Like most things you “hear” on the street, this statement is not reliable. It is over-simplified at best and dead wrong at worst, depending on the particular circumstances. Let us start with a short overview of how recruiters’ fees work. Generally, it does not cost the candidate anything to use a recruiter. The recruiter is paid a commission fee (usually 25% of the candidate’s first year compensation) by the law firm if and only if the law firm decides to hire the candidate.
Candidates also sometimes “hear” that the recruiter’s fee will be taken directly out of their first year compensation. This is pure fiction. The two transactions are separate. Law firms negotiate fee agreements with recruiters and pay their fees for a very good reason – they want to hire some of the candidates that the recruiters bring to the firms. It is part of the general cost of recruiting and doing business, and it is wise investment given the value of hiring a desirable attorney with hard to find skills and/or portable business. By contrast, the decision to hire a candidate is based on that candidate’s merits and value in the market. The fee has nothing to do with the hiring decision or the compensation, which is based on the firm’s policies and preferences.
Accordingly, a firm’s decision to hire a candidate represented by a recruiter makes the most sense when the candidate is exceptionally strong in comparison with the rest of the market. In other words, the firm is seeking to get something it cannot normally get from the market, so it is reasonably willing to pay a fair premium, or finder’s fee, to the recruiter who brings them such a candidate. If anything, the recruiter’s fee helps make such candidates appear even more desirable. There are thus many reasons why it is in the interest of exceptional candidates to use a recruiter (see my prior article on the 12 reasons why it is best to work with a recruiter).
Of course, this also means that if a particular candidate is not exceptional compared to the market (e.g., they did not go to a top law school and/or have stellar grades; they are in a practice in which there is a large supply and low demand; they are not practicing at a “big firm;” they lack substantial portable business; and/or they have other problematic issues, such as “gaps” or “hopping” indicated on their resume) does not get the same major advantages in using a recruiter. If the candidate’s credentials are essentially the same (or less) than the credentials of thousands of other applicants, then why would the firm want to pay a recruiter’s fee to hire them? More on point, why would the firm want to interview them in the first place if the candidate is short on the merits? In other words, while the fee usually does not directly impact a firm’s decision not to hire a mediocre or problematic candidate (as suggested at top), it is true that the recruiter’s services and attached fee are going to be (at best) of no help to that candidate. The lesson here is that recruiters are best used for exceptional candidates. More average candidates are usually better off not using a recruiter and applying to firms on their own if they wish. At a minimum, they will not waste valuable time with a recruiter that can’t help them.