Treat Your Associates Like Mushrooms And....

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.