4 min read

Hiring is challenging for all types of companies—whether you’re a small business, tech startup, or part of a Fortune 500 company. Legal funding companies face unique hurdles, including:

1. Limited talent pool: The legal funding industry is still growing, and it can be tough to find candidates with specific experience.
2. High turnover: Certain roles in legal funding have a tendency for high turnover, so it’s smart to always be passively recruiting.
3. Big impact of a bad hire: Most legal funding companies are small (typically between 5-50 employees), so one bad hire can have a major effect on the team.

Despite these challenges, hiring the right people gives your company a huge advantage. Great employees not only help you outperform competitors but also save you money by reducing turnover and avoiding costly hiring mistakes. With payroll making up about 70% of your operating budget, making smart hiring decisions is crucial.

Top legal funders treat hiring as seriously as their funding processes. A structured approach to hiring helps you make better decisions, and it all starts with scorecards.

Hiring Overview

For a streamlined hiring process, a systematic approach works best. In the book Who: The A Method for Hiring, Geoff Smart and Randy Street recommend the following steps:

1. Scorecard: Develop a scorecard for each role, outlining the purpose of the job, the expected outcomes, and the skills/characteristics needed for success.
2. Source: Actively seek candidates through networks, LinkedIn Talent Solutions, and recruiters.
3. Select: Use a structured and consistent interview process to evaluate candidates.
4. Sell: Throughout the hiring process, sell candidates on the benefits of working for your company and the legal funding industry.

The first step—creating a scorecard—is essential. Let’s dive deeper into how to develop an effective one.

The Importance of the Scorecard

A scorecard forces you and your team to clearly define what you’re looking for in a candidate. It outlines the specific skills, traits, and outcomes required for success in a particular role. By using scorecards during the interview process, you can objectively assess candidates and avoid hiring decisions based on gut feelings or bias.

With a scorecard, you get a clear, evidence-based view of each candidate’s qualifications, making it easier to identify the right fit for your company.

3 Key Elements of a Scorecard

To create a useful scorecard, you need to answer three key questions:

1. Mission: Why does this role exist?

Create a brief (1-5 sentence) summary that explains the purpose of the job. This should be a clear explanation of why you’re hiring for this role.

Examples:

• Case/Account Manager: The mission for this role is to manage funding transactions between attorneys, law firms, plaintiffs, and internal team members.
• Attorney Sales: Drive revenue by generating new referral relationships and maintaining existing ones.
• Underwriter: Ensure positive ROI by accurately underwriting an assigned caseload.

2. Outcomes: What must this role accomplish?

Define 3-8 measurable outcomes that the new hire must achieve to be considered successful. These outcomes should be clear, objective, and tied to the role’s mission. Use numbers, due dates, or simple yes/no measures to define success.

Examples:

• Case/Account Manager: Able to diagram the internal funding process within 7 days.
• Attorney Sales: Generate $50,000 in recurring monthly deal flow within 6 months.
• Underwriter: Maintain a loss rate below 5%.

3. Competencies: What type of behavior is needed to succeed in this role?

This section outlines the specific behaviors and competencies a candidate must demonstrate to achieve the outcomes. Competencies should align with both the role and your company’s culture.

Examples:

• Persistent: Demonstrates tenacity and the willingness to go the extra mile to get things done.
• Thick-skinned: Can handle criticism without becoming discouraged.
• Coachable: Open to feedback and able to implement it effectively.

Resources for Improving Your Hiring Process

Here are some helpful tools to guide you in improving your hiring:

1. LinkedIn Talent Solutions: A comprehensive guide to sourcing and hiring top talent.
2. Harvard Business Review – Hiring Best Practices: Practical advice for making evidence-based hiring decisions.
3. Zippia – Startup Hiring Challenges: Insight into the challenges of hiring for small or growing businesses.

By implementing these strategies, you’ll improve your hiring process, build a stronger team, and increase your company’s overall success.