Articles Posted in Talent

Henry Kissinger reviewed a biography of Bismarck in the NY Times Book Rev., April 3, 2011 at 10. He praises the Chancellor’s exquisite use of power and remarks more generally: “Power, to be useful, must be understood by its components, including its limits.”

That sentence provoked me to think about the components of power a general counsel can exercise as well as some of their limits. Managerial power vis-à-vis lawyers who report directly to the general counsel includes the right to (1) promote, (2) re-title, (3) award a bonus, (4) increase a salary, (5) send them to executive education, (6) place them in a high-potential program, (7) assign them work, (8) publicize achievements, (9) rearrange responsibilities, (10) locate offices, (11) set and evaluate personal objectives, and (12) shift subordinates – or to withhold or restrict any of them. In short, anything a manager can legally offer an employee or withhold exercises power.

Each of those decisions, each of which wields and manifests power, has limits. Human Resource policies and practices curtail the profligate bestowal of titles and compensation; a desire for internal equity and the congenial dynamics of the rest of the lawyers constrain too much lavish attention or harsh retribution. Then too client demands and headcount constraints hedge in some choices. Even with some reins, the components and variations of power cover much ground.

Rob Goffee and Gareth Jones, Clever: Leading your smartest, most creative people (Harv. Bus. 2009) at 77, state that “high-IQ individuals frequently performed badly when they were put together in a team. In competitive situations, [the researcher cited] found that teams consisting of less clever people typically outperformed teams of clever people.” Grant lawyers higher than average IQs and assume they are competitive: a bad mix for teamwork.

Eleven pages later the authors observe that “professional teams have a tendency to be willfully naughty.” In other words, they often display staggeringly low levels of social discipline. Lawyers on teams goof off, disrupt, act immaturely and often make a hash of coordinated efforts.

Goffee and Jones also write that teams of professionals seek to avoid feedback. Lawyers know they are smart so why hear what others think. Confident in their skills and abilities, they plunge ahead.

A panelist at the Georgetown University’s Center for the Study of the Legal Profession conference on March 9th, remarked that a successful in-house lawyer needs four attributes. He listed knowledge (what the lawyer knows), skills (how the lawyer applies that knowledge), behavior (what the lawyer does while applying that knowledge) and attitude (what the lawyer believes). Nothing new here to many readers, I suspect, but the quartet rang true and useful for me.

Most client satisfaction surveys dwell on technical knowledge and its practical application. They inquire less about desk-side manner or philosophical framework. For that matter, with evaluations of law firms the first two attributes also dominate: legal experience and applied know-how. The tenor changes a bit with annual evaluations of lawyers, which may emphasize collegiality, shared culture and other attributes somewhat more along with the traditional pair.

Not only are promotions hard to come by in most law departments, because the pyramid of senior positions narrows rapidly, but two other elements of our sense of happiness toss in monkey-wrenches. One is that bliss doesn’t last: once you reach the coveted rung of Assistant General Counsel, your euphoria subsides fairly quickly – you adapt. The once sought-after goal becomes accepted fairly quickly: “Is that all there is, my friend?” So the career path continues to stretch ahead and you don’t feel all that great for too long about your success.

Second, “happiness may not depend on our absolute level of well-being but on how it compares with the well-being of those around us,” in the words of in Eduardo Porter in his book The Price of Everything: Solving the mystery of why we pay what we do (Portfolio/Penguin 2011) at 71. If there are no other AGCs, you preen with pride; if you reach a level that has five peers, and all are more senior and better paid than you, your step up the career ladder leaves you feeling only so-so. For these two reasons, adaptation and comparison, the already-difficult march along the narrowing career path becomes even more problematic.

Caterpillar has 18 lawyers in its litigation department. The department’s head lawyer, deputy general counsel Lance High, also has on his team 13 engineers “dedicated to helping with cases that challenge the design and manufacture of Caterpillar’s products.” The passage comes from Corp. Counsel, March 2011 at 68, and surely describes a most unusual and large addition of specialized staff. I suppose those engineers testify as experts or advise retained experts. They might pitch in during patent litigation and they could teach lawyers about the massive equipment Caterpillar manufactures Perhaps they assist with discovery and trial graphics. Whatever their roles, the baker’s dozen of engineers deploy huge talent as they team with Caterpillar’s lawyers.

Throughout this blog there are references to specialists in law departments who are not paralegals or administrators, including e-discovery experts and project analysts (See my post of Sept. 10, 2005: the range of non-lawyer specialist roles; March 13, 2006: non-lawyer specialists; April 30, 2006 #5: procurement manager at Microsoft; June 4, 2007: Cisco’s knowledge management directors; May 27, 2008: risk of loss of non-lawyer specialists in law departments; and Feb. 9, 2010: Clorox’s project managers.).

A recent article in Corporate Counsel discusses administrators of law departments. The author notes that the Association of Legal Administrators (ALA) just added its 10,000th member, but that only two percent of them work for companies. A decade ago, if I recall correctly from speaking before the Corporate/Government Section of the ALA, as many as 450 belonged.

The drop off in membership in no way reflects a decline in the number of legal department administrators. It more likely implicates budget restrictions by general counsel and perhaps the perceptions of many potential in-house ALA members that the shrinking Section did not provide enough value. After all, the Association of Corporate Counsel of America (now ACC) came into existence partly because of dissatisfaction with the minority position of in-house lawyers in the ABA. Possibly, too, political rifts diminished the effectiveness of the Section or entrenched leadership did not move with the times or high-powered chief operating officers saw too little commonality with small-department or low-status administrative staff. But, whatever the reason, a drop off in the number of serving administrators of law departments in the United States was certainly not one of them.

Not that we know how many “administrators” there are. The article quotes a “magic number” of 50 lawyers that determines whether it is cost-effective to hire an administrator but that threshold is much too high. A consultant notes that law departments with as few as 20 lawyers “usually have one.” I put the number much lower. In fact, my book, Law Department Benchmarks: Myths, Metrics and Management, suggests that the tipping point is around ten lawyers, meaning that as many departments of that size have an administrator role as don’t. The role, to be sure, has much ambiguity, since some secretaries serve in an administrative role.

Capable professionals achieve more and are more contented if their work constraints are more like boundaries than bureaucracy. If simple rules, constitutional principles, broad descriptions of authority accompanied by inspiring goals, set the direction and structure, in-house lawyers and their teammates can cope with the unpredictable challenges of a law department with flexibility, creativity, and enthusiasm. Whereas, if elaborate guidelines, policy statements that fill binders, forms and documentation, legalistic interpretations of authority, levels of approval, and other trappings of a regimented and regulated workplace dominate, professionals chafe, underperform and resent.

That distinction, at least, is what I glean from Rob Goffee and Gareth Jones, Clever: Leading your smartest, most creative people (Harv. Bus. Press 2009) at 43 between loose boundaries and tight bureaucracy.

Which leadership culture prevails in a law department – and all departments manifest aspects of boundaries and bureaucracies – depends on the size of the department, the psyche of the general counsel, corporate culture, the evolution of the department, and other factors. Creating the right sort of space for high-performing lawyers within companies “sufficiently large to allow clevers to express themselves, but also with boundaries that help them focus their efforts – is vital” (at 51).

Sociologists often invoke a “sharp distinction between rural Gemeinschaft (inherited, emotional community) and urban Gesellschaft (created, cold society).” Deirdre N. McCloskey, Bourgeois Dignity: Why Economics Can’t Explain the Modern World (Univ. Chic. 2010) at 17, wrote that. She discredits it as a falso historical and societal split fabricated by German Romantic scholars of the nineteenth century (especially Ferdinand Tönnies).

Even if false, the ideas underlying the two “schafts” help us characterize how we can think of law departments. Some general counsel strive for a more cozy, family-like feel; others stress productivity and rules and professional detachment (See my post of Jan. 9, 2009: law departments as a close-knit family or a leave-me-alone workplace.). Of course, no law department is all hugs-and-kisses or all don’t touch me. Even within a law department moods of collegiality or otherwise vary.

The Harv. Bus. Rev., March 2011 at 65, has an article about “the new path to the c-suite.” One part looks at what it takes to become a chief legal officer. It explains what the author sees as the dramatic upgrade in the position of general counsel during the past 20 years. The major impetus has been “the heightened attention to risk management” that “broadened the role of general counsels over time.” No mention, I point out, of concerns about legal costs, only of risk mitigation.

Later the piece states, grandly, that “Increasingly, firms insisted that the top lawyer be at the table to discuss new initiatives so that their risks could be thoroughly analyzed before rollout.” Not so, I fear. Most general counsel struggle to be included during key business discussions, so “insistence” hardly conveys the resistance they sometimes encounter.

My last observation stems from the piece’s emphasis on regulatory experience as a must-have for CLO hopefuls. “To land a general counsel job today, a lawyer needs experience negotiating with legal and regulatory agencies and industry watchdogs” and cites the DOJ, FINRA, the SEC and FTC, Treasury and the Office of the Comptroller of the Currency. For some industries, to be sure, those regulators play huge roles, but for many industries, unless you have publicly traded debt or equity, none of them have much bearing.

“Though the role of general counsel will continue to attract senior partners from law firms, companies will be more reluctant to pull executives straight from private practice, preferring candidates with in-house experience who understand how to manage the people and finances of a legal department and how to operate as part of an executive team.” The quote comes from the Harv. Bus. Rev., March 2011 at 66, an article on how the top executive positions in companies – including the general counsel’s – have evolved.

The prediction makes sense and it should not be hard to test empirically. Law firm partners will likely become ever more specialized in their legal work, which makes them less suitable, all other things being equal, for running a range of people, practices, legal issues, and supervisory requirements. Those partners with significant management experience in their firm may still be seen as attractive candidates, but the more favored career path of a new general counsel will have been through another law department or an internal career.