The failure of laterals to integrate well into their new law firms continues in 2014 as it has in the many years preceding it. For those firms that share the disappointing stories, the similarities are remarkable:
- The lawyer came in expecting senior staff (especially marketing/BD and professional development) and lawyers to cater to their way of doing things.
- The lawyer assumed firm partners would immediately introduce him/her to their clients.
- The lawyer made excuses for not being more financially viable or productive in year one. Or, the lawyer blamed others for his/her failure.
- The lawyer was never a fit.
HBR Blog Network published a new article called, "For Senior Leaders, Fit Matters More than Skill," that discusses research comparing executive hires coming from outside the organization v. executives being promoted from within. The HBR research shows how dramatic the problem is:
"Outside hires take twice as long to ramp up as a leader promoted from within. Astoundingly, C-suite executives report that only one out of five executives hired from outside are viewed as high performers at the end of their first year in house. And ultimately, of the 40% of leaders who are hired from outside each year, nearly half fail within the first 18 months."
HBR notes that "the direct and indirect costs of the failures are staggering, far exceeding the cost of the search that found the executive."
Law firm leaders instinctively know this, whether they formally track the sunk cost of unsuccessful laterals. Unfortunately, too many firms don't assign indirect – or even direct – cost to the resource-consuming unproductive lateral. It's too painful, because it often takes so long to get them in the door. Once they are on the law firm's terra firma, leaders hope that marketers and partners will rally around them stirring up a flurry of activity that turns into new work and new clients.
HBR studied more than 320 leaders in 36 organizations and found an unexpected answer to the question, why do these executives coming in from outside fail so often?
The answer is: "External leaders fail because they just don’t work well with the people on their teams."
Blogger Jean Martin writes, "We’ve seen this problem before – a new executive arrives at the organization, and a mismatch between his work style and priorities and those of his new colleagues, together with his inability to tap into informal and formal sources of organizational power, prevents him from being as effective in his new role as he was in the last. Within months, he is excluded from key networks and loses valuable information and leverage, quickly reducing his chances of succeeding. Isolation starts the downward spiral of underperformance."
Martin notes that leading companies are changing their hiring criteria, adding "network fit" to skills and cultural fit. Network fit means how well the new candidate will fit into the working style of his or her new colleagues. HBR research shows that "Hiring for this more colleague-centric type of fit can improve performance at the two-year mark by 30%. It has more than twice the impact of assessing only for general culture fit."
Ingersoll Rand has changed how it defines "executive fit." Ingersoll Rand noted that while the candidates all scored high on leadership, but had struggled "to apply those skills within the specific dynamics of their new teams and peer groups." So Ingersoll Rand changed how it was evaluating candidates and created "four new 'fit categories' — knowledge, values, career experience, and leader behaviors — which in combination produced a more complete view of the executive’s style and how she is likely to approach work."
They have two types of fit — "conformist," which is the same as the team, and "complementary," which "might be called for when the purpose of bringing in a new executive is to spark some productive disruption in the way the current team is working."
I think one of the most remarkable research findings came from Coca-Cola: The recruiters are evaluated on and must take responsibility for network fit. "The company requires them to report to management on not just how fast they are filling positions but also whether the external hire’s performance is up to expectations after they’ve been in role for one year. By reporting this 'quality of hire' performance metric the recruiting team ensures that, in all selection decisions, recruiters and managers ask not just 'Is the individual right for the job?' but also 'Can the individual perform on the job?'"
Companies like Coca-Cola have determined that the in-house recruiters have done a more effective job than the outside search firms – a challenge, indeed, to the external head-hunters. The research found that companies are beefing up their internal recruiting departments and arming them with the right evaluation tools. This results in a substantial savings (a drop of 40%) in not relying as much on outside search firms.
Firm leaders might think this type of evaluation is overkill for the rank-and-file lateral. But for top rainmakers, practice or industry team leaders, consider broadening your evaluation criteria to focus on network fit.
Simply, ask the question: Can this lawyer work well with others in my firm?