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Should you light the match for superstars to leave?
By Geoff Kirbyson
March 17 2017 issue

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Law firms have long employed a cradle-to-the-grave career path for their top performers, but new U.S. research suggests letting superstar lawyers walk away to pursue other opportunities can not only bring an infusion of youth but also improve the bottom line.

Sydney Finkelstein, a professor of management and leadership at Dartmouth College in Hanover, N.H., spent a decade studying the world’s greatest bosses across 18 industries, including investments, consulting, advertising, fashion and casual restaurants.

Granted, he didn’t examine the business of law specifically but he’s confident that many of his findings are applicable nonetheless.

Their stories all had one common theme — it’s better to have the best people for a short time than average people forever.

Wanting to keep people until they retire and being afraid that they’ll leave for greener pastures at any point before that is an old and inefficient way of thinking about human resources and the workplace, he said. A more modern and strategic method for managing partners of law firms would be to consider helping some top lawyers spread their wings in a different way, such as going in-house at one of the firm’s clients.

“It’s a mindset shift,” he said. “It could be advantageous to help some associates get a general counsel-type job in a firm that could potentially be a client of cement a relationship with that client.”

In fact, the more your firm is seen as a great training ground and potential springboard to other opportunities, the more it will be seen as a “talent magnet” of a workplace by potential employees, he added.

Many executives consider an employee’s departure as putting an end to the firm’s return on investment on that person, including all of the costs associated with training and developing them. Finkelstein believes that’s short sighted because the firm should continue to manage that relationship well after they’ve left.

“We need to bring them into our network and look for opportunities to work together. Sometimes people get hired back [by their original employer] after going out on their own. The ROI requires you to change your time horizon from ending when somebody leaves the company to potentially a lifetime and you can continue to pile up the returns,” he said.

While it’s always important to keep an eye for future talent, Lisa Gelman, Toronto-based owner of Gelman & Associates, a 13-lawyer firm with six offices throughout the GTA, said her goal is to keep good people “forever.”

Not only should top-performing lawyers be bringing in a plethora of new clients and billing high revenues, but they’re teaching and training the next generation, too.

There are a number of factors that need to be weighed in trying to prevent lawyers from jumping ship, such as fair compensation, incentives such as bonuses for bringing in new clients and a flexible work-life balance.

“We don’t micromanage them. I don’t care when they walk in or walk out as long as they do what they need to do,” she said.

“My theory has always been that the more files they bring in, the better it is for the firm so they should profit, too. It’s a win-win or they’ll get resentful.”

Gelman feels the departure of a top performing lawyer can damage the firm, both in terms of morale and financially.

“If you’ve got a superstar lawyer, one of the reasons they’re a superstar is they do a certain type of work. If you lose them, you can’t take on that kind of work until you replace them. There are costs with retaining somebody new and integrating them into the firm and the firm culture,” she said.

Before coming up with a policy on how to deal with superstar lawyers, it’s best to make sure you’ve identified your definition of a superstar. Just because somebody has the highest monthly billings or is bringing in the most new clients doesn’t necessarily mean they’re the most valuable lawyer.

“That’s where some firms go wrong,” said Dal Bhathal, Toronto-based managing partner of The Counsel Network, a national lawyer recruitment firm. “That employee might not be a good cultural fit. If the firm has a real team-based approach to selling, cross-selling and cross-marketing and this person has an independent work style and mentality, over time that can become challenging because it’s contrary to the culture of the firm.”

It’s also important to consider whether a so-called superstar is helping mentor young lawyers or developing new initiatives.

For those who meet the definition, Bhathal said it’s crucial to develop a career plan and revisit it on a regular basis because star employees will want to continue to advance and develop. She said there are four phases that employees will go through on the job. The first is education where they’re learning everything from scratch. The second is engagement, where they’ve learned the ropes and are participating as active members.

It’s at this point that those career path conversations should be taking place, otherwise they’ll move to stage three — cruising.

Once they put things on autopilot, the firm needs to look at its options for getting the lawyer to re-engage, such as giving them more responsibility, adjusting their area of practice or considering complementary practice areas or niche areas.

“Star employees who get bored start looking elsewhere,” she said.

If they’re not brought back to the excitement phase by a new beginning, they often move into the fourth phase of disengagement, which is bad news, she said.

Bhathal said as much as firms like to ride their superstar lawyers as hard as they can, there may come a time when it would beneficial to take a temporary leave, such as gaining industry related experience as in-house counsel.

“A lot of times, we want to keep our star employees who continue to bill and the ones that aren’t as busy get seconded. But if star employees are getting bored or saying that in-house experience could be valuable, give them that chance to get it,” she said.

It can be particularly painful to let lawyers go when they work in practice areas that are suitable for spinoff firms. Ian Hull, co-founder of Hull & Hull LLP, a 17-lawyer firm with offices in Toronto and Oakville, said about 60 per cent of his lawyers who have moved on to other opportunities have opened their own firms and competed against Hull & Hull.

He is quick to note they all left on good terms and remain good friends and colleagues.

“Keeping many of them would have been a preferred route for sure but I’m not sure what I could have done to stop that entrepreneurial spirit from occurring. I have to be realistic,” he said.

Hull has several tools at his disposal to try to keep people on board, including focused branding for individual lawyers to help them develop their own market presence.

“If you create a business model around strong independent practices, I find people want to stay. I focus my branding globally as a boutique firm so there is an attraction with being focused with our firm globally but independent practices can still flourish,” he said.

Hull has been fortunate to have not had a negative experience with a departing lawyer because of the harm it could do to his reputation.

“If you’re perceived as a good lawyer and known for being fair and sensible with your clients, you should be fair and sensible with your lawyers. If there’s a public exchange over a blowup, it only hurts your reputation. Reputational risk in a small practice area is very serious,” he said.

Finkelstein isn’t suggesting his research means firms should want to lose an entire generation of employees but the sooner they realize there are going to be high-aspiration people who want to embark on new things to make their own mark on the world and they should be managed in a strategic way, everybody wins.

He believes his research will be increasingly relevant for law and other professional services firms as millennials, and their new way of thinking about careers, increasingly join the work force.

“The idea of somebody wanting to work at your firm for five or 10 years will become much more common than a lifetime career,” he said.

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