If you hold a senior position at an Asset Manager, as a Chief Investment Officer, Head of Human Resources or Head of Distribution, you have probably met the idea of ‘Off Limits’ when dealing with recruitment firms. The practice is common across the industry, and it protects everyone involved, employers, employees, candidates and Search firms alike, by keeping confidence and building trusted relationships.
In essence, an ‘Off Limits’ clause means that a Search firm under contract with a client agrees not to approach or recruit that client’s employees for a set period. It is a feature of retained Search, and is not usually applied to contingent assignments or one-off introductions.
The terms and duration are normally set out in the initial contract. Where it is defined explicitly, the industry standard is at least one year from the date of the last placement; often, though, it is open-ended, lasting for the life of the supplier agreement.
The arrangement benefits both sides. It builds trust, supports a long-term relationship, and marks the Search firm as a trusted adviser rather than a transactional supplier. It also allows closer collaboration: with ‘Off Limits’ in place, a client can share candid information about its people and teams, which the Search firm needs in order to understand the culture and team dynamics, without fear that the recruiter will then try to poach them.
Honouring those terms is how a Search firm shows it puts the client’s interests first. Breaking them erodes trust, damages reputation, and costs future work.
Managing the ‘Off Limits’ list is one of the most important parts of a Search Consultant’s client strategy. Too few ‘Off Limits’ clients means too few retained Searches; too many, and the firm cannot deliver, because there are too few houses left from which it can headhunt. The ideal is a diversified client list: a blend of large, top-tier globals alongside smaller niche players and asset owners such as endowment funds and family offices.
This is also why, when choosing a retained Search firm, bigger is not always better. It is tempting to pick the global firm with the largest practice, but the wider its client base, the more conflicted it may be, and the fewer houses it can approach on your behalf. It is always worth asking a Search firm which houses are already off limits to it.
In our experience, the higher the quality of the Search firm, the fewer clients it serves, and for longer. At Godliman we have worked with our two longest-standing clients for over 20 years. Be wary of recruiters who list long client rosters on their websites: it suggests either a loose approach to off limits, or a steady churn of clients.
Some hiring firms play the same game in reverse, signing up many Search firms to build wide off-limits protection while giving each only one Search, or none at all beyond a place on an ‘approved suppliers’ list. From the Search firm’s side, open-ended agreements need to be entered into with care and reviewed regularly, because there is a real cost to carrying unproductive ‘Off Limits’ clients.
This is where key-account or preferred-supplier arrangements help both parties: the client engages a limited number of firms and gives each a regular flow of Searches each year, or sets a defined duration for the ‘Off Limits’ agreement.
It is a delicate balance to manage. Our own approach has always been to build longer-term, trusting partnerships, and for long-standing clients we will often maintain de facto off limits even after the formal period has expired. In the end it comes down to trust on both sides, which is also what good Search quietly depends on.
If you would like to know which firms are already off limits to us, or to discuss a retained or preferred-supplier search arrangement, please contact us at hello@godliman.com.
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