Articles Posted in Talent

The Wall St. J., Sept. 15, 2007 at R6, explains a technology that helps people strike up conversations. Each person wears an electronic name tag, which contains a whole range of information about the person’s background, skills, job experience and interests. When a person approaches someone who has related characteristics – same school, same city lived in, same pet, or whatever – the badges light up and flash a welcome.

The article’s example is that the flash says, “Hi, Bob. We should be talking about biochemistry.” What a fascinating trick! Perhaps large law departments, who every few years bring together many strangers, might try this technique to overcome shyness and bridge separation.

In its latest compensation report, in Corp. Counsel, Vol. 14, Aug. 2007, at 80, the author notes that “Since 1993, corporations have been barred from taking tax deductions for any portion of an executive’s salary that exceeds $1 million.”

As general counsel salaries have risen over time and bumped into this tax cap, compensation packages have been shifting to more equity and bonus arrangements. Not that more reliance on pay-for-performance is at work, but cherchez les taxes. Even so, five of the 100 top-paid chief legal officers on the magazine’s list broke the million dollar mark for salary.

The general counsel of Simmons Bedding Co., Kristin McGuffey has three lawyers reporting to her according to GC South, July 17, 2007. When McGuffey started in 2001 the legal department of the Atlanta-based company consisted of only herself and one paralegal, but she has added three lawyers, another paralegal, and an executive assistant. As to the four lawyers, “They’re also all mothers, juggling the demands of work with the needs of young children.”

Lawyers who are mothers of tykes have not shown up so specifically on this blog, but there are references to women lawyers (See my post of May 28, 2007 on Wal-Mart’s diversity and a reference to J.C. Penney; June 6, 2006 on the general counsel of Graham Packaging; and March 1, 2007 on WellPoint’s new female CEO, former general counsel.).

I suspect the working relationships in a law department consisting of all women lawyers with young children differ markedly from a male-dominated department.

Lord Acton’s famous saying haunts general counsel, “Power corrupts and absolute power corrupts absolutely.” Bullying and unpleasant behavior can afflict leaders of the legal pack (See my posts of Aug. 4, 2007 about “jerk” behavior; and Dec. 31, 2006 on the “imperial” general counsel; June 28, 2005 on Gallup’s findings about disengagement; and Jan. 17, 2006 on passive-aggressive behavior.).

Worse, general counsel are not immune to alcoholism, drug dependency, depression, or paranoia. Any such affliction hurts them personally as well as members of their department (See my post of Jan. 13, 2006 on a trio of consequences of managerial incompetence; and March 18, 2007 on general counsel who are bad managers.).

To reduce the likelihood and consequences of personality or psychological disorders, some general counsel would benefit from a personal coach (See my post of April 14, 2005 on coaches for top lawyers; Sept. 25, 2006 on coaching compared to other forms of assistance; and July 9, 2007 and references cited.). More severely troubled ones may need therapy or medical intervention.

To find out what clients think about individual performers in a department, a general counsel might make it a practice to inquire. Not just to crudely ask “who is good?,” but to ask a series of senior executives exactly the same question: “Who do you think are the two or three strongest performers in the department and why?” If this canvassing covers a representative collection of clients, the general counsel will gain two insights: which lawyers are deemed strongest and by inference which are relatively weak performers.

On top of those two insights general counsel will obtain some indication of client satisfaction. What the clients say they value in the strong-performing lawyers undoubtedly applies to what they would like to obtain from all the rest of the lawyers.

A variation in larger departments is to ask the heads of practice groups to go out and do the same with their clients. A fruitful discussion should follow where the senior lawyers report back and the general counsel mingles in his or her own observations (See my post of Nov. 25, 2006 about InBev and its program.).

The McKinsey Quarterly, 2007 No. 2, at 31, gives examples of jerks and how some companies explicitly try to avoid hiring or keeping them. Some of the undesirable actions include blind copying, politics, parochialism, silos, and playing games.

Robert Sutton, a professor at Stanford University and the author of the article, lists his dirty dozen of jerk behavior: personal insults, invading coworkers personal territory, uninvited physical contact, threats and intimidation both verbal and nonverbal, sarcastic jokes and teasing to insult, withering e-mails, status slaps intended to humiliate victims, public shaming or status degradation rituals, rude interruptions, two-faced attacks, dirty looks, treating people as if they were invisible.

The article observes what is well known: high status occupations, such as doctors and lawyers, are notorious for egocentric and jerk behavior. Jerks are bullies and cruel and law departments should root them out.

John Donohue, profiled in InsideCounsel, July 2007 at 96, is the general counsel of Rhodia, Inc. He “rotates lawyers through various business units to keep their professional relationships fresh.” Who knows what that quote means; it seems like the argument for changing auditors periodically, so that the relationship between a business unit lawyer and his or her clients does not get too cozy.

A change of job scenery can also be professionally invigorating (See my post of Feb. 16, 2007 about three references opportunities for job rotations in position-open ad.). Lawyers like variety and challenges.

I don’t think Donohue’s quote it means that Rhodia’s lawyers do tours of duty outside the law department, such as McDonald’s general counsel, Jeffrey Kriendler, ran Boston Markets (See my posts of Jan. 25, 2007 about UPS paying for operations employees to go to night law school and then join the law department; April 8, 2005 about Manulife and its low success rate when lawyers move out of the law department; Aug. 14, 2006 where a new deputy general counsel had most recently been the chief auditor; Nov. 6, 2005 about Telstra; Dec. 15, 2005 on Merrill Lynch’s general counsel and MetLife’s general counsel; and Nov. 6, 2005 on David Krasnostein of the Bank of Australia, who ran its strategy group for a while.).

A highly-competent, high-performing lawyer can make a huge difference to a law department and indeed to a company (See my posts of Aug. 16, 2006 on super-lawyers; and March 16, 2006 on A-players.).

Many law departments try to identify very strong performers early and nurture them (See my posts of March 31, 2007 and three references cited; May 20, 2005 on the risks with a star; and May 7, 2006 on GE’s treatment of high-achieving lawyers.). In fact, succession programs are a muted and more comprehensive version of high-potential programs (See my posts of July 31, 2005 about succession planning; Jan. 4, 2006 on hallmarks of a robust performance management system; May 1, 2005 on sabbaticals and succession; Oct. 10, 2005 on internal competition.).

Special efforts in favor of a few are not without their problems (See my post of June 24, 2007on the pitfalls of high-potential programs.). The philosophical question has to do with the rightness of generally trying to raise all boats or investing in one or two to make them yachts.

The Harv. Bus. Rev., Vol. 85, March 2007 at 115, article on human capital management practices has spawned multiple posts (See my posts of May 11, 2007 with the first 9 practices and May 28, 2007 with the final 14; as well as June 10, 2007 on Leadership; June 11, 2007 on Employee Engagement; June 14, 2007 on Knowledge Accessibility; and June 30, 2007 on Workforce Optimization.). Here are my references and comments on the practices of the fifth and last category, “Learning Capacity”:

1. Innovation: “New ideas are welcome.” (See my post of Oct. 29, 2006 on creativity and references cited; and my article on creativity in law departments.).

2. Training: “Training is practical and supports organizational goals.” (See my posts of July 14, 2005 on training methods; April 13, 2006 on antitrust training; April 15, 2006 on role play; April 12, 2006 on university training programs for in-house counsel; May 1, 2005 on disseminating CLE learning; and Dec. 1, 2006 about law firms (rarely) training law-department lawyers.).

I referred in a previous post (See my post of July 25, 2007.) to a method for valuing stock options, which is called the binomial method. I just know in my bones that my loyal readers, all three of them, crave more information. So, here is an explanation of that calculation from the website of the New York State Society of CPAs.

“Historically, Wall Street has valued options using models such as Black-Scholes. Such models are primarily applicable to short-term publicly traded options, however, and may not be the best approach to valuing employee stock options, which tend to be longer term, nontransferable, and subject to various vesting requirements and forfeiture rules.

A recently discussed alternative endorsed by the current FASB proposal is the use of a ‘lattice’ binomial model which takes into consideration those characteristics associated with employee stock options.”