Articles Posted in Talent

All law departments interview applicants, often devoting hours to them and more time for internal deliberations.  It dismays me, then, to read that “decades of research have suggested that, despite their widespread use, interviews are not very predictive of applicants’ future performance.”  We think we can size people up, ask penetrating questions, and judge their abilities objectively.  We can’t.  Other tools serve us better, but they are less used by law departments: work samples, cognitive ability tests, behavioral interviews, and tests of conscientiousness, for example.

This background comes from an article in the Acad. Mgt.  J., April 2012 at 63, which focuses on the frequency with which applicants are not forthright about themselves during interviews.  This blog has offered ideas before on interviewing job seekers (See my post of May 22, 2009: hiring interviews for lawyers with 6 references.).

After my initial metapost, I continued commenting on interviews (See my post of Dec. 22, 2009: GC and local management should combine to recruit a local lawyer; Jan. 12, 2010: recruitment costs presumed to include trip for interviews; May 24, 2010: benefits of checking references before interviews; Jan. 17, 2011: six questions you should ask during an interview; and March 6, 2012: superficiality of the interview process.).

Below is a translation from Portuguese of an item about a Brazilian state (Maranhao) and its establishment of a minimum wage for in-house lawyers.  This came from a Brazilian consulting firm’s website.

“The controversy surrounding the base salary of lawyers seems to be in their final days in Maranhao. The Council approved the Bar Association of Maranhao on Thursday (21/6).  The … draft law shall fix the salary of the lawyers service providers in private companies. After preparation, the project will be sent to the Governor of the State for approval.  Lawyers who work 20 hours per week will have a base salary of $2,500. For 40 hours, the stipulated amount is $5,000. During the session, the majority of members present upheld the values ​​that had been suggested at a public hearing conducted in May.”

From this paragraph it is not clear whether the two base salaries are $30,000 and $60,000 a year (See my post of Jan. 6, 2011: base salaries of Brazilian in-house attorneys were much higher.).

Interviewed by the CCCA Mag., Winter, 2010, the tub-thumping former general counsel of General Electric offers a grandiose view of the general counsel’s role.  According to Ben Heinemann, a trend that is more powerful than cost-cutting is “that business and society issues have become an important part of the CEOs job description.” Hard to dispute that.  However, he adds with a flourish, “CEOs need top legal talent with broad experience to deal with those issues.”

Why? No doubt, CEOs would like to have as excellent legal talent as their companies can realistically afford, but is there an expectation that the top lawyer should bring to the table such magisterial competence? Is it indeed the role of the general counsel to give guidance to the CEO on “business and society issues” and therefore to have the “broad experience” to do so in a constructive and insightful way? I don’t think so. Of course, good lawyering means thinking beyond narrow legalities of rights and responsibilities. Many times, that is fully challenging enough. If the expectation runs far beyond that – to dispense wisdom about complicated challenges that are peripherally related to the law – we have not just scope creep, but scope run.

The term “reverse mentoring,” new to me, it appears in InsideCounsel, April 2012 at 41.  They are programs “in which people who are in the earlier stages of their careers mentor more-experienced attorneys in the department to help them to see the organization from the eyes of people at an earlier stage.” The article does not give an example of a law department with a reverse mentoring initiative, although it mentions the legal departments of Gap Inc. and 3M as promoters of traditional top-down programs.

General counsel who want to take the pulse of their junior lawyers would be more likely to hold skip level meetings, arrange informal lunches, or learn by wandering around. One reverse-mentoring exception I can imagine would be on use of software, where an enlightened but technologically backward senior lawyer might welcome some tutoring by a computer-savvy younger lawyer.

The Atlantic, July/Aug. 2012 at 68, has a piece on the leadership styles of introverts and extroverts. According to some recent research, “introverted leaders typically deliver better outcomes than extroverts, because they’re more likely to let proactive employees run with their ideas.” Later, the article suggests that extroverted general counsel, “who like to be at the center of attention,” may feel threatened by subordinate lawyers who take too much initiative (See my post of Feb. 14, 2011: Kronos effect.).

The short piece mentions other powers of introverts. They persist, they take more careful risk, and they are more comfortable with solitude – “a crucial spur to creativity.”

So, a boisterous, rah-rah style, Teddy Roosevelt leading the Rough Riders may not fit so well in a law department (See my post of April 18, 2005: lawyers’ MBTI scores compared to those of the general population; Aug. 21, 2005: lawyers as introverts; and June 11, 2006: Meyers-Briggs and a generational shift toward extroversion.). Many of its projects last a long time, involved risk judgments, and call for thoughtful solutions.

My law school alma mater, Columbia (JD ’78), took steps after the 2008 crash to help its graduates find jobs. According to the Col. Law School Mag., Spring 2012 at 2, the Dean of the Law School “reached out to more than 100 graduates who are general counsels or deputy general counsels to encourage them to hire graduates straight out of law school, which is not common.” It worked. Through that effort, about five percent of the Class of 2011 and four percent of the Class of 2010 were hired by a legal department. The Law School graduates something like 350 lawyers every year, so 10-15 of its graduates each of those two years started their practice in a law department.

That is an unusual career path, especially from a very prominent law school (See my post of Nov. 8, 2005: how infrequently law departments hire straight from law school; June 24, 2007: few hires straight from law school; Sept. 18, 2008: innovative arrangement for law school graduates to get law firm training before joining Citigroup; March 9, 2009: about 4 percent go straight to a legal department; Oct. 5, 2009: GCs should encourage law students to consider in-house jobs; and Oct. 19, 2011: IBM hires straight from law school.).

An article in the Acad. Mgt. J., April 2012 at 399, concerns a problem well recognized among human resources professionals: “the transition from expatriation to repatriation routinely culminates with repatriates quitting organizations.” If you post a lawyer to an overseas location, when they return they often leave the company. The article cites a large-scale study of 120 multinational organizations. Repatriated employees voluntarily quit within the first year of returning to their home country at a rate three times that of the turnover rate of all employees.

Not that expat assignments are all that common in law departments, but when there is an international posting, it would be a loss to have the lawyer return and shortly thereafter resign. The article concludes that the during the time overseas, the employees change so much that they no longer fit well when they return. General counsel should try to preserve their investment in lawyer who are probably high potentials since they were sent overseas for training and exposure.

As my General Counsel Metrics benchmark survey now collects compensation data, I pay more attention to findings from that realm. For example, “In Brazil, lawyers can expect to receive an average basic salary of $279,600 – 21 percent higher than the average of $231,500 in the United States.” That comes from the ACC Docket, May 2012 at 18, which draws on a compensation study done by a recruiter. I have previously reported on data for U.S. general counsel, who from my data had median base salary plus bonus of $279,457 (See my post of May 23, 2012: from General Counsel Metrics benchmark survey.). The reported Brazilian and U.S. figures seem quite high, especially if “average basic salary” does not include bonus amounts.

I digress. Here is the point of this post. “In Dubai, the average salary has reached $181,800.” That is strikingly lower than the other two national figures but as is disclosed thereafter, Dubai residents don’t pay income tax. If you were to add roughly one-third to the basic salary figure for taxes, the comparison with Brazil and the United States becomes much closer. A benchmark study, let alone a compensation study, that uses Dubain figures unadjusted would seriously misrepresent comparisons.

Organizations that collect compensation and benchmark data gravitate toward large law departments. They want to boast about the impressive number of lawyers among their respondents, the gargantuan revenue they support, and the league-table rankings of their participants.

The downside of the Fortune fetish is that the resulting metrics do not match well for the four more numerous smaller legal departments, who operate under different constraints. Compensation figures, especially, skew much higher for large departments. A recent post underscored this “income inequality.” The median cash compensation of a set of general counsel of smaller companies was less than the median cash compensation of specialist lawyers at predominantly large departments (See my post of May 23, 2012: preliminary data on compensation from General Counsel Metrics.).

For the first time, this year’s General Counsel Metrics benchmark survey collects and reports on compensation data. Only law departments in the United States or Canada are eligible to submit lawyer and administrator compensation data and receive a report, at no cost. To obtain your benchmark report, click on this link and submit your 2011 staffing and spending data.

Sixty-three general counsel have so far provided their salary, bonus, and equity award. On average they have been out of law school 23 years. The average number of lawyers in their departments was just under five, so bear in mind that these are smaller departments. As such their size is representative of the majority of legal departments in the United States. Smaller departments don’t pay as handsomely as large departments (See my post of April 16, 2012: five specialty areas and compensation.).

The median general counsel salary last year was $220,000, while the median cash bonus was $55,000. Overall, for salary plus cash bonus, the median general counsel of this group received $279,457.