Unintended and Unexpected Consequences from COVID-19 on the U.S. Legal Tech Job Market: Chapter 1, Sales Talent and the COVID Commission Dip

This series, “Unintended and Unexpected Consequences from COVID-19 on the U.S. Legal Tech Job Market,” is written by the founder and CEO of TRU Staffing Partners, a global leader in cybersecurity, e-discovery, and privacy placement and career management. Drawing from twenty plus years of experience representing talent and opportunities in global markets and having survived and thrived during and after past economic crises in 2001 and again in 2008–2009, Coseglia aims to help business owners, hiring managers, and both passive and active jobseekers to anticipate moments of change that are likely to occur as a result of the current impact the COVID-19 pandemic has had and will continue to have on job markets across the world. This series will examine how U.S. employment practices, policies, patterns, and people’s behavior may change in the coming months. Each chapter of this series will delve into a specific observation or trend starting with this week’s focus: Sales Talent and the COVID Commission Dip.

Chapter 1: Sales Talent and the COVID Commission Dip

Most business development professionals will tell you that over the last six weeks (April through mid-May 2020), business was steady but not on track with previously anticipated or expected revenue targets. Most individual contributors will admit that few new clients have given them net new business, but new projects from legacy accounts (as well as rolling ones from before the crisis) are active. Few sales reps, if any, are experiencing revenue growth right now, and it is unlikely that anyone will hit their OTE (on-target earnings) for 2020. Could this all change in Q3/Q4 of this year with an avalanche of new litigations, internal investigations, and privacy legislation? Yes. Are the people driving revenue at service providers, vendors, and consultancies counting on that avalanche? No. Everyone is bracing for a hit financially.

A slight step back: Successful sales professionals make the bulk of their earnings on commissions. Mature companies will often pay out commissions in monthly arrears; however, many pay out commissions quarterly. Many only pay commissions when payment is received for services. Combine corporate clients and law firms delaying payments in order to stay cash liquid with a dehydrating of net new business typical of Q2 revenues, and you get many business development pros who will see significantly smaller (or non-existent) commission checks at the end of Q2, Q3, or the months in between. A “dip” in commissions spurred by delays in new business and payment of old business will likely create a perfect storm of opportunity for individual contributors to consider a well-timed exit strategy where they leave little on the table at their current employer upon job transition.

Hiring and retaining sales talent is what most business owners attribute as their most challenging staffing issue. Companies do not generally like to buy out sales professional’s future commission earnings in order to motivate them to join their organization. Dually, business development executives do not like to leave behind earnings when making that transition. The next few months will create opportunities for employers to make cost-effective, well-timed wooing mission-critical to their 2020 sales talent acquisition strategy. Timing the stock market for peaks and valleys in which to invest is seemingly impossible, but using the impending commission cycle lulls related to COVID-19’s effect on the buying habits of cyber, privacy, and ESI decisionmakers is uniquely – and perhaps never-again – predictable. Which companies use this to their advantage now to hire swiftly and/or retain star sales players in a moment of individual contributor earning deceleration may determine the momentum and trajectory of that company’s business sales growth in 2021 and 2022.