A study described in the Harv. Bus. Rev., May 2007 at 64, looked at voluntary and involuntary turnover rates of proxy-level senior management, which often includes the general counsel, when a new CEO was promoted from within compared to hired from without. When there was an internal promotion, involuntary turnover in the following year or so reached 12.5 percent; when a new CEO joins from another company, involuntary turnover jumped to 26 percent, twice as high (See my posts of May 14, 2005 on job risks for the top lawyers when the CEO is removed; and Aug. 24, 2005 on the seven year itch of the GC position.).
As if that risk of job loss was not bad enough, the authors also looked at how well the departing executives fared in their next job. “Of the approximately 400 proxy-level executives who left following the arrival of a new CEO in 2002 or 2003, none moved to a proxy-level job in any large U.S. firm.” I wish there were data about the prospects of general counsel who are invited to leave when a new CEO arrives.
The bulk of the article outlines seven suggestions that will help general counsel respond to the arrival of a new boss and increase the odds of survival.