Articles Posted in Talent

That small people are stupider than tall people is, dare we say, the long and the short of it. According to the NY Times Book Rev., Nov. 5, 2006 at 8, two Princeton economists have researched this and concluded that “the reason taller people make more money is that they are smarter.” Altitude = aptitude.

The book being reviewed shows that “people unconsciously ascribe positive qualities to the tall: in addition to being deemed more intelligent, tall people are automatically considered more likable, more dependable and more commanding.” My recommendation: don’t slouch.

But perhaps all this is the height of folly? Where oh where are the benchmarks regarding the altitude of general counsel?

It’s the rare in-house lawyer who raves that her department’s performance appraisal system is crackerjack. Like career paths and the adequacy of communication from the top, the annual evaluation process takes more than its share of lickings. According to the NY Times, Sept. 10, 2006 at BU 3, Watson Wyatt, the human resources consulting firm, found that only 30 percent of employees believe that their company’s performance review system actually improves performance. Watson Wyatt also found that almost half of employers thought that their managers were at best only slightly effective in helping underperforming employees to improve.

For many reasons, corporate lawyers dislike being evaluated. No one enjoys negative feedback, of course, which truism is exacerbated by the fact that most people overestimate their abilities relative to those of their peers. Lawyers rebel against the company’s standard evaluation form, which they denigrate as unsuitable to the kind of work they do — it’s a rating iron maiden. Evaluations that take place only once a year are too spread out to be specific and actionable; managers lose track of day-to-day contributions. For some people, evaluations simply don’t tap into what’s most important about their job. Others gripe that pay increases and promotions are unconnected to evaluations. And, finally, almost everyone feels they are too subjective.

Whether in-house counsel these days have less job security than in previous years is an empirical question. Journalists, executive search firms, and consultants play up the fragility of in-house lawyer positions (See my post of March 26, 2006 on reasons not to go in-house.). According to the NY Times, Sept. 10, 2006 at BU 3, facts don’t bear out this level of worry. Recent evidence from the Bureau of Labor Statistics indicates the jobs aren’t any more or less disposable than they were in the past. In fact, the median years of tenure with one’s current employer has risen steadily since 1983, from about 3.5 to 4 years.

Even so, job stability at publicly held companies has decreased markedly. Such companies only account for about one third of all business employment, but probably a much higher percentage of in-house lawyers. Until research proves otherwise, nervous corporate lawyers will attend too much to grim stories of layoffs – and not enough to un-newsworthy stories about long careers with the same department.

Every general counsel comes to realize that members of the law department are minutely vigilant regarding their every action and word (See my post of Oct. 24, 2006 about rumors.).

A short piece in the Harvard Business Rev., July 2006 at 152, put the scrutiny well: “You can’t totally manage the signals your send. Even if your intentions are pure and your performance flawless, don’t be surprised when your most innocuous statements are assigned deep, sinister meeting — or are assigned very different meanings by different people. But if you communicate consistently and clearly, especially in times of crisis, and don’t shy away from the tough issues, you’ll engender the trust and confidence that you need to succeed.” Well said and well to remember during the play.

We can expect law departments to report that pay inequality is increasing, as they give larger raises to their star lawyers and hold back increases for journeymen lawyers. A survey by the Corporate Executive Board found that “80% of organisations wanted to increase pay differentials. Those differentials could get a lot wider in the future.”

Further in the Economist, Vol. 381, Oct. 7, 2006 at 22, the more complex the job, the greater the variance in performance by workers (See my post of Aug. 16, 2006 on super-star lawyers.). High-level corporate legal advice, therefore, means yawning differences in performance, and that law departments desirous of keeping their standouts will award them larger slices of the compensation pie. Assuming the total compensation of a department cannot grow much, inequality will increase as the less skilled lawyers receive tiny or no raises and fall farther behind.

A recent item in Corp. Counsel, Sept. 2006 at 36 (by Sheri Qualters), says that Transcript Corp. identified a dozen general counsel who were appointed to head Russell 3000 or Canadian public companies since December 2004. Korn Ferry turned up more than 30 current or former CEOs among Fortune 1000 executives who had a GC stint. The article mentions Bill Merritt, now CEO of InterDigital Communications Corporation; Russ Strobel, now CEO of Nicor Inc.; and David Steiner, now CEO of Waste Management. And the Economist, Oct. 14, 2006 at 72, ran a profile on Philippe Dauman, the former general counsel of Viacom who was recently promoted to be its chief executive.

For more on promoted general counsel, see my posts of Jan. 27, 2006; March 13, 2006 No. 2; April 10, 2006 on sideways moves by general counsel; April 12, 2006 on British heads of legal; and Oct. 2, 2006 No. 3 with more examples from Europe.).

“Doubts are more cruel than the worst truths,” wrote Moliere, as he put his finger on the damage and explanation of rumors. Damage, because when people feel out of the loop and are worried, they fill the void with dark speculation and rumors. Explanation, because we all want to understand what is happening, and not to feel as if we are passive victims of fate; we also want community.

Not much happens in a law department that doesn’t hit the water cooler or instant messaging moments later. Promotions, who’s in and who’s out, shifts of responsibility, affairs, temper tantrums, paltry pay increases – all are grist for the rumor mill. The wisdom of crowds within law departments figures things out fairly accurately. People put observations together correctly, and little escapes the collective eye and mouth. The best antidote to rumors is truth, told directly and quickly.

Gresham’s Law: Bad money drives out good money, which is an application of adverse selection (See my post of July 14, 2006 regarding adverse selection and law firms.). When you cosset poor performers ….

Murphy’s Law: If something can go wrong it will go wrong (in Britain, sod’s law). When the vendor tells you it’s easy and quick to convert data from the old matter management system to the new one ….

Damon Runyon’s Law: “Nothing between humans goes off at odds of more than three to one,” as stated by David Warsh, Knowledge and the Wealth of Nations: A Story of Economic Discovery (Norton 2006) at 230). When you proudly announce a new compensation and objective-setting scheme ….

Not entirely silly, to be honest, because nothing succeeds like capable people.

But to assert that people are the essence of a law department is ingenuous. Without systems and organization, people flounder; without technology they bump along ineffectually; without processes they reinvent the hole in wheels; without support staff they waste their time; sans leadership they wander in the desert; take away culture and values and they roam as mavericks.

As the Germans wouldn’t say, “People über alles is dumkopf.”

Breathing another year doesn’t justify a raise or promotion; law departments should not promote people only because of time in grade, like social passing in schools. Well-managed law departments make an effort to explain what competencies are expected of their lawyers for each level of advancement (See my posts of Sept. 25, 2005 and Nov. 28, 2005.)

Being long in the tooth as a lawyer can have drawbacks. These include rigidity, reduced energy, attitudinal dysfunctions, and sometimes diminished productivity.

The gains from years of experience balance the ledger, as they include seasoned judgment, more patience, wider social networks, a longer-term perspective, and deeper institutional knowledge. (See my posts of April 18, 2005 on average age [35 in one department] and years with the law department; and June 12, 2005 and March 16, 2006 on knowledge management and veterans.)