Articles Posted in Talent

The De Beers Group General Counsel, Glenn Turner will retire in mid-September and, according to the press release dated Aug. 26, 2005, “will be retained as a legal consultant to De Beers.”

Other examples of retired general counsel shifting to become a consultant to the company have crossed my desk. The arrangements could be part of a severance package, or because of the company wanting some transition experience to help the new general counsel (assuming one has been chosen), or because the retiring general counsel has irreplaceable knowledge about a particular legal issue.

A law department of about 70 lawyers electronically transmits a block of payables information each week from its matter management system to the company’s SAP system. It does so by sending the information to an intermediary server, from which an SAP crawler extracts the information and posts back to the server confirmatory data.

The law department follows this circuitous procedure so that it does not risk its attorney client privilege by disclosing invoice details. Paranoia and legal conservatism, I suspect – like the early worries about using e-mail — since so many people in a non-electronic world see invoices from law firms.

In 2004, “Carey’s board, a sharp group of investors and outside board members as well as insiders, decided they were dealing with too many outside law firms. They took the list of firms they were working with and selected a top group.”

Astonishing. The quote, from an interview of Carey’s general counsel, Gary Kessler, and a partner at one of the nine top firms (Metropolitan Corporate Counsel, Sept. 2005 at 8), astounds me. Imagine this level of involvement, or micro-management, by the board of directors!

If the board indeed took this step regarding outside counsel usage, was it not a slap in face for the general counsel? Did it not completely undermine his authority and at least on his previous decisions about outside counsel and their costs judge him critically?

The National Law Journal (May 9, 2005 at 15) reported that when Oracle completed its acquisition of PeopleSoft, “almost all of PeopleSoft’s 50-lawyer legal department” was laid off. I also heard that when Allied-Signal bought Honeywell, senior management told the merged company’s General counsel (Peter Kriendler) that the combined department’s budget would be the amount spent by the department that had spent more – significant layoffs must have followed. Two aerospace acquisitions I know of shrank the acquired law departments from 69 lawyers to 33, a bit more than a fifty percent reduction.

Other mergers cut less deeply. When El Paso Energy acquired Coastal, I recall the layoffs were less than a third of Coastal’s lawyers. The hard facts are that being acquired is likely to put most of the target company’s lawyers at risk.

Not every in-house lawyer dreams of becoming the general counsel. Not everyone wants to take on more responsibility and tackle tougher legal challenges. Some lawyers are B players, who have bumped into their ceiling and are content.

A career at rest by no means sentences the lawyer to a pink slip. The flow of work they are handling will continue, finding and training someone else exacts its toll, the cost of the plateaued lawyer will rise in step with the company average, and no one else is likely to be gunning for that backwater position or feel blocked by its incumbent.

It is a mistake to assume everyone in the department is or should be an ambitious hot shot.

No comparative metrics exist for comparing the quality of law department lawyers. What got me thinking was reading about the Law Department of New York City. That Department proudly announced that the percentage of lawyers joining it in September 2005 who graduated from one of the 30 top law schools as ranked by U.S. News & World Report was twice as high as the same percentage from the September 2003 class. Using directories, one could compare law departments on this dimension.

You could also look at the percentage who had clerked, served on a law review, or been an associate at an AMLAW 100 firm. If only we had LSAT scores and undergraduate GPAs.

Experts in human resources say that you should talk with your direct reports about their performance and then in a separate discussion talk to them about their compensation.

People are unable to get out of their minds what they’ve heard about dollars, and focus on how they can improve their performance if you couple the two topics. All too often, the pay message disappoints the listener, and defensiveness – at best – kicks in when they must then listen to what’s wrong with them.

The senior legal team of a global law department, in an industry-leading beverage company, makes it a practice to focus every quarter an hour or so on one or two lawyers in the department. The lawyer who supervises the lawyer prepares a summary of material and comments about the lawyer. During the “career spotlighting” session, the general counsel and his direct reports share their impressions about the lawyer and what career development steps make sense.

This excellent practice helps the senior lawyers develop similar perspectives on junior lawyers and chart a career development course for them.

Having just read about Reggie Martinez Jackson, the baseball slugger, and his unadvertised Latino background, and pairing that factoid with the larger finding from our census of how difficult it is to define many peoples’ ethnic background, how accurately do law departments define diversity? When law firms declare the percentage of their lawyers who are minorities, I haven’t read of a definition of who belongs to a minority and for what degree of consanguinity.

Is one-quarter Native American sufficient? Is one-eighth Jamaican a check mark in some box for scorecard purposes?

As I write this, a pang hits me of treading on political correctness. This post is likely to offend someone in a way that I can’t foresee.

As we watch the retirements of the baby boom cohort, the strata in companies where employees have been learning about their companies for 15 or 20 years and are in their late 50’s and early 60’s, law departments become valued repositories of institutional knowledge. Business managers ask the lawyers how issues were handled in the past …

That is, unless law departments endure the same exodus of experienced grey hairs. I have spoken with one government law department that is staring at the virtual certainty of watching its best lawyers take retirement, en mass and imminently. Something like 40 percent of its lawyers are retirement eligible in the coming three years. A tsunami rushing out to sea.

Law departments need to develop retention packages, keep a few key retirees as consultants, rely more on law firms, build robust knowledge management tools, train backup lawyers in-house, or otherwise cope with the coming talent void. (See my post of April 18, 2005 on the average age of US in-house counsel.)