Internal Labor Market (ILM) analyses for large law departments

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.