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High relation High relation
Adaptable Appreciative
High task Low task
Coaching Considerate
Energetic Encouraging
Interactive Patient
Involving Supportive
Resourceful Understanding
Appropriate behaviors Appropriate behaviors
Decisive Analytical
Directing Delegating
Determined Deliberate
Low relation Low relation
Forceful Methodical
High task Low task
Initiating Organized
Structuring Delegating
Structuring Reflective
Doing 100% of the job expected
The arrows and box
numbers 1 through 4 Note: Unless you are
show the progression managing in this area
both you and the of task controlling,
employee intend and you are probably not
hope for. At any time training your successor
performance falls ”it™s your future
off, drop to the next competitor, instead!
lower box.

1„2 3„4 11„4 11„2
Let™s Go 1

Performance level of the employee

Exhibit 10.3 Manager Feedback Approach Matrix

roles to roles that incorporate management responsibilities. This can be a
difficult transition, particularly in professional services firms, which tend to
value high levels of output for entry-level and early-career professionals.
These staff tend to fall back on individual producer habits, even after pro-
motion to manager. Eventually, the amount of work required cannot be com-
pleted by an individual, making leverage and management expertise critical.
Training and monitoring new managers to learn how to effectively achieve
results from their teams is a critical part of helping the new manager to suc-
ceed and avoid burnout.

The professional development mechanism, compensation structure, and career
plan for professional and administrative staff are one of the most important
236 Attracting and Retaining the Best Professionals

predictors of overall staff satisfaction and retention. These areas, however,
often get overlooked in the daily focus on sales, delivery, and firm operations
experienced by the growing professional services practice. It requires dedi-
cation and long-term planning on the part of the senior management team of
the firm to ensure that these areas are properly addressed.
The elements of an effective career plan should include clearly defined
levels, responsibilities at each level, and promotion criteria for achieving the
next level. Compensation ranges (and components) at each level should be de-
lineated as well. Compensation should be benchmarked periodically against
market rates and adjusted accordingly.
The skills required for each level as well as promotion criteria should be
consistently ref lected in the appraisal process. The appraisal process itself
should take place annually for all professional and administrative staff. New
staff should be reviewed at the three- or six-month point as well.
While compensation, benefits, career planning, and professional develop-
ment are a challenge to manage in the face of urgently competing sales and
delivery priorities, the near and long-term benefits of increased staff satis-
faction, performance, and retention will reward the attention paid to these
topics by the professional services firm.

David H. Maister, Managing the Professional Services Firm (New York, New York:
Free Press, 1993).

1. Ruth Benedict, as quoted by Margaret Meade in An Anthropologist at Work,
part 1 (1959).
2. Cuba Gooding Jr. as Rod Tidwell in Jerry Maguire, written and directed by
Cameron Crowe (1996).
3. Joseph A. Demkin and The American Institute of Architects, The Architect™s
Handbook of Professional Practice (Hoboken, NJ: John Wiley & Sons, 2001).
Professional Staff
Recruiting and Retention

Professionals, by their very nature, tend to be horrible businesspeople.

Numerous exceptions exist, and you need only to look at the hundreds of
firms in all professional industries to see examples of well-run, multijurisdic-
tional practices that generate significant profit for their partners and share-
holders and staff to see that the old adage does not always hold. But as with
many stereotypes, there is perhaps a grain of truth. Attorneys want to prac-
tice law, whether in the trial courts or the boardrooms. Accountants want to
crunch numbers. Investment bankers want to “do deals.” What they often do
not want to do, however, is involve themselves in the messy logistics of hiring
employees, leasing office space, buying computers, and the various and
sundry other tasks that are necessary to make the business, not just the prac-
tice, perform.

Why This Topic Is Important
One of the most time-consuming nonpractice areas for any professional ser-
vices firm is the hiring and retention of qualified and appropriate profes-
sionals. You have to find professionals to practice in the firm for there to be
any practice at all. And, for there to be a practice, the professional employed
in the firm must deliver. Therefore, the identification, hiring, and mainte-
nance of a qualified staff of professionals is critical to any firm™s success.1

238 Attracting and Retaining the Best Professionals

No professional services firm can maintain its reputation merely on the
backs of its founders or first generation of employees and partners. First,
such a strategy necessitates a small operation, and is difficult if not impossi-
ble to scale and grow over time. There is only so much that two, three, or
four people can do. Thus, any firm that rests its future only on a “cult of per-
sonality” around its founders can be assured of two things: very few clients
and a shelf life that expires with the retirement, or simply the aging, of its
founders. Speaking strictly from the idea of the future prospects of the firm,
there can be no more important function for a firm than recruiting and re-
tention. Simply put, the human capital of a firm must be constantly fed and
maintained. Otherwise, the family tree of a firm will wither and die. The
professional staff candidate today is the partner of the future.
Furthermore, recruiting and retention are critical not only for the future
of a firm but also for its present. Most often, client-switching costs between
professional services firms are low. If the firm cannot deliver qualified and
professional service, clients will “vote with their feet” and find another ser-
vice provider that can deliver what their needs entail. If the firm is not con-
stantly delivering (and improving on) the quality of its work product and
services, planning for a second generation becomes a moot point. Further,
the nature of a professional services firm is that the clients need you because
of a specialized body of knowledge that either cannot be performed within
the corporation or is not economical to perform in-house. For example, the
Securities and Exchange Commission (SEC) does not allow a company to
present its own audited numbers. An outside accounting firm must sign off
on the company™s financials for a stock to be publicly traded. In the same
manner, a corporation may have its own in-house legal team to oversee the
various issues that the company faces on day-to-day basis. But any corpora-
tion also will be presented with legal issues that it simply does not have the
expertise to handle. In that case, outside legal counsel is necessary. And
in both of these situations and others, the trust of the client is critical to
the success of the project. Whether public issuance of stock or “bet-the-
company” litigation, the client must trust its outside vendors with a major
project”and law firms, accountants, investment bankers, and others cer-
tainly fall into this category. Because of these issues, work product and trust,
the professionals delivering the services are the baseline by which the firm
will be evaluated. Therefore, every firm must have in place a process by
which professionals are identified, recruited, retained, and advanced. And a
significant portion of the nonpractice time and effort of any firm must be
dedicated to this process. This chapter addresses the recruiting and on-
boarding of professional staff; Chapter 10 addresses career tracks, compen-
sation, and advancement issues.
Most readers of this book will be familiar with the following categories of
professionals in any service organization:
Professional Staff Recruiting and Retention

1. Rainmakers
2. Specialists
3. Worker bees

Each of these categories is absolutely necessary for the professional ser-
vices firm (even the “misfits” category”you cannot know what works with-
out knowing what does not work). If the successful firm is to maintain itself,
each professional who is brought into employment must already know, or
quickly find, his or her proper place in the proper category, which is dis-
cussed more thoroughly later.
How does this happen? First, the members of the firm have to be ob-
tained”the process of recruiting. Second, the members of the firm have to be
kept where they are, which means that one way or another, they must be kept
happy”the process of retention.
In both recruiting and retention, institutional controls are critical. The
process must be uniform in all respects, even if the results of the process are
not. For example, it is likely that not every professional in a firm will be paid
the same rate of compensation. However, it is critical that the process by
which a compensation package is arrived at be uniform. Thus, the result can
vary from individual to individual. But the process itself, to be perceived as
fair by both incoming employees and ongoing employees, must be consistent.
Any other path is a recipe for employee dissatisfaction, defections, and, at the
end, disaster. The topic of compensation is covered in detail in Chapter 10.

Recruiting for Professional Services
Firms versus Other Businesses
Recruiting for a professional services firm is by its very nature distinct from
other businesses for several reasons. The primary differences between re-
cruiting for professional services and other companies are a lack of fungibil-
ity, compensation, personality issues, and work product liability.

Lack of Fungibility
Professional services firms exist to provide specialized knowledge that com-
panies do not have internally. Therefore, any professional who provides ser-
vices to the client, from the most senior partner to the most junior associate,
is in one sense the “face” of the firm. Also, each professional will gain some
knowledge of the client and the client™s business that another person will
not have upon being assigned to the client. For these reasons, a professional
240 Attracting and Retaining the Best Professionals

staff employee providing services for a firm is not an inherently fungible

This issue is somewhat self-evident: Because of a greater degree of educa-
tion, licensing or certification, and specialization, professionals are paid a
great deal more than other vendors of a corporation. They have paid a price
to obtain their degrees, licenses, credentials, and knowledge, often in the
form of school loans, missed business opportunities, and a heav y investment
of time in their career. Professionals expect to earn significant compensation
not only for their expertise but also for the price of being on call at the
client™s behest.
At some point in time, almost every client will question not only the fees
that it is paying to the firm, but also the value that the client receives in ex-
change for the fees. This presents almost an inherent conf lict of interest for
the managing partner of a firm. He or she must pay market compensation rates
to keep the firm™s professionals happy. But at the same time, the decision mak-
ers at the client will often wonder at the level of compensation that the pro-
fessionals receive and are likely to shop the competition if prices are too high.

Personality Issues
By definition, professionals are specialists who have a level of education and
expertise in areas that others do not. Some aspect of their personality
caused them to achieve a level of success, be it academic or otherwise. The
corollary is that professionals also often have an attendant part of their per-
sonality that makes them difficult to manage. For the sake of clarity, let us
simplify this issue by avoiding euphemism”professionals often have out-
sized egos that many other industries simply do not have or do not have in
the abundance that a professional services firm does.
Suppose, for example, that Company XYZ is in the business of making widg-
ets. The widgets are mechanical devices that are manufactured by piecing to-
gether a series of five separate components. Without all five components,
there is no widget, but the process itself of assembling the components re-
quires no specialized skill or knowledge. Company XYZ has a team of 10 per-
sons that assembles widgets, two persons for each component. All of these
people know the process by which they handle their own particular compo-
nent, but none of the others. Therefore, it takes at least five of the persons on
the team to manufacture a finished widget. Now, assume as well that Company
XYZ has a CEO who started the company making widgets in his garage and has
built the business into a multimillion-dollar enterprise. He knows everything
there is to know not only about assembling the components but also about
sales, marketing, accounting, shipping, and everything else necessary to run
Professional Staff Recruiting and Retention

the business. None of the 10 people who assemble the widgets have the same
level of expertise as the CEO, but the CEO has the knowledge and skill of all
10 people on the component team because he started out doing it all by him-
self. In Company XYZ, therefore, there is one person who is indispensable.
Also, there are 10 people who are in some form or fashion dispensable because
there is always someone who can do their job if they decide to leave, and they


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