Articles Posted in Talent

Jeffrey Pfeffer and Robert I. Sutton, Hard Facts, Dangerous Half-Truths & Total Nonsense: Profiting from Evidence-Based Management (Harvard Bus. School Press 2006) at 192-3 amass research evidence to show that leaders “actions rarely explain more than 10 percent of the differences in performance between the best and worst organizations and teams.” (Emphasis added; see my post of Jan. 14, 2007 on correlations and explanatory power.). In their view, most scholars of leadership agree “that the effects of leadership on performance are modest in most conditions, strong under a few conditions, and absent in others.”

Evidence to the contrary should cause a person to revise a prior belief – such as that the most important determinant of a law department’s effectiveness is its general counsel. I have believed that to be true (See my post of Dec. 19, 2005 about leadership as a key goal.) but must now reconsider.

Pfeffer and Sutton suggest three reasons why leaders make only a small difference. (1) constraints that they can’t change easily or at all, like the people in the department, the department’s role, expectations of clients; (2) similarity in education and outlook of general counsel, since most come from comparable socio-economic backgrounds, good law schools, good law firms, and clonish careers, a point especially true of internal promotes; and (3) law departments that need strong, influential leaders have the hardest time attracting them.

Jeffrey Pfeffer and Robert I. Sutton, Hard Facts, Dangerous Half-Truths & Total Nonsense: Profiting from Evidence-Based Management (Harvard Bus. School Press 2006) state at 91 that while “intelligence is the most powerful predictor of job performance,” that predictor seldom correlates more than 0.4 with performance (See my post of Jan. 14, 2006 on the best techniques to predict the performance of new employees.). When law departments try to assess whether to hire a lawyer, IQ might be toward the top end of correlation. The proxies for IQ are to some degree undergraduate and law schools attended and academic performance at those schools.

What I found even more revelatory is the author’s statement that the amount of variation explained by a predictor – here, intelligence test scores to predict job performance – is the correlation squared. Thus, intelligence accounts for no more than 16 percent of the variation in performance, leaving 84 percent unexplained. More broadly, whenever a statistical correlation is given, it is easy to figure out how much of the independent variable (here, IQ) contributes to the dependent variable (here, job performance). Sometimes its good to be square.

Jeffrey Pfeffer and Robert I. Sutton, Hard Facts, Dangerous Half-Truths & Total Nonsense: Profiting from Evidence-Based Management (Harvard Bus. School Press 2006) at 88 summarizes an “exhaustive” study of 19 methods that organizations use to select new employees. The best measure was general mental ability, like IQ and related measures of overall smartness. No law department that I have consulted to or heard of subjects applicants to an intelligence test or asks for scores (See my post of Jan. 1, 2006 on executive intelligence as a predictor of management level success; and April 27, 2006 on psychometric screens.).

Other strong predictors were work sample tests (try the candidate out on some parts of the job), job tryouts (do the whole job for a day or two), and structured job interviews (every candidate is asked the same questions in the same order). For employed lawyers, a job tryout would not be possible, but the other two methods could help in the selection (See my post of Jan. 1, 2006 on past behavioral interviews.).

The authors refer to emotional intelligence, note the controversies surrounding it, but do not include EI tests as an efficacious tool to select employees (See my posts of Nov. 13, 2005 on emotional intelligence, IQ and other attributes; and Dec. 21, 2005 on declines in EI over time.).

Wouldn’t it make sense a priori that many who obtain the two degrees – an LLB or JD and an MBA – would gravitate toward the overlap of business and law – a law department? Someone could pore through directories and gather some data on the incidence of in-house lawyers who have the combined degrees.

Or do such students value and excel at academics, which draws them toward teaching? Then again, being hardworking and disciplined, do JD/MBAs end up as partners in a law firm?

Or do none of these outcomes dominate, as joint degree holders chuck the law and move into business? The resident advisor on my floor sophomore year, Jim Koch, got a JD and an MBA from Harvard, and now is the CEO of Sam Adams Brewing.

Power corrupts and for some general counsel, secure at the top of the food chain, immersed in galactic issues, hobnobbing with rich and powerful Board members and executive VPs, flooded with invitations to declaim on their Olympian wisdom, pursued by journalists and puffed up by press clippings, it’s hard to sip lousy coffee from tin mugs with the NCOs.

But to the members of the law department, the physical presence, time, attention and concern of the general counsel has enormous importance. So, when GC Mid-Atlantic, Nov. 2006 at 9, profiled Henry Hopkins, general counsel of T. Rowe Price, it was refreshing to read that he “makes it a point to meet with each of the [16] attorneys in the legal department on a monthly basis, in the interests of promoting healthy avenues of communication and knowledge.”

“Promoting healthy avenues” may be purplish prose, but the idea stands: general counsel should all talk with their lawyers and paralegals regularly, listen to them (See my post of April 16, 2006 about the quality of listening.), and genuinely care about their well-being.

Why does the perception exist that career paths in law departments don’t match career paths in law firms? There may be more management roles in a large law firm, such as practice head of the environmental group or partner responsible for marketing, but given a large enough law department comparable roles are available. Once made a partner, there are no further law-firm promotions; other than the rare elevation to general counsel, there are no further promotions for senior inside counsel.

Aside from promotions, however, there are choices along the corporate way. Developmental initiatives mentioned by respondents to a recent law department survey, in Legal Week, Sept. 28, 2006 at 10, included “establishing a career development review process for high-achieving lawyers, introducing new areas of legal expertise and rotating lawyers around the department.” The general counsel of the UK’s Diageo, Tim Proctor, cited his taking two talented people in London and the US and having them switch jobs for a while.

The latest issue of Consulting, Vol. 8, Nov./Dec. 2006 at 17, states that at McKinsey, BCG, and Bain, the average consultant receives 81, 79, and 66 hours of training per year, respectively. I’ve not seen data from law departments that states time spent on training.

The consultants’ survey included many of the largest consulting firms in the US and summarized seven methods by which training is delivered (with the average percentages of the firms shown in parenthesis).

Formal in-house training programs (43.1%), professional workshops (17.0%), e-learning/online courses (15.7%), “informal learning (e.g., action learning, job & global rotation)” (12%), software/computer training (5.5%), university courses/academic training (4.3%), and other (2.4%). Law departments rely mostly on external CLE – not done in-house – and the informal, laissez-faire, OJT that is the intellectual equivalent of eat what you kill.

According to Robert Half Legal’s summary in Met. Corp. Counsel, Vol. 14, Dec. 2006 at 56, law departments should expect to pay for “midlevel paralegals with 4-6 years of experience” salaries in the range of $45,250 to $58,000. Departments should expect to pay “senior executive legal secretaries with seven or more years of experience” in the range of $46,500 to $60,500.

That means a paralegal and a legal secretary with roughly the same number of years of experience earn on average close to the same salary. I would have thought secretaries lag behind paralegals, but perhaps “executive” legal secretary implies more skills and higher pay.

The law firm of Greenberg Traurig numbers 1,650 attorneys in 33 offices around the world. According to Smart Bus. Miami, Dec. 2006, Cesar Alvarez, the president and CEO of the fast-growing firm, places great value on collaboration among his partners. At year end, every partner answers a few questions on teamwork, such as ˜Who has helped you? Who has collaborated with you? And who has not collaborated with you?”

A general counsel could adopt the same technique, and could even quantify the results. For instance, “For each of the other ten lawyers in the department, please rank them on a scale from 1 to 5 in terms of their collaboration with you last year.” People follow the money, so if their bonus depends on collaboration, here is a way to measure that contribution (See my post of May 14, 2006 on the difference between communication and collaboration.).

As defined by a task force’s recent report, a corporate attorney has an “extreme job” if the attorney works 60 hours a week and suffers at least five additional characteristics from a list of 10. According to the NY Times, Dec. 3, 2006 at Sec. 10, pg. 1, “These [blights] include fast-paced work under tight deadlines, responsibility for profit and loss, a large amount of travel, an unpredictable flow of work, and work-related events outside business hours.”

Pressure and pace, elite frequent-flyer status, spurts of over-work, and wining and dining all describe many a general counsel’s plight. The article doesn’t give the other five characteristics – perhaps a difficult boss, rapidly changing or stressful business environment, lots of people to manage – but it is likely that some direct reports to the general counsel also endure “extreme positions.”

Among high earners (defined as those in the top 6% of income levels) the task force estimates that about 20 percent hold extreme positions. Many senior corporate lawyers pass the income test, and they face the stress, burnout, and wreaked personal lives that dog those in extreme positions.