Articles Posted in Talent

Mark I. Sirkin, Ph.D., Hildebrandt International

Since law departments recruit mostly from law firm associates, the more general counsel know about them the more successful recruiting and retention efforts will be. According to Hildebrandt International, Understanding Associates: New Perspectives on Associate Satisfaction and Morale (Somerset, NJ: 2007), associates divide into four distinct groups: Career Practitioners, Flexibility Seekers, Called Lawyers, and Willing Workers. Here is an overview of the differences between the groups:

Segmentation of Associates

The Bill and Melinda Gates Foundation is the largest charitable organization in the world. Its legal department, according to Corp. Counsel, Vol. 14, Dec. 2007 at 103, has 12 lawyers. Ironically, for such an extraordinarily endowed organization, the annual budget for that department, which has assisted with the donation of $13.6 billion since 2000, is a paltry $2.1 million. I assume that budget covers internal expenses only, not payments to outside law firms.

Let’s assume that compensation in that law department accounts for 80 percent of its internal budget, which is a generous estimate in light of the common percentage for US law departments. Next, let’s further assume that lawyer compensation is approximately 80 percent of the compensation pool (See my posts of May 16, 2007; and July 2, 2007 in support of this typical metric.). Multiplying the internal budget twice by 80 percent leaves $1,344,000 in pay for the dozen lawyers. Applying these standard benchmarks, the wealthiest US foundation measures out a meager $112,000 per lawyer per year in compensation!

A columnist in InsideCounsel, Dec. 2007 at 84, must be in a small law department. Michael Baroni, the general counsel for BSH Home Appliances, writes about the saving graces of humor, which is especially important in small legal departments. Why there?

“[B]ecause it can offset the higher stress, longer hours and monotony of autonomy that lean teams often have to suffer through.”

A touch of solipsism there, I suspect. Any lawyer in the bee-hive of a huge department may be under just as much or more stress as a solo in-house counsel. The legal problems may well be more convoluted, more people have to be opposed, corralled or checked on, and the adversary may be implacable. As to hours, no one has published data that shows you work fewer hours as your law department grows in the number of its attorneys. Lastly, the “monotony of autonomy” is an odd phrase. I would think that a solo would have the fear of autonomy because there is no one else to consult, unlike in a larger department (See my posts of May 8, 2007 about stressful positions; and April 15, 2006 about solo GCs compared to Deputy GCs in large departments.). Some people thrive on responsibility and being able to make the decision.

Some of you in law departments wake up quickly, pile into work and tackle your tough problems before sip your Starbucks. Others of you, according to the Atlantic, Dec. 2007 at 28, rev up by the afternoon, push through past closing time, but can barely manage to open emails in the morning hours.

Our inner metabolic clocks operate on different time zones, and that fact affects how we think. Based on the research reported, “Early risers prefer to gather knowledge from concrete information. They reach conclusions through logic and analysis. Night owls are more imaginative and open to unconventional ideas, preferring the unknown and favoring intuitive leaps on their way to reaching conclusions.”

Not just cognitive styles differ between morning people and night people, but social behavior too. Assuming some truth to these findings, managers in law departments ought to bear in mind the internal clocks of people on their teams. You might hate 8:00 AM meetings, but others may thrive on them (See my posts of Nov. 8, 2007 on psychometric instruments, including those that plumb cognitive styles.).

If a company requires the posting of all position openings, shouldn’t the law department comply? “Absolutely,” says Paul Roy, the administrator of TimeWarnerCable’s law department. In his company, the legal department is required to let all employees of the company know about its openings. Posted positions are part of the cable company’s culture of transparency and equity.

Any position that is created or that opens up is posted with short summary of the job. Roy explains that the new position is open only within the company for a short time and then it is open to outside candidates. All the new positions are available online and are web enabled so that people can apply online. Usually the HR representative dedicated to the law department reviews the applications. The application process is confidential, so someone can apply and his or her boss doesn’t know. The posting must be up five days before the law department can make an offer to anyone.

Almost all law departments have a mixture of exempt and non-exempt employees. Lawyers and law department administrators are exempt because they have management responsibility; secretaries, records clerks, receptionists, and messengers are among those who traditionally are non-exempt.

Among two groups of law department employees there can be some grey area although there are guidelines to help determine whether a paralegal works as a clerical or professional. In the TimeWarner Cable law department, according to its administrator, Paul Roy, all the paralegals are exempt because they have a fairly high level of responsibility. In other law departments, some paralegals (or legal assistants) might not be exempt. The second type of employee where there may need to be a determination is the manager of a group of non-exempt employees. The litmus test has to do with the amount and kind of their management tasks.

The major difference between exempt and non-exempt employees is that non-exempt employees must be paid overtime if they work more hours than the statutory maximum and for that reason they must keep track of their time. Overtime is typically time and a half of base pay.

As a broad generalization, one law department that has more experienced attorneys than another department will probably be more productive. One might say that young lawyers bring energy and new perspectives, but I would put my money on those longer in tooth who have developed experiential judgment and who have accumulated a store of knowledge about the history, people and workings of their company.

But how can we quantify experience as between law departments? Add up all the years that the lawyers in a department have been out of law school. Then, count an extra year for each year those lawyers have been in that law department. Divide the total by the number of lawyers and you have a snapshot figure that is weighted toward experience with the company (See my post of Nov. 28, 2005 on the average age of lawyers in a set of law departments.). If a lawyer came in an acquisition, count them as if they had been with the company the whole time. The legal-tenure metric as proposed does not take into account any life experience of lawyers before they became lawyers. Perhaps the way to do that is to give them a half-year credit for each year before they became a lawyer on the assumption that at least they have more maturity.

I have never seen a benchmark like this compiled, but it would be an interesting metric to correlate against total legal spending as a percentage of revenue or against lawyers per billion dollars of revenue.

Here is a possible metric for in-house litigation managers. It combines of two measures that capture workload and complexity. The absolute number of cases overseen by a litigator would be one component; the other the total amount spent on outside counsel by a litigator. You would have to scale the two components, such as one to 10 cases equals one, 11-20 cases equals two, and so forth. At the same time, perhaps, $0 to $500,000 paid to outside counsel equals one, $500,000 to $1M equals two, etc.

It may be that the variety of cases is a confounding factor, but I think that the number incorporates this notion of cases covering different areas of law (See my post of April 2, 2005 regarding six litigation metrics.).

If you could gather enough data from litigators using the same scales – and possibly modify it according to the data you obtain – you could characterize the intensity of any one lawyer’s litigation load. The two scales normalize everyone’s data across the litigation group according to the two most important indicators of workload. My presumption is that there is some level of optimal effectiveness, above which more cases or spending is associated with diminished effectiveness.

If you know of a lawyer who has been seconded by a law firm to a client’s law department, would you share with me the level of lawyer, the time period, anything you can disclose about costs, and how well the arrangement worked? I will compile all responses, keeping all facts generic and anonymous, and both send them back by email to contributors and post the composite summary on this blog.

My previous forays into secondment leave lots of room for more information about this practice (See my posts of Sept. 21, 2005; Oct. 26, 2005 on reverse secondments; and June 13, 2006 on bilateral secondments.). At least five law departments have been noted here who have brought aboard secondees (See my posts of Sept. 25, 2006 on Minerals Technologies; Oct. 30, 2006 on Ikon Office Solutions; Feb. 25, 2007 on SAB Miller; Feb. 25, 2007 on Pfizer; and Oct. 21, 2005 on South East Water.).

Roll your eyes at this. In 1873 the all-male Supreme Court ruled 8-1 in Bradwell v. Illinois that women did not have the right to become lawyers: “The natural and proper delicacy which belongs to the female sex evidently unfits it for many of the occupations of civil life,” eight of the all-male justices intoned. The majority could not have dreamed of Justices, law firm managing partners, or general counsel who are women: “The paramount destiny and mission of women are to fulfill the noble and benign offices of wife and mother. This is the law of the Creator.” This incredible instance of judicial sexism came from the Am. Scholar, Vol. 76, Autumn 2007 at 88.

This blog has not skirted the managerial implications in law departments of gender differences (See my posts of Dec. 5, 2005 on differences as managers between the sexes; April 18, 2005 on Meyers-Briggs differences; June 6, 2006 on the general counsel of Graham Packaging; July 18, 2006 on more women becoming general counsel; Feb. 7, 2007 on men and anger; March 1, 2007 on WellPoint’s new female CEO, its former general counsel; March 24, 2007 on family-friendly departments; May 28, 2007 on Wal-Mart’s diversity and a reference to J.C. Penney; June 11, 2007 on male and female differences on power distribution; and Aug. 10, 2007 on the all-female team at Simmons Bedding.).