Articles Posted in Talent

Paul Elst, one of my readers, wrote me. He is an attorney in the Netherlands and has an interesting story that probably has counterparts in many countries of the world.

I work as legal counsel on a freelance basis. In Dutch:” interim jurist”. In the past 7 years I have worked for 12 different companies in the Netherlands. In August I finished an 8 month assignment at one company to replace a person on pregnancy leave. And now I am working for Getronics, a company not free to add head count but free to buy in legal services from me and two other interim-jurists. Contract, IP, and competition law are my main responsibilities.

There are a growing number of experienced lawyers in the Netherlands, now some 400-500, that prefer to work as legal counsel on a freelance basis.

Having written approvingly about so-called 360˚ assessments, where managers, peers, and reports complete assessments of a lawyer, I think of them as useful (See my post of Dec. 26, 2007: 360˚ instruments with 5 references.) What a person learns from a 360-feedback can be constructive, but an article in talent mgt., Aug. 2007 at 12, raises some disturbing points that vendors and advocates won’t tell you.

1. “Most 360-feedback instruments measure competencies that are highly correlated with one another, making it difficult to discern specific areas on which to focus developmental efforts.”

2. “If you use average scores to summarize rater feedback, without some indication of rater agreement, it’s easy to misinterpret polarized feedback. This can lead to behavioral changes that might actually be destructive.”

The quote comes from Catherine Nathan, a partner at Spencer Stuart who places senior in-house lawyers. She makes the point in Diversity & The Bar, Vol. 10, May/June 2008 at 32, that CEOs have much more experience hiring CFOs, COOs and HR executives, but they are on unfamiliar ground when they have to select a CLO. That may well be true. One of the contributions of an executive search firm is to help those CEOs establish the right priorities and processes for hiring a top lawyer.

The article profiles several leading search partners (See my post of July 5, 2006: list three prominent search-firm specialists.), including Selena LaCroix at Egon Zehnder International (See my post of Sept. 16, 2008: recruiters with 12 references.)

Retreats (aka conferences and offsites) often start with a get-to-know-others activity (See my post of Sept. 25, 2008: ice breakers at law department meetings.).

Later on, many meeting planners want a dose of team building. Here are some examples from my consulting experience.

1. Team cooking (such as by Team Cuisine in Massachusetts) lets members of a law department do something together that is not competitive and is fun. It might even be tasty.

A study of women who lead the legal teams at 92 companies on the Fortune 1000 list presents the data in every imaginable way. Two points from the Diversity & The Bar, July/Aug. 2008 at 30, particularly caught my eye: general counsel who were promoted and the positions new general counsel come from.

Four general counsel on the previous year’s list – Angela Braly of WellPoint, Michelle Goolsby of Dean Foods, Michelle Halasz of CarMax, and Laurene Horiszny of BorgWarner – accepted new positions outside of the law department in their companies (See my post of March 24, 2007: promoted general counsel with 8 references); and May 26, 2007: six references cited.). I do not know whether the likelihood of a female general counsel being promoted is greater than a male general counsel.

The study also reports that 20 new women general counsel appeared among the Fortune 501-1000 group. Setting aside three who were in their position when their company cracked the list, of the remaining 17, ten rose from the ranks of their law department and four joined from another company’s law department. The sample is small but if 14 out of 17 came from a law department, presumably the other three came from a law firm. I wish we knew more about the ratio of law department and law firm newly-promoted general counsel and whether gender makes a difference.

The presidential election campaign concluded, I can return to blogging. Thank goodness, because I threw myself into it the past couple of months and left little time to write.

What do you do if your boss supports the candidate or party that you don’t, and both of you care about politics? I thought of this as I read in Corp. Counsel, Vol. 15, Nov. 2008 at 18, about five general counsel who as of July 31st had collectively donated more than $150,000 to the Democrats and five others who had donated more than $120,000 to the Republicans.

Having embroiled myself in exchanges too many times in the past few months, I recommend silence, and even more so if your general counsel has publicly taken a stance. Don’t elect to mix work and politics.

According to the “indifference theory” of economics, in a perfect market the value of a company is independent of its capital structure, which is its mix of equity and debt financing. Having read about this in the Harv. Bus. Rev., Vol. 85, Sept. 2008 at 94-95, I wondered whether the effectiveness of a company’s legal risk management function (aka law department) is independent of its talent structure, its mix of inside and outside lawyers. Perhaps we can think of the fixed cost of internal lawyers as debt — a company has a contractual obligation to pay its dividend (salaries and bonuses). The outside lawyers it hires are equity, varying in value (expense) according to how and how much that variable expense is used.
Benchmark metrics suggest that the ratio of a typical law department’s spending on inside counsel and outside counsel tracks the differential in cost per hour between the two sources of legal talent (See my post of Dec. 5, 2007: 60/40 ratio of outside-to-inside spending.). Perhaps that is the normal ratio for talent of debt to equity.

Some general counsel wander in the wilderness, sometimes for several years, before they become the top lawyer. Sandy McDade, for example, practiced for 20 years in Weyerhaeuser’s law department. He then left the department and spent six years in a strategic planning role and as the leader of the company’s Canadian subsidiary. At that point he rejoined the law department, but as the general counsel.

The tale of this unusual path comes from InsideCounsel, Oct. 2008 at 90. James Lipscomb, the current general counsel of Metropolitan Life also spent several years in business roles before assuming the top legal position. Other chief legal officers have gained experience outside the law department See my post of Aug. 3, 2005: career of Rosemary Berkery; and Nov. 6, 2005: GC of the Bank of Australia ran its strategy group.).

It is a good practice to designate “minors” for many of your in-house lawyers – secondary areas of law they should keep up on for the benefit of the entire department. Their “minor” knowledge, which may relate to their primary discipline but certainly has importance from time to time to others, becomes a shared resource for the other lawyers in the department.

As he explained at a PLI conference, Ed Greene’s lawyers at Citigroup identify colleagues who have deeper experience in particular niches of law. For example, a secured lending lawyer might take responsibility for keeping up on derivatives. Lawyers “major” in whatever they handle routinely, and “minor” in their assigned specialized subject (See my post of Dec. 21, 2005: majors and minors at Ascential Software; Dec. 17, 2006: majors and minors for in-house counsel at RadioOne; Nov. 20, 2006: FMC lawyers have areas of recognized expertise; Nov. 16, 2005: assign lawyers specific areas of expertise.).

Another term that some people use for this concept is “subject matter expert” (SME) – pronounced SMEE (See my post of March 17, 2006: subject matter experts.). A SME is the person with the most expertise in a specialized legal field (See my post of Nov. 16, 2005: assignment lists for lawyers and clients; March 17, 2006: bones to pick with SME’s.).

“General Mills Inc. tracks the number of ready-now candidates for each position at or above the vice president level.” The company requires senior executives to cultivate and list who has the training and experience to step into each VP position. This comes from MIT Sloan Mgt. Rev., Vol. 50, Fall 2008 at 68.

Many law departments have some vice presidents among their lawyers, but I suspect very few of their general counsel have “ready-now” candidates for each of those VP positions. General Mills has an “ultimate goal of 10 candidates for each executive job.” No law department has anything near such a well-stocked bullpen.

General Mills “also measures movement in the talent pool, reporting the percentage who have been promoted, the percentage who participated in significant development activities and their retention rates.” Few law departments have the heft to do this for VPs, but it is an aspiration for high-potential lawyers (See my post of July 29, 2007: high potentials with 10 references.).