Bang! In-House Counsel Are Hitting the Roof

Meet Michael in the year 2004. A lawyer in his early forties, Michael is bright, energetic, and ambitious. He was just appointed general counsel of a big, international company. This is the job of his career, and he knows it. He wants to make a difference, and he sees big. He wants to transform the somehow discrete legal department into a strategic, proactive, highly visible department. He wants legal to become sexy, high-level, and entrepreneurial. What does he do to achieve his goal? He hires lawyers like himself: young, energetic, bright, and ambitious. And then, together with his team, he defines an inspiring mission statement, launches an innovative lawyers-specific management training program, conducts internal client satisfaction surveys to document growing client delight, entertains annual strategic retreats, and fights with HR to procure to his entire team company cars and other benefits.

Meet Michael in 2007. He has achieved his goal. The top brass in the company sees a true leader in him, and he now sits at the executive committee of the company. He as truly assembled a team of brilliant, enthusiastic, top quality lawyers, who provide truly valuable input. The legal department is highly regarded within the company, and at all levels, managers perceive in-house counsel as key business partners. Mission accomplished. Michael has succeeded.

Meet Michael in 2008. Michael is very worried. In just the first three months of the year, four of his “dream team” members have left the department. Two of them are still in the company, but one has become the manager of a new business unit, and the other has become the assistant of the business development director. The two others have left the company for general counsel positions in other, smaller companies. What’s went wrong? Nothing, actually. Michael did exactly what he had to do to build up a powerful legal department. The only problem is that in a profession where people are used to the “up or out” philosophy”, when there is no way up, the only option is to move out. Hire high potentials, put them in an exciting position, but sooner than later they will come with the question: What's next? That's the question Michael didn't really have an answer to. After three of four years in a position, ambitious professionals will start thinking a bit less about their job and a bit more about their career. If Michael wants to build a strong department for the long term, he has to think about developing a career path, or be ready to see his team go.

Career path in the legal department, hum...hum... That’s not too difficult if the company is growing, starting new business units, expanding internationally, or if the senior positions are occupied by baby boomers in their late fifties on the verge of retirement. But it is quite a challenge if the company has already reached its maturity size and does not create new opportunities, and the individuals in the senior positions do not plan to retire before another decade. If that’s the case, Michael will have to be imaginative to carve out career options that are sufficiently attractive to retain his high potentials for the long term (and horizontal mobility may have more to offer than the vertical one).

Alternatively, Michael will have to get used to the idea of periodically losing his “best and brightest”. Fortunately, turnover may not be such a bad thing after all. Of course, Michael will loose experienced professionals, familiar with the business of the company and the internal clients, but look at the bright side:

- Lawyers who leave the legal department to become business managers will most probably keep good ties with legal. They will become “good clients”;

- The legal department may earn a solid reputation as an incubator for high-potential individuals who then take managerial positions in the company. That may be a very powerful argument to attract candidates in the legal department, who know that after a few years, they may have the opportunity to pursue their career in a business function if they so wish.

- Lawyers on their way out also make room available. Especially if they where holding a senior position, their departure constitutes an opportunity for other, younger, ambitious lawyers in the department to move up… and stay longer in the legal department.

And what about you? What would be your recommendation to Michael to deal with his retention challenge?

Antoine Henry de Frahan