New England Biz Law Update
When a corporation brings in new talent, there are two risks: Fear that the company failed to hire the best attorney and fear that the company hired someone who will fail. These are distinctly different risks.
Mis-hires are expensive. Hay Associates once calculated that the costs of replacing an executive is 75 percent of base salary, when one calculates the costs of recruiting firms, the cost of management time to interview candidates, ramp-up time for the new hire, and lost productivity of current employees who must spend time with the new hire.
Lost time and money can be calculated.
There are significant intangible costs associated with mis-hires as well. The customer experience can be negatively impacted, thus harming the brand. The entire image of the legal department can suffer. Employee morale can suffer. Every time a general counsel mis-hires, there is a subtle erosion of CEO confidence.
Fear of mis-hire also drives acceptance decisions on the part of prospective employees. Prospective hires are acutely aware of the financial and career risks for them in mis-hires. The financial and career risks for them are greater than the risks faced by the company.
‘On-Boarding’ Programs To Reduce Fear Of Failure
Thoughtful "on-boarding" programs for newly hired attorneys are a non-cash benefit that strengthens the total compensation package offered. It goes into the same risk management compensation category as health insurance, life insurance, and disability insurance. Call it "career" insurance.
On-boarding programs provide structured systems to help insure success for newly hired professionals. Employee orientation programs are currently offered at many companies. These programs may include a brief history of the company, a review of key legal forms to be completed, and a review of regulations the company intends to strictly enforce. These programs are a small, necessary, and insufficient component of any on-boarding program.
On-boarding is not recruiter follow-up. All good recruiters say in touch with candidates and clients. But asking, "How are you doing? Anything I can do to help?" is not a systematic plan of action. Newly hired attorneys may not know what they do not know about the organization.
Our experience is that if a recruiter asks, "How ya doin’?" the newly hired attorney may truthfully report, "Everything is great." By the time attorneys realize they are in hot water and communicate it to the recruiter, it may be too late. And if they do report problems, how many recruiters are also skilled as organization development interventionists?
‘Going In’ Mandate
One approach to an on-boarding program is to structure a "going-in" mandate for the first 90 days of employment.
Professor Jack Gabarro of the Harvard Business School first used the term to describe new leadership succession at the CEO level. The going-in mandate states in writing, what is to be changed, what is to be preserved, and what is to be avoided.
The factor involving change has usually been discussed during the job interview. Sometimes new subordinates are so eager to prove that they can rapidly achieve critical changes, they may forget that it is first important for staff professionals to establish one’s credibility with line management to make those changes.
Newly hired attorneys sometimes fail to achieve political credibility because they fail to demonstrate that they understand the "guts" of the company. They treat operations like a Black Box that is not of their concern.
The problem with this perspective is that it fails to acknowledge that the most powerful centers of influence in the company live in this Black Box. Political credibility is often accomplished by initially structuring newly hired attorneys’ time so that they will quickly become familiar with the "guts" of how customers are served.
At one company, "customer service" is core to its differentiation strategy in selling a commodity at premium prices. All new attorneys spend a day listening in on calls that come to the customer service line, from billing to technical support.
At another company, the distribution system is core to its ability to sell food products to stores. Newly hired executives spend a day with a driver to get a feel for how the company services the customer at the point of customer contact. This process also reinforces to drivers their critical importance of their role to overall corporate success.
We want to stress the structured aspect of this intervention. The general counsel does not say, "One of these days you should spend time in customer service." The GC says, "On your second day of work, you will spend one day with Jane Smith at Customer Service. She is expecting you at 8:30a.m. I’ve made the arrangements."
Concerning what needs to be preserved, new hires need to be instructed on what should not be changed? Factors to preserve involve the following categories: technology, workflow processes, people, and cultural values. The more specific you can be at the front end, the fewer the problems later on.
For example, it is relatively easy to say: "The company invested $5 million in a new XYZ IT system that has proven sub-optimal. Management is not going to listen to recommendations for new systems until the current system is fully depreciated. Thus for the next three years, I want you to work within our existing IT platform. Avoid making recommendations for changing the structure."
As for what to avoid, another way to phrase it is, "Touch This And You Will Surely Die."
Here is an example.
A newly hired tax attorney met with the CEO of a major company. The CEO asked for a recommendation on a tax issue. The tax attorney proudly went through the various options available plus the rationale for his recommendation. The CEO quietly thanked him for his recommendation, told him that the recommendation was approved, and fired him!
The reason for the termination was that the tax attorney had grievously wasted the CEO’s precious time. He asked one question and wanted one answer. If he ever wanted to take a course on tax law he knew where he could enroll.
This is an example where the general counsel failed to warn his subordinate that the CEO hates working with people who are insensitive to his style of working. And that style is to be clear and succinct. If the CEO wishes to drill down for details, he can do so.
Summary
Fear of mis-hiring outweighs fear of failing to hire the best person for the job. A mis-hire poses risks for newly hired attorneys, the customer image of the company, line management’s perception of the legal department, and the general counsel’s political capital.
There are also measurable costs associated with mis-hire. A thoughtful program of attorney on-boarding can be a win-win situation for everyone. The purpose of an attorney on-boarding program is to provide a highly structured approach to reduce risks and increase the probability of success.
Dr. Laurence J. Stybel and Maryanne Peabody are co-founders of Stybel Peabody Lincolnshire of Boston, focusing on career excellence for leaders. There are 114 offices around the world.
