Interview transcript of Julia Shapiro, “How Hiring an Esquire is Revolutionizing Hiring for Contract Attorneys”, by Alan Olsen, Host of the American Dreams Show:
Alan Olsen: Can you share a little about your background?
I was and am an attorney and I practiced at a large commercial litigation firm. I went pretty much straight from college to law school and I loved being a lawyer. My parents actually didn’t want me to be a lawyer, all of their friends that were lawyers were miserable, but I really wanted to do it. I really enjoyed practicing a lot and I never thought that I would be an entrepreneur
. I didn’t plan on starting a company. My goal was to work for five to ten years, save up some money and do civil rights work. So I was supposed to be working for the ACLU right now, which is actually a lot more competitive than working for a large firm, instead I saw the legal market changing and after working as an attorney and seeing the need for new solutions for the new economy, I got an idea and I started Hire an Esquire.
Alan Olsen: Why do many law school graduates end up miserable?
Julia Shapiro: Speaking as someone who was discouraged from going to law school, I noticed that a lot of people were there for one of three reasons. One, family expectations. There was family pressure to go to a professional school. Two, people thought it was what they were supposed to be doing and they thought it was a career choice that was safe with guaranteed financial stability. Three, there are people there who really enjoyed law and politics and loved writing. All of those things are very present when you get into law school, but that’s not what you’re actually doing when you’re practicing law. I think a lot of people come into law school for the wrong reason and that’s why they’re not happy when they come out.
Alan Olsen: Some recent graduates come out and take jobs at large law firms that impose a high number work week hours on their employees. Was that your experience?
Julia Shapiro: My experience was slightly different. I ended up getting sick at the end of law school. I’d been an associate at a large firm and then I ended up taking an alternative career path because my health wasn’t good. I ended up turning down a federal clerkship and going into the contract world which is how I ended up at Pepper Hamilton. Eventually I was diagnosed with celiac disease, which means you just can’t eat gluten. It’s an autoimmune reaction to gluten so it’s actually like the best thing to be wrong with someone because you just stop eating gluten and you’re fine. By the time that happened, I had found my way into a semi-permanent role in a contract capacity at Pepper and I didn’t want to go back because I saw all my friends who were working at big firms were facing exactly what you are what you were describing. They weren’t very happy and working in law wasn’t what they had thought it was going to be. I actually really enjoyed being a contract attorney and working for 40-50 hours a week versus 80 or 90.
Alan Olsen: Are the differences between contract attorneys vs traditional law jobs mainly the number of hours you work in a week?
Julia Shapiro: The contract attorney is changing dramatically and means something different than it did just five years ago. Everyone in the new economy is basically a contract employee. The average length of a job for an attorney that has started in the last 5 years is less than 3 years. Often you will be on a contract assignment longer than if you were a full-time employee somewhere. There are a lot of different types of contractors, but in enterprise law firms, in-house legal departments and legal service companies, these contractors are often on the payroll of a 3rd party staffing agency or a company like ours that acts as the employer of record and there’s no expectation of long term work, but there’s more freedom for the contractor to determine the types of projects and the hour requirements they take on.
Alan Olsen: I imagine there’s a big draw to the flexibility in choosing what you want to do.
Julia Shapiro: There is and it’s just the way the market has changed. One in five legal payroll dollars are contingent talent. The old partner track is changing. There aren’t even that many positions left on the partner track. More law firms are building alternative tracks. That way of working doesn’t fit in with the new economy. Law firms have huge volatile business cycles or huge swings in their business cycles. So they might have a huge case, they might bid on work and get an RF, they might respond to an RFP for a project and suddenly need a bunch of lawyers and then six months or a year later they don’t need as many lawyers and they don’t want to be laying people off and they can’t support all of that overhead so it’s not necessarily a draw of people wanting flexibility. It’s the way the market has changed. I think more lawyers would probably prefer to be full-time but that option doesn’t exist the way that it used to.
Alan Olsen: Typically when entrepreneurs start companies, they are trying to address a specific problem. What problem were you trying to address?
Julia Shapiro: There were multiple problems that I saw from different angles of the market. At Pepper I was involved in helping with some of the staffing. I knew a lot of the contract attorneys, the projects would shift so we would often work with the paralegals that were coordinating the sharing of information. I realized that staffing agencies had not changed since mid-century. My mother had been a Kelly girl in the summers between college where they hired secretaries to type 60 words a minute. (In 2009) I talked with her about the staffing process for secretaries and found that attorney staffing agencies were using the same process that had been used to staff secretaries in the 1970’s. Initially I went to look for a company like Hire and Esquire, just to make life easier and to tell Pepper to use it. Even though often our recruiters at the staffing agencies were really great and really nice with good intentions, they could not provide the human touch that was necessary to staff large projects and manage multiple relationships, so the process of a staffing agency that was very manual- didn’t serve the clients well, it didn’t serve the law firms well and it didn’t serve the contractors well at all. They often felt fairly dehumanized because they were never contacted or communicated with because the recruiter was trying to communicate and hold relationships with hundreds of people at a time so it didn’t work very well. At the same time I had a lot of friends who didn’t have an easy time getting jobs and they were piecing together work through things like Craigslist legal jobs. They were working for small boutique firms and then I saw people that I knew who had been associates for a few years or were looking for something more flexible and they were trying to also do flexible contract work. Everybody was having trouble with things like getting paid when they were working for smaller firms and boutiques and practices and they were also having trouble finding work and they were spending more time trying to get the payment for the work they did than they had actually were getting paid for.
Alan Olsen: Working on a big contingent case you don’t get paid till the end while maintaining keeping cash flow seems to be a big problem in the law profession. How does the contract work play into this?
Julia Shapiro: Law firms often will push off the cost to a staffing agency, so the staffing agency will float the payroll while they’re waiting for their clients pay them and law firms have their own issues with client billing. Sometimes they bill their client 6 months later and that’s one issue. You have things like plaintiffs, firms that are working on contingency where they get paid if they win and they often tend to be the more entrepreneurial and scrappy, or law firms that will look into things like financing and funding. One way we did help to solve this problem especially for smaller law firms is our platform takes credit cards so they can get a 30-day float for their case contingent workers and just their cash flow and running their practice so it creates solutions.
Alan Olsen: How does Hire an Esquire go about staffing projects?
Julia Shapiro: Since we’re a platform marketplace business we can very easily pull all the data in our system and see what positions people are posting for. The top areas are corporate transactional, litigation and real estate. There’s a long tail of positions after that but those are three of the hottest areas for us. In our network about 20% of our attorneys have backgrounds in the AM Law 200, those are the top 200 law firms by revenue and the fortune 500. A lot of the clients are we work with are AM Law 200, with fortune 500 clients and then our fastest-growing market segment is those law firms of one to forty people in emerging legal departments, the first couple of attorneys in the door that are building out their department.
Alan Olsen: How big are you today?
Julia Shapiro: On our contractor side we have about 2,000 legal professionals, the majority of those are attorneys. We recently started offering paralegals and other paraprofessionals to the legal profession from demand and actually that’s about we have about 2% of the active US attorney population on our platform. On our client side we have over a thousand clients and that is spread between law firms, in-house legal departments and legal service companies. We are purely staffing, so we don’t work with a company that does not have a legal department. We’re approaching almost 1% of US law firms on our platform as well.
Alan Olsen: Are you concentrated in a particular geographic region?
Julia Shapiro: There’s definitely a concentration along the coasts and in major cities. One of the favorite things of our of all of our clients is geographic arbitrage. We have partners and law firms in New York and legal departments in New York and San Francisco and they’re working with people who are working in lower cost markets and often people who have big law backgrounds end up moving to the middle of the country or lower cost cities for a variety of reasons. Sometimes just wanting not to have the stress of paying high rent. More than twice the jobs in our system are remote compared to on-site. We do have a lot of remote work and we do definitely have a distributed network, although the concentration is in major cities, major metros and the coasts.
Alan Olsen: How do people find you?
Julia Shapiro: We do the traditional job boards to get contractors into our system but we also use social media, we use paid advertising and people read about us and hear about us different places. We get a lot of referrals and that’s a great thing about a network like ours and the model we have- anyone can find us. In the middle of the night whenever they need to, they can sign up. We do have a short verification and vetting process that’s part automated, part human to get people into the system. We do full verification of both clients and attorneys and then once they’re in the system they don’t need to wait for a recruiter, they can just interact and sign up and talk to one another and make placements at their convenience.
Alan Olsen: Do you ever find quality control to be a problem?
Julia Shapiro: We find that to be an advantage to us. Over the years we’ve developed a four-step onboarding process for attorneys and part of our recruiting team is a behavioral psychologist. In addition to the first step is just verifying that the person is an attorney or legal professional, that their license is in good standing, that their standing is good, there’s no disciplinary history, basic background things and their identity. That’s level one, no one gets into our system without that. Then we use something called psychometrics, if you’re familiar with Moneyball in sports, it’s a very similar thing for the workplace. And our behavioral psychologist, Eric Fox actually studied under the professors but did a lot of the Moneyball work within major league sports. You can actually predict workplace performance or the best predictor of workplace performance is by assessing certain traits in people that we know more informally as soft skills. We do a soft skill assessment of our contractors and we triangulate data from different sources, so one source we have reference surveys that are asking people they’ve worked with usually direct supervisors, standardized questions about their work style, it’s not good or bad it’s how they perform in different situations. We have the candidates do their own assessment of how they perceive themselves and how they see think they handle certain situations and then we add in a structured behavioral interview which is also found to be much more effective than unstructured interviews and again you’re not asking good or bad questions, you’re looking for different responses and reactions. All of those are put together to give us an assessment of the candidates and then when somebody posts the job. We’ve not only catalogued what traits are most important to succeeding in that job, also we ask the person posting the job about the work environment so then an attorney is matched with a fit score according to those questions and so being vetted actually becomes one of our strong suits and we do things in a much more scientific data-driven fashion than any other staffing company.
Alan Olsen: What is the average length of an engagement with the law firm?
Julia Shapiro: It usually ends up being three to six months, but it’s very skewed because we have some of our smaller firm clients and even some of our larger firm clients. They will need an attorney for local counsel in a weird jurisdiction or there will be a one-off project they need expertise in, something they don’t have on staff and now one thing I love that’s happening in our network is we have mentors, so younger attorneys who have set up practices and need help and guidance and expertise will post for mentor attorneys, and those do tend to actually be longer relationships. But my point is that we do have these opt in one-time projects where you’re not going to need an attorney with the skill set again so we’ll have one time and then we have some contractors who have worked through the same clients for on our system for two to three years and we have some smaller firms actually building their practice off of our platform in today’s world when we’re trying to do the hiring.
Alan Olsen: Can you give some insight of what you do when you’re looking at hiring an attorney?
Julia Shapiro: We didn’t plan on doing this when we started the company but we saw the need and that our business would do best if of course our clients were as happy as possible and the candidates for the best fit. What we learned when we delve into their research was that current hiring practices are abysmal at predicting success. You’re be better off flipping a coin, the average person in an interviewing position makes their decision within the first 10 seconds. As soon as the person says hello they decides whether they want to hire them or not and they spend the rest of the interview confirming those biases. So part of our recruiting team as of over two and a half years ago when we started developing these is a behavioral psychologist who worked with the professors that did Moneyball for major league sports Eric Box, and we have put together a process based on 85 years of industrial organizational psychology research on predicting replaced performance. Our assessment process is build out according to that and we’ve now been developing these for over two and a half years we’ve stress tested them through our own platform because we’ve also combined our own legal industry research and all of our clients success metrics have doubled since we’ve implemented these assessments and in the past our clients were often searching and finding attorneys on their own in our platform and with these assessments we do automated matching. 66% of our placements are now made through automated matching so we found that when clients rely on our system and our metrics to make their hiring decisions, it’s twice as effective compared to when they use their instincts and their gut.
Alan Olsen: How did you come up with the concept of the vetting and the screening using the technology?
Julia Shapiro: We were always technology first. The whole idea of Hire An Esquire was taking the staffing process and rebuilding it with technology for the way the modern era works, where everything needed to be dynamic, everything needed to be fast so with that we always were looking at the best way to match and we were doing what a lot of other marketplaces do. We were looking at tags and experience levels and all of those basic metrics which we still use but then we realized that what really was make-or-break for success and what really made our clients happy was when people had those right soft skills and we all intuitively know those soft skills are really important and then when you look at the research behind industrial organizational psychology and workplace performance, you find that one those traits really do predict success and two there is a way to quantify and measure them and people have been working on this for close to a century so you can then take that research and those quantities and how they’ve quantified those traits and you can put them into a technology product.
Alan Olsen: When you have a new client, how do you make sure you have the right fit for what you’re trying to do in your deliverables?
Julia Shapiro: After they’re vetted as a proper client for the system, we have them fill out a job posting form and it asks both about the hard requirements of the job and are there soft skills that are associated with certain job types. For instance somebody who is a very good litigator is going to have different soft skills than someone who is a very good deal attorney. So there are some soft skills that are matched by our system based on the job role and then we ask them about the work environment so they ask questions we ask them questions about the work environment in their specific firm because even work environment can vary by hiring manager and then we match those soft skills accordingly.
Alan Olsen: How would an individual go about finding you?
Julia Shapiro: They can go to our website, HireAnEsquire.com and we’re also on social media on just about every platform. Our handle is @HireAnEsquire
Edited for Concision and Clarity
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This transcript was generated by software and may not accurately reflect exactly what was said.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio