In my last post I noted at least anecdotal evidence about the
cost of losing existing talent, and today The National Law
Journal reports that
firms are taking steps to make it harder for headhunters to poach
associates, primarily by removing information about associates
from their websites—information as basic as direct-dial numbers,
email addresses, and biographical or practice-group data. The
first question this raises is simply whether it has any effect,
and the second, more interesting, question is how the market for
lateral associates differs in structure and function from the market
for lateral partners.
As to effectiveness, it strikes me as borderline desperation.
Jonathan Lindsey, managing partner at the recruiter Major, Hagen & Africa, sees an increasing restriction regarding associate information on firms’ Web sites and in the details they give law firm directories. Such an approach is “not a particularly useful exercise,” he said.
If a recruiter is so lazy, incompetent, or technologically challenged
that they cannot reach associates they want to in this environment,
they’re in the wrong career. Believe it or not, children,
but there were recruiters making good livings before the internet
was invented.
As to the market structure question, there are actually two "associate
lateral" markets—one to other law firms and one to in-house
positions. [Yes, there is also a "partner lateral" market
to in-house positions, but on an entirely different plane of responsibility,
and it is relatively small in scale compared to the associate/in-house
market.] Associates moving in-house is the easy case: Law
firms should love it when their alumni move in-house. This
is perhaps their single most fertile source of big-deal new business
down the road. Indeed, if this were the only market, law
firms would be insane to shield associate information.
That tells me that firms believe the lateral-to-another-law-firm
market is of far greater significance. Economically, not
only does the associate-losing firm forfeit their investment in
training and development (if any—a tale for another day,
or another year), which is captured by the "receiving" firm, but
they lose the present value of that associate’s future billable
hours. This is where it gets truly interesting.
For simplicity, let’s assume all associates fit into one of three
categories: I’ll call them schmoes, joe’s, and pro’s. Schmoes
are probably miserable themselves and firms are, relatively speaking,
miserable having them on-board. Losing a schmoe probably
raises morale all the way around, and since their billable hours
are likely to be both few and of low quality, the economic loss
is immaterial.
Joe’s are your journeymen associates: They’ll bill pretty
much your annual target, you’ll certainly make money off them,
but they aren’t on your A Team and are pretty certain to depart
before the up-or-out year arrives. The important economic
point is that joes are fungible. This sounds like
an inhumane thing to say, and it is (and joe’s know it as well,
by the way). When you lose a joe, you really have lost no
irreplaceable revenue; someone will come along to take his/her
place, and even if that person comes with a recruiter’s price tag
on their head, the cost/benefit to you of hiring them will, by
hypothesis, be positive—otherwise you wouldn’t replace the
loss-making joe who left. Again, no materially negative economic
impact.
This brings us to the pro’s: Partnership material by all
indications, these are the individuals you want to focus all your
coddling and grooming efforts on. Assign them to the high-visibility
matters, keep them amply busy but not going into cardiac exhaustion,
put them on display in front of your core clients, and, oh yes,
pray that they stay until the anointed year. Of course, "praying"
is not taught at business school as a management technique. The
care and nurturing of a pro is a two-way street: They are
delivering top-notch work, and your firm in turn should ensure
they receive a top-notch experience as they grow into their career. If
you do that, all the headhunters in the world can call, in vain. And
if you don’t, the pro’s know they’re good, and they won’t suffer
being unappreciated.
So come off it; put the info back up on the websites. And
why don’t you include the professional business-side managers of
the firm while you’re at it? Just because Jeffrey
Imelt doesn’t
generate billable hours for GE doesn’t mean they decide to keep him off their site.
