Articles Posted in Talent

From 2006 through 2008, voluntary and involuntary departures from Ford Motor’s legal department reduced its lawyer numbers from 200 to 120, a 40 percent slash. During that period, as recounted in Corp. Counsel, March 2010 at 72, the company’s sales collapsed – it lost $30 billion – and it laid off 33 percent of its worldwide employees. Hence, and somewhat roughly, the legal department shrank in proportion to the shrinkage in revenue.

Years ago, Alan Lackey, the general counsel of Shell Oil, told a conference I attended that he had laid off 25 percent of his legal staff and barely noticed a difference in productivity. His point was that work expands to fill the available time and that people don’t bother to analyze how they get work done or the relative value of the work they do. Lackey’s layoffs presumably were based on increased productivity, not decreased numbers of such activities as deals, contracts, construction, and lawsuits that need legal counsel.

My point distinguishes between layoffs that track a decline in legal work needed and layoffs made possible by management improvements. Painful in either situation, layoffs from increased productivity commend a general counsel more than do layoffs because business is off.

The instrument costs $495 for individuals, it asks 298 online questions, and it takes about a half hour to complete. Your results come with a one-hour feedback session with a Birkman-trained consultant. This summary comes from Fortune, March 22, 2010 at 48.

The management team of a legal department might take the assessment and thereby learn more about themselves individually and as a team (See my post of Sept. 22, 2006 #3: Birkman Method.). It would be a good exercise for an offsite meeting. Everyone learns from their own confidential, 50-odd page personalized analysis and the four-color grid it places you on. The report delves into your work styles and your career interests.

Here are five points that traditionalists might advance against reliance on employees without law degrees for important undertakings. They come from a recent presentation.

“Attorneys are ultimately responsible” – but this argument, carried to an extreme, would have only lawyers doing everything, and perhaps only one per matter.

“Attorneys are always better qualified” – but this is not true, since no one can be a polymath expert in everything, nor do lawyers want to wade through the more routine parts of even significant tasks (proofreading, cite checking?). For significant amounts of law department work, a veteran paralegal will do excellently (See my post of March 18, 2005: asks if there are practical limits to what paralegals can do.).

Upwards of 80 percent of all US law departments have fewer than 10 lawyers. Even at the top of the range, assuming at least four or five direct reports to the general counsel, none of the other lawyers manage more than one or two lawyers and maybe they share management of a paralegal and a secretary. A sizeable chunk of in-house US lawyers manage not a single professional.

Yes, they may “manage” outside counsel, but that use of the term differs from “managing” direct reports. They may “manage up” but that is not what people management really means. Management means directing other people’s work, with all the supervisory responsibilities that entails, so if no one reports to you, you aren’t really a manager

Nor do lawyers in their circumscribed roles have much opportunity for leadership, at least if that term means bold moves, strategic shifts, and significant changes (See my post of June 11, 2008: leadership with 32 references.).

3M has steadily brought patent work in-house, according to Inside Counsel, Jan. 2010 at 43, shifting from about 65 percent of the work done inside to now more than 90 percent. At the same time, the department has “reduced the number of in-house patent lawyers by using patent agents with technical expertise for much of the work,” explains 3M’s general counsel.

Leveraging to para-professionals makes much sense for legal departments. Other categories of work that lend themselves to delegation to experienced members who don’t practice law include discovery and contracts. In the discovery mines, paralegals can handle a large portion of the work just as much as experienced contract managers can handle most of the contracts of a company. Contract managers and contract administrators, either within the legal function or without, show up here in several posts (See my post of March 18, 2005: separate contract managers from others; May 5, 2006: contract administrators and Convergys; Oct. 26, 2005: FMC has twice as many contract managers as lawyers; April 27, 2006: law firms can help with contracts administration; Dec. 8, 2006: contract managers and the evolution of matter management systems; July 3, 2007: NCR’s shared-service contract administrators; Aug. 19, 2007: seven contract managers at Scientific American; Nov. 7, 2007: Red Hat’s commercial contracting function of 10; and March 19, 2009: business units should designate contract coordinators.).

I should explicitly make a broader point: headcount should not be what general counsel have to abide by, but rather the total cost of their heads. If two people who don’t practice law cost less than half of what a lawyer costs, and can do almost as much, bring them on!

Recent data has appeared on general counsel among the Fortune 250 who do or don’t report to the CEO as well as the compensation differences between the two groups. The analysis comes from Equilar by way of a summary in Inside Counsel, Jan. 2010 at 42.

A graphic shows that 204 general counsel of the Fortune 250 report to the CEO while 61 do not. (I know, that totals 265 general counsel in the group of 250 companies.) The difference in their median total compensation favors direct reports by a whopping 40-50 percent ($1.3 million vs. $880,000).

What really surprises me is the number of GCs who do not report to the CEO. Almost one out of three must then report to the President, chief operating officer, or another senior executive. It follows that their total compensation would be lower, generally speaking, than “higher ranking” direct reports. The non-direct reports may also be younger and with less experience than the direct reports. Direct reports may also lead more functions, such as communications, compliance, internal audit, risk management. Still, the enormous compensation gap leaves questions unanswered.

Oodles of lawyers desperately want jobs, it’s a buyers’ market for any legal department that has an opening, and unsolicited resumes and beseeching inquiries flood in to general counsel – or so I thought. Why bother to throw out a line when fish are leaping into your boat? But there it is, an expensive full-page ad gracing Inside Counsel, Jan. 2010 at 11, by Microsoft’s Legal and Corporate Affairs (LCA). “If you are interested in joining a multidisciplinary team that’s making a real and lasting difference,” visit LCA’s site.

Does legendary Microsoft have to stoop to this, I thought? On second thought, however, for a few thousand dollars LCA might find strong talent that it would not otherwise unearth. I don’t interpret the ad as an admission of the Redmond giant’s difficulty recruiting, but rather as a smart move with tremendous potential for return on investment (See my post of Sept. 22, 2009: ways to find lawyers for openings other than search firms with 17 references.).

In an article from HR Mag., Feb. 2010 at 52, on employee engagement, the author mentions that Zappos.com sends around detailed surveys twice a year. The company also relies on “monthly, five question pulse surveys that ask employees to respond to broader statements such as ‘I feel like I’m making progress in my career.’”

Does any general counsel take the pulse of their law department with similar spot surveys? I have never heard of one (See my post of July 13, 2008: employee morale with 15 references.).

HR Mag., Feb. 2010 at 31, provides definitions of the two kinds of workers: Contract workers are “workers employed by a company that provides them or their services to others under contract. They are usually assigned to only one customer and usually work at the customer’s site.”

As for temps, the term “generally refers to employees of a temporary staffing agency who perform work on a temporary or seasonal basis.”

By these definitions, contract lawyers tend to work longer periods and under a contract and in connection with a certain kind of ultimate employer (See my post of July 17, 2008: contract lawyers with 12 references.). Temporary lawyers have shorter work-spans, handle less demanding tasks, and have a looser affiliation with one or more ultimate employers (See my post of Sept. 9, 2008: temporary staff with 8 references.).

If it’s in the HBR, it must be true. So here are the five from the Harv. Bus. Rev., March 2010 at 24: “Keep people informed, listen, set clear objectives, match the person with the job, and create meaningful work.” How applicable are these principles in a legal department?

Keep people informed. True everywhere as a tonic for engagement, and perhaps even more true for a collection of highly educated professionals. But I think many legal departments fall very far short of transparency. For example, in virtually all the departments where I have consulted, the lawyers who are not the general counsel’s direct reports speculate and wonder what happens in the senior staff meetings.

Listen. Honored in the breach. As busy as senior lawyers are or feel they are, they often don’t leave time for focused attention to what someone is saying. They discount the person, they clash in terms of personality or conversational style, they have their own priorities that are more important, they just don’t care. It happens with children: parents check out. It happens with those who supervise in legal departments.