Articles Posted in Talent

One allure of going in-house has always reportedly been that the hours are less than at a law firm (See my post of March 26, 2006 about a report by BCG that challenges this lure.). A recent study by Texas Tech University School of Law professor Susan Saab Fortney found widespread dissatisfaction with work hours among law department lawyers, according to Business Law Today, Vol. 15, May/June 2006 at 7.

The article says that “41 percent of corporate lawyers said they’d be willing to take a pay cut in order to spend fewer hours on the clock.” My suspicions are aroused. A better question would have specified the size of the pay cut because many respondents might have thought of small bills for big hours.

I note that 780 Canadian corporate counsel this year gave a “satisfied” or “somewhat satisfied” rating to “work-life balance” – a reasonably proxy for hours on the clock – slightly more than three-quarters of the time, according to In-House Corporate Counsel Barometer 2006, Canadian Corp. Counsel Assoc. at 5. Unless in-house lawyers north of 54’40” are markedly different than those south, it’s hard to square 25 percent unsatisfied with work-life and 41 percent unsatisfied with hours on the clock.

Human capital – “productive assets in the form of human competencies” – ranges from skills and assets that are specific to a company to those that apply in any managerial context. As described in the Harvard Bus. Rev., Vol. 84, May 2006 at 96, there are five rungs in this ladder.

Company-specific human capital includes what a lawyer knows about getting expenses reimbursed through a customized A/P system or the CEO’s long-standing belief in scorched-earth litigation. It is rarely portable.

Relationship human capital reflects an in-house lawyer’s familiarity with others in the department or in the company. The direct reports to the GC develop as a team, for example, or the Corporate Secretary is simpatico with the Board members.

Rebuilding the morale of the 60 or so lawyers at Computer Associates, a company that endured the ignominy of executive wrongdoing, the new general counsel drew on the experience of his former law department (Altria). At CA, Kenneth Handal ushered in several pro bono opportunities for his lawyers acccording to Corp. Counsel, Vol. 13, April 2006 at 94.

Admirable in its own right to promote pro bono service – such as to help low-income and needy families with such personal matters as divorces and to help AIDs sufferers prepare wills – it can also help bind together the members of a law department (See my post of Sept. 10, 2005 with some reflections on corporate counsel and pro bono work.) They all can share a commitment to doing good for others.

The former general counsel of GE, Ben Heineman says that “More than 60 percent of the [about 1,100] GE lawyers are diverse and/or non-US professionals. Thirty percent of our senior lawyers are diverse.” In the same piece, Corp. Counsel, Vol. 13, April 2006 at 89, readers learn that 40 percent of GE’s lawyers are licensed and practice outside the US.

Those diversity levels sound impressive, but I do not think of being “non-US” as a diversity category in the same way as being African American, female, Asian, gay, or Hispanic. If a white male lawyer in Spain counts toward US diversity, our general understanding of the term needs redefinition (See my post of March 28, 2006 on unwillingness to define diversity in law departments.)

Heineman goes on to summarize GEs “diversity tools:” (1) inclusion on slates, (2) sensitive headhunters, (3) summer intern programs, (4) mentoring, (5) stretch assignments, (6) work-life flexibility, (7) rewarding leaders for diversity efforts, (8) good metrics, and (9) exit interviews (See my post of April 4, 2006 on GE’s diversity council.) Except for 1 and 8, these are all broader “people tools.”

Like the flag and ET, who can fault “mentoring”? A wise guide, who shows you the ropes and pulls you along, the Beatrice for whom we all yearn. And all consultants, HR professionals, and career counselors gush about the virtues of mentors. Certainly push anyone successful enough to be asked, and they will pick out a shining mentor who lit up their life.

What could fizzle in this warm and fuzzy? For several reasons, I think honest-to-goodness mentors happen along rarely.

1 – Your mentor can’t be your boss

Many law departments award stock options to some or all of their lawyers. If companies pull back from doling out awards as generously as before, because the company has to expense the value of the option immediately, law departments will to that degree lose some of their compensation luster. Equity appreciation on those options would otherwise let them compete on comp with law firms (See my post of Aug. 3, 2005 about charging the cost of options to a law department’s budget.) .

Some companies offer arrangements whereby employees can buy stock in the company at 15 percent discount from market, which offers a small recompense.

But if law departments do not need to account for the value of option awards, the change in accounting treatment will harm departments less (See my post of Jan. 27 and April 23, 2006 on option values included in budgets.).

You will live longer if you give some thought to this statement: “brain health is now known to be the number one indicator of longevity….” Neuropsychiatrist Richard Restak, writing in the American Scholar, Vol. 75, Spring 2006 at 16, urges courses “aimed at teaching students ways of maintaining optimal brain functioning over their lifespans.”

Presumably, law departments that stimulate the brain health of their staff (See my post of Oct. 18, 2005 which allows that most of us don’t continually seek rocket science work.) will perform better or at least have lots of old alums.

Law firm partners face jolting changes when they join a law department at a senior level. Major disparities between partners’ experiences in a law firm compared to the department that they join relate to prestige, compensation, organization, communication, and management. The following are three interesting comments excerpted from Hildebrandt’s research interviews:

• “By comparison to the firm I left, this department is very segmented. We have no idea what other legal groups are doing, and there is very little overlap. We operate as silos.”

• “There is a bell curve applied to performance distributions because there is internal pressure from corporate to suppress rankings. There is no clear way of moving up on the scale, and they never move people down. This results in many long-time department members being over-rewarded in compensation, purely based on years of service, somewhat paralleling the old days of lock-step in law firms.”

Some tests, such as the Minnesota Multiphasic Personality Inventory (MMPI) screen out unwanted candidates, such as those who indicate a proclivity toward substance abuse or psychopathology, according to Business Week, April 14, 2006 at 89. Other tests screen in desirable candidates, as does the California Psychological Inventory.

Some tests gauge dependability, stress management and motivation (See my post of June 28, 2005 on Gallup’s test of engagement.). The five main personality traits assessed by such instruments are extroversion, agreeableness, emotional stability, conscientiousness, and openness to experience. (For more on psychometric instruments, see my posts of April 18, 2005, Aug. 21, 2005 and Oct. 21, 2005 on the MBTI; April 9, 2005 on Hartman-Kinsel; Feb. 7, 2006 on the Group Development Questionnaire; Feb. 7, 2006 on values assessments; and Jan. 1, 2006 on building on personal strengths.). The article claims that 30 percent of employers use a version of personality tests for hiring, so many law departments must be able to draw on them if they want.

Marsh & McLennan’s Viewpoint, Vol. 32, No. 2 of 2003 at 23, discusses a sophisticated technique that pulls together data about personnel to create an insightful picture about a pool of employees. Called an “Internal Labor Market” (ILM) analysis, if it were applicable to a law department it would start with fact gathering: “what are the rates of movement of employees into, out of, and upward in the [law department].”

Further, the ILM analysis looks at “how are rewards structured: years of service, performance, movement from job to job?” Fact based, an ILM draws on data routinely maintained in an employer’s HR databases. It incorporates information about how rewards are distributed, and how talent is developed. Clearly, the law department would need to be large – perhaps more than 50 lawyers? – for this technique to have a payoff.

One output of an ILM shows the numbers of people at each level, a graphical depiction of hierarchy. Another output characterizes a law department as a “tournament” reward structure, or otherwise. The point is that for major law departments, some or all of an Internal Labor Market analysis could help with hiring, managing, motivating, and retaining staff.