Articles Posted in Talent

Three Canadian firms that provide lawyers to law departments for project work when needed are noted in the Canadian Corporate Counsel Association’s magazine (Autumn 2010) at 36. They are Cognition LLP, Delegatus Legal Services, and LexLocom. Cognition, the article notes, is five years old and has 24 lawyers. Delegatus, also five years old, has 15 lawyers.

It makes sense for general counsel to plug in a qualified lawyer for short or long stints if they can thereby put off a permanent hire and yet reduce outside counsel fees (See my post of Dec. 9, 2008: refers to GCA Law Partners (Mountain View, CA), FSB Corporate Counsel (Atlanta), Axiom (NY), Phillips & Reiter (Houston), and Paragon Legal (San Francisco); April 20, 2009: Yahoo’s shift from law firms to temp lawyers; and July 12, 2011: Paragon Legal with 60 lawyers available.).

If Rand Corporation says something about data, you have to give it much due. They are careful and they understand the difference between bits and pieces of numbers and reliable data. So, attend to this caveat: “Descriptive data on the use of contract attorneys and outsourced legal talent are even scarcer than data on alternative fee arrangements,” Rand’s researchers conclude in “An Early Assessment of the Civil Justice System after the Financial Crisis” (Rand 2012) at 35.

Benchmark surveys ask about numbers of legal staff, by all means, but they include contract workers only as a cost in the internal budget. Even if they are long-term and integral to the legal department’s capabilities, those workers aren’t separately numbered.

Absent reliable data, people who proclaim a “trend” toward more temps and contract attorneys base their claims on anecdotes or on what they believe should be happening, or wish were happening.

A survey now underway asks law department respondents, “What have you found to be the most common reason for people [presumably, just lawyers] leaving the business [presumably, the law department]?” The four choices offered on the survey deserve comment: “Career progression,” “s alary,” “join competitor,” and “redundancy.”

My supposition is that the most common reason why lawyers resign from their in-house position is that they have been offered a better position at another company. That would be “career progression,” and surely dominates the other reasons. The chance to become a general counsel lures many away.

When lawyers resign, it is unlikely simply to get paid more. They move to add responsibility or have more opportunity, which only coincidentally may bring a higher salary (See my post of April 26, 2012: external hires get 18% more pay than internal candidates.).

When companies do business in many languages, their legal department can help more when it has lawyers who are conversant in those languages. Multi-lingual capability is a topic this blog has addressed (See my post of April 26, 2006: managing lawyers who do not speak English as a primary language; Aug. 26, 2006: linguistic diversity in the Mary Kay law department; April 23, 2007: challenges of foreign offices include language barriers; Aug. 13, 2009 #5: only translate key provisions from agreements in another language; and April 29, 2009: Peter Wexler, of French-based Schneider Electric, doesn’t speak French.).

What hasn’t been seen until recently is a survey that asks respondent legal departments to count how many languages its team members speak. So, I read with interest one that asks these three questions:

“How many languages does your team speak? [In how many languages are they] Able to communicate with business people? Able to draft legal documents in.” Those are three levels of fluency in a foreign language and the data will make sense as one indicator of the capability of a law department.

Good reasons can be adduced for why a general counsel hires a senior lawyer from outside the department, but drawbacks to that decision persist. According to research reported in the NY Times, April 22, 2012 at BU7, external hires, “on average, make around 18 percent more money than internal employees with similar positions.” They cost considerably more “And yet they perform less well in the first two years and are also more likely to leave or be let go.” Not to mince words – less for more.

Lawyers, quintessential knowledge workers, exalt individual intellect and experience and diminish the contribution of a team, such as institutional knowledge, trust and support. Plopped into a new company, it makes sense that new hires consistently take more time to get up to speed than employers project (See my post of March 24, 2011: stars are more dependent on their supporting cast than they acknowledge; and April 26, 2011: teams add greatly to an individual’s talents.).

The Economist, April 14, 2012 at 76, writes that the current CEO of Honeywell took over in 2002. Rather than try to change values of employees, which are harder to measure, he focused on how to increase the frequency and effectiveness of a dozen important behaviors. General counsel can learn from this veteran’s success.

We talk profusely about “culture” in a law department, but we will make more progress if we pay attention to desired behavior. A culture of stewardship, as one example, translates less well into cost control than actions (behavior) that, for example, obtain and review budgets of outside law firms. A culture of teamwork sounds wonderful to extol, but the actual monthly meetings of Centers of Excellence go farther to promote sharing and collaboration and are easier to direct and evaluate.

How people act manifests itself much more clearly and concretely than what’s in their hearts and minds. The beliefs and values espoused in a law department stay amorphous; actions speak louder than culture and managers can shape them more effectively (See my post of Nov. 20, 2007: culture with 13 references and 3 other posts cited.)

Talent is so hard to find, recruit and keep that when one of your strong performers announces that they are departing to lead another law department, do you feel good for them or do you gnash your teeth? Deep down you realize that ambitious, capable lawyers won’t want to wait for you to retire or move on, but, still, the loss of a star hurts (See my post of June 24, 2007: mixed feelings when a strong performers resigns; and Dec. 19, 2007: inevitable departures of some talented lawyers.).

Be magnanimous. That should be your goal. Feel proud that you have groomed a lawyer so good that another company entrusts them to serve as their head of legal. Feel good that the lawyer is confident enough to grab the ring. Feel optimistic that you now have an opportunity to develop some other careers in your department.

Sometimes it is difficult for a general counsel to get objective feedback about personal performance. One source, tipped by an article in the ACC Docket, March 2012 at 69, could be the search firm that placed you. The source may strike you as strange, but if that firm has good connections with the CEO and Human Resources, not to mention other senior executives, it should be able to tell you how you are perceived. You can ask them after a few months to inquire discretely and summarize the early returns. The firm’s partner who inquires on your behalf will probably welcome the opportunity to reach out to executives and to help guide you.

Promoting a lawyer from within has the advantage of letting you promote or reassign others at the same time. Like adding a chair to the musical game, you create choices regarding other members of your department. If you bring in someone from outside to fill a vacated slot, no one else needs to move or has the opportunity to move. On the other side, a reshuffling of your staff, even if just one person, gives a bit of meaning to the hoped for “career path.” It breaks the logjam.

Another salutary result of an upward promotion is that it encourages you to think about the roles and careers of the other lawyers who are potential moves or promotes. It fuels succession planning. Finally, morale surely improves when lawyers see that the department builds and elevates its own talent.

An earlier post gave average in-house cash compensation for the five highest-paid practice areas: M&A, Antitrust, International, Intellectual Property – Licensing, and Tax (See my post of April 16, 2012: survey reports averages from $289,000 down.). That post focused on the relationship between cash compensation and the fully loaded costs of in-house attorneys per chargeable hour. Here, several other observations come to the fore (See my post of March 13, 2008: thoughts on that year’s group of highly paid practices.).

With something like half the law departments in the United States at four lawyers or less, they would not have a single one of these specialists. The data caters only to the very largest legal teams, those that can afford and keep busy refined experts.

Tax lawyers are not usually part of the legal department’s budget or headcount (See my post of Dec. 6, 2006: why tax lawyers don’t report to the general counsel.).