Articles Posted in Talent

KMWorld, May 2011 at S4, gives the background of Devin Krugly, currently at AccessData. In the squib it says that he came from Exxon Mobil and “a three-year effort to grow an in-house e-discovery team …” That project included “a year-long process to evaluate potential vendors which led to 24 months of assessing fit and purpose of an e-discovery team and design of an IT structure to support the team’s activities.” Then, I gather, Krugly gathered up all his experience left for a vendor.

Ay, there’s the rub. Just when an employee becomes expert in e-discovery, some vendor or consulting firm poaches them. The lure of more money, variety, and an upward career path persuades those who learn the trade at the expense of with a corporation or law department. As I have written, it is hard to keep talent when dollars and stimulation beckon (See my post of June 11, 2008 #3: hard to keep e-discovery expert.).

The Corporate Grapevine of the ACC Docket, May 2011 at 142, mentions that Joia Johnson, the chief legal officer of Hanesbrands, has been elected to the Board of Directors of Crawford & Co., an insurance services firm (See my post of March 25, 2009: GC of McDonald’s on board of Aon Corporation.). I continue to be perplexed when general counsel serve on the Board of another company.

Who gets the director’s fees? What about recusals and conflicts of time demands (not to mention possible conflicts of interest if the two companies do business together). Unless a significant business link exists between the general counsel’s company and the Board company, what’s the benefit? Even then, or especially if the two companies compete or might compete, aren’t the potential conflicts entangling for the general counsel?

Boris Groysberg, Chasing Stars: The Myth of Talent and the Portability of Performance (Princeton Univ. 2010) at 127, talks briefly about how an organization, such as a law department, can excel at assimilating new hires. Unfortunately, research about this is scarce: “Little is known about integrating experienced professionals into a new organization.”

Most general counsel probably do not think too long about the post-hire integration of a new head of litigation or a new EMEA regional counsel. Groysberg’s study of equity research stars who change companies found that the most success came to those companies that “had thought deeply about both hiring and assimilation and had drawn up systematic plans to guide both processes” (at 128) (See my post of Aug. 25, 2010: on-boarding with 6 references.).

When a lawyer joins a department, it is too important to be casual, let alone negligent, about how to help that lawyer come up to speed both professionally and socially.

“Researchers have estimated the cost of losing a seasoned professional as 75-150 percent of the person’s annual salary,” according to Boris Groysberg, Chasing Stars: The Myth of Talent and the Portability of Performance (Princeton Univ. 2010) at 239 (See my post of May 14, 2005: estimate of about $100,000 for inside lawyer; June 15, 2005: upward revision of that estimate; and July 27, 2008 #2: 100-150% of salary of high performer with unique skills.). Those estimates may hold for most in-house lawyers, but not for the top lawyer.

When a general counsel leaves, the loss far exceeds such monetary ones as recruitment, relocation, training, ramping up. The entire ethos of the department alters. Passed over candidates can fester or leave; everyone has to prove themselves all over; established routines change; political elbowing sharpens; and everyone holds their breath (See my post of March 8, 2009: attrition in law departments, with 16 references and one metapost.)

My impression is that most general counsel leave on schedule. They retire with their boots on. Unexpected resignations or terminations – unusual, but they happen – occasion the greatest loss and upheaval.

It is easier to bring a lawyer into a department that already has one or more lawyers already in that person’s practice area than it is to bring in the first lawyer of a kind. This common-sense proposition came to my attention from Boris Groysberg, Chasing Stars: The Myth of Talent and the Portability of Performance (Princeton Univ. 2010) at 133, where he talks about exploitation of existing competencies compared to exploration of new competencies.

A law department’s first employment lawyer, by way of example, faces a daunting task of setting policies, reviewing an unknown collection of agreements, meeting clients, determining priorities. The second HR lawyer who joins that first one has a much smoother path.

For this reason, larger law departments have an advantage, since they do much more exploitation – build on existing expertise and knowledge – than exploration – establish a new practice area. Related to this idea is the notion of core competencies. The more a department focuses on what is most important for it to handle, the more it will bring in bolt-on talent to exploit as compared to pioneer talent to explore.

I admire Boris Groysberg’s book, Chasing Stars: The Myth of Talent and the Portability of Performance (Princeton Univ. 2010). He exhaustively studied equity research analysts who were top-ranked by Institutional Investor. The first chapter condenses a huge amount of research on innate performance drivers and acquired performance drivers, and his book adds one..

On the side of what people seem born with, the pre-eminent one is general intelligence, sometimes called “g” by psychologists (See my post of Jan. 6, 2009: high g’s are healthier.). He also points out emotional intelligence – an array of attributes including self-awareness, self-regulation, motivation and empathy (See my post of Sept. 20, 2010: lawyers and their brains.). He includes deep motivational structures such as those studied by David McClelland), including the need for achievement and for socialized power. Also deeply internal to people, part of their innate makeup, are personality and temperamental attributes such as energy, persistence, and a low anxiety threshold. For law departments, hiring decisions seem quite sensitive to these factors as they pore over resumes, schools attended, and higher degrees.

Genetic inheritance, however, is not destiny. Others who study professional excellence focus on acquired skills. The most fertile discipline that espouses this view is human capital theory (See my post of Aug. 14, 2009: human capital with 10 references.). Adherents to this view see education, experience, and skills acquired lead to higher productivity. Continuing legal education, HIPO programs, lunch-and-learns, and other efforts by law departments build human capital and past work experience embodies it.

Earlier I discussed what I thought was established wisdom: people with wide-ranging “weak ties” tap into and benefit more from ideas than those who mostly confer with their relatively few strong ties who think similarly (See my post of Dec. 31, 2010: a network perspective on the strength of weak ties.). Not everyone agrees.

Clive Thompson, writing in Wired, May 2011 at 68, presents a contrary view based on others’ research. How often we talk to people in our network matters more than their being like minded (a phenomenon called homophily). Weak-tie acquaintances you rarely speak to shape your thinking much less than the strong-tie friends you share ideas with all the time. Frequency of contact tips the odds toward them being a more valuable source of news. The article describes them as high-bandwidth ties.

By this logic, in a law department, the person in the office next to you or your lunch buddies influence your thinking and creativity far more than the 350 LinkedIn connections you show. Social scientists will argue this debate for a long time.

Career paths for in-house attorneys occasionally wend out of the practice of law. It’s a tough transition, however, and controversial. The large number of references on this blog to émigrés from the legal team are perhaps the notable exceptions that prove the rule (See my post of April 18, 2005: high failure rate at Manulife of departing lawyers; Aug. 3, 2005: career of Rosemary Berkery of Merrill Lynch; Nov. 6, 2005; Telstra example; Nov. 6, 2005: David Krasnostein of the Bank of Australia ran its strategy group for a while; Dec. 15, 2005: MetLife’s general counsel left the law department for some years; and Aug. 14, 2006: new deputy general counsel had most recently been the chief auditor.).

After my spurt of posts early on, the stragglers thereafter have come at long intervals (See my post of Aug. 4, 2007: general counsel, Jeffrey Kriendler, ran Boston Markets; Feb. 16, 2007: grooming a general counsel with business experience at TransCanada; Oct. 22, 2008: Weyerhauser lawyer left department for six years; and April 6, 2011: who instigates transfers.). With headcount and hiring restrictions shackling general counsel, perhaps the incidence of moves to the business side has declined.

Earlier I wrote about the managerial decisions at the disposal of general counsel regarding lawyers who report to them. Each decision has limits but together they comprise power (See my post of April 5, 2011: 12 aspects of power.). Much material appears on this blog regarding each of those indicia of power.

Here is the list with a metapost or two for most. A general counsel has the power to:

(1) promote (See my post of May 4, 2009: in-house counsel career paths with 15 references.).

The emigration happens infrequently and I have always thought it was a result of client poaching. Put more politely, a client likes a lawyer’s background and abilities and persuades the lawyer to move over and take on a business role. The lawyer presumably welcomes the change of seat. The general counsel grins and bears the loss.

Then I read the opposite perspective in “From in-house lawyer to business counsel,” by the UK law firm Nabarro at 3. Said a general counsel, “It is quite difficult to persuade the business that it is a good thing for a lawyer to move into the commercial side.”

I never imagined a general counsel who wanted to offload a lawyer to the client side. Well, maybe in the rare case of a short grooming period for a likely successor, but not as a matter of course, not at all. To persuade a client to take on a lawyer sounds completely improbable.