Hiring is a challenge for just about every type of company: Small business, tech, Fortune 500, and the list goes on, and on, and on.
For you and your legal funding company, it can be even more challenging with additional hurdles to overcome, including:
- A limited talent pool: You operate in a growing, yet fledgling, industry, so there isn't a large talent group of candidates with domain experience or expertise to draw from.
- High turnover: Some roles that are most important to legal funding companies also lend themselves to high turnover, so you should always be at least passively hiring.
- Disproportionate impact: Most funding companies employ between 5-50 people, small enough where one bad apple can spoil the bunch (Linkedin).
Despite these challenges, hiring A-players is a massive competitive advantage for your funding company.
Not only does great hiring give you a leg up on your competition, it also saves you money. Payroll is where roughly 70% of your operating budget goes, so costly hiring mistakes add up quickly.
With that in mind, it's no surprise that top funders take their hiring process as seriously as their funding process. The first step: create scorecards.
Scroll to the bottom to find 3 free resources to help you successfully hire A+ employees.
Hiring Overview
In this book, Geoff Smart and Randy Street, recruiting consultants present a systematic method for hiring the right talent that you can use to improve your company's hiring process.
For a quick overview, the process they recommend has 4 components:
- Scorecard: Develop a "scorecard" for each role you want to fill. This outlines the purpose of the job, what is expected of the employee, and the characteristics needed for success in that role.
- Source: Actively search for candidates by using your network, Linkedin, or recruiters.
- Select: Use a structured, consistent interview process to objectively assess candidates.
- Sell: Throughout the process, sell the candidate on your business and the industry (i.e. doing a social good, growing industry, a new way to leverage law background).
The focus of this article is the first step:
The first failure point of hiring is not being crystal clear about what you really want the person you hire to accomplish. - Geoff Smart
The importance of the scorecard
Developing a scorecard for the core roles of legal funding is the highest impact, lowest cost step you can take to level-up your hiring process. It forces you, and anyone else involved in your hiring process, to identify the skills and attributes needed to be successful in a particular role, as well as what you expect that person to accomplish.
At each stage of the interview process, interviewers become responsible for assessing the candidate on those specific traits. A scorecard provides you with a clear, aggregate view of the interviewer feedback making it easy to see which characteristics and experience the candidate truly has, does not have, or what remains to be discovered in subsequent conversations.
Instead of relying on a gut feeling, or worse being influenced by bias, this system allows companies to make evidence-based decisions on whether or not a candidate is the right fit.
3 Pieces of the Scorecard
To create your scorecards, there are 3 questions you must ask and answer.
#1 Mission - Why does this role exist?
Create a 1-5 sentence executive summary of a job's core purpose that boils the job down to its essence. This is written in plain English to help everybody understand why you need to hire someone for the role, and should answer the question, "Why does this role exist?"
Examples:
Case / Account Manager:The mission for this role is to facilitate funding transactions between attorneys and law firms, plaintiffs, and internal team members.
Attorney Sales: Drive revenue by generating new referral relationships and maintaining current referral relationships.
Underwriter: Ensure positive ROI by accurately underwriting an assigned caseload.
#2 Outcomes - What must this role accomplish?
Set 3-8 objective outcomes that this role must accomplish in order to receive an "A" rating. This eliminates any ambiguity in what the hire is charged with accomplishing, which benefits both the prospective hire and your management team. It is key that outcomes are measurable, either with numbers, due dates, or simple binary outcome of "Yes/No."
Examples:
Case / Account Manager:Able to diagram internal funding process within 7 days
Attorney Sales: Produce average monthly recurring deal flow of $50,000 within 6 months
Underwriter: Maintain a loss rate <5%
#3 Competencies - What type of behavior is needed to succeed in this role?
This final section flows directly from the mission and outcomes, and defines how you expect a new hire to behave when fulfilling their mission and achieving the outcomes. Competencies are behaviors you believe someone must demonstrate to achieve outcomes, as well as 5-8 competencies that will be on every scorecard that describes your company culture.
- Persistent: Demonstrates tenacity and willingness to go the distance to get things done
- Thick-skinned: Not overly sensitive to criticism or insults
- Coachable: Receptive to, and implements, feedback
Scorecards you can use
Now that you have the basics down, the next step is to create scorecards for the positions you hire for most frequently.
To help you get started, here are 3 sample scorecards tailored for legal funders: Underwriters, attorney sales, and case/account managers.
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