefore, it is important to already have a solution in mind for this problem that will inevitably pose itself, for instance by planning beforehand how you’ll divide the extra workload between the remaining team members that didn’t get promoted or by already knowing who you’re going to employ to fill in the newly created gap.

Hiring lawyers externally: new talent comes at a price

Pro’s: new talent, fresh ideas

The second option your legal department has, is engaging someone from outside of the company. In this article, we’re primarily focusing on permanent contracts, but hiring an interim legal consultant might be a good temporary solution for businesses who experience difficulties in finding a new permanent employee.

A first advantage of an external hire is the input of fresh ideas. A new legal counsel will be able to transfer experiences, knowhow and working methods from their previous company to your legal department. This can only be an enrichment for your own employees and improve their creativity and quality of work. An external hire could even help organize seminars and events to teach their skills to other members of the legal team.

Secondly, external hiring is a way of broadening your scope. If you’re trying to fill in an open position, but only look for candidates within your own legal division or company, you might miss some great talent that’s out there on the market, waiting for a new opportunity to arise. Giving outsiders a chance to apply for your job openings helps you expand your team and create growth. The problem encountered previously with internal hiring, namely creating a new gap to fill, immediately becomes irrelevant when choosing an external applicant.

Lastly, the problem of unhealthy competition and jealousy between your own counsels also seems eliminated, since no-one on your legal team gets a shot at the job.

Cons: expensive hiring campaigns and time-consuming background checks and training programs

Naturally, the previous benefit could also be seen as a drawback. Since none of your internal legal advisors will get a chance to apply, they might feel insulted or discouraged because their work doesn’t seem valuable enough to their employer. Even if your legal department would combine the two methods of internal and external hiring, it remains possible that your own legal counsels won’t get picked, which can lead to discontent, quiet quitting and resignation.

Another problem with external hiring is the fact that your legal department will have to spend a lot of money and time on hiring campaigns. To make sure you won’t miss out on the perfect candidate, you’ll need to:

• Broaden your network;
• Organise online searches;
• Create job postings and ad campaigns for your open position(s);
• Conduct many interviews;
• Execute thorough checks on applicant’s professional backgrounds;
• Organise regular status meetings;
• Test the legal skills and knowledge of potential candidates;
• Determine whether an applicant would be a good fit in your legal team
• …

Last but not least, engaging someone from outside of your company also means you’ll spend a lot of time on training programs and onboarding periods to familiarise your new legal counsel with the company’s culture, structure and working methods. If the onboarding doesn’t run smoothly, it can have a negative impact on the rest of your collaboration.

Conclusion: finding a balance within the needs and preferences of your legal department

Both internal and external hiring have their own respective advantages and disadvantages. The method you should choose largely depends on the constellation of your own legal department. For instance: if you feel that the perfect candidate can be found within your legal team, and you can quickly find a solution for the work that will be left behind, internal hiring might be the way to go. If, on the other hand, you sense that none of your team members would be a good fit and a better candidate can be found somewhere else, external hiring might be your best shot.

In the end, it’s all about finding the right balance between the preferences and needs of your legal branch.

Of course, combining both methods is also an option, for example by promoting one of your internal lawyers and hiring an external legal counsel for the position that becomes available in doing so, or by accepting applications from both internal employees and external candidates for the same position. 

Be aware, though, that in this case not only the benefits, but the drawbacks of both routes will be combined too. Giving your own employees a chance to apply for a better position, but then choosing one of the external applicants, might lead to even more discontent and discouragement. On top of that, you’ll need to spend even more time on research, campaigns, interviews and everything else.

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