. 42
( 92 .)


also know that they do not have the knowledge that the CEO has.
In a professional services firm, most often all the professional staff have
the same basic education, the same basic licenses or permits to work, and have
undergone the same basic life experiences to gain those assets. Therefore,
they may not have started the firm and may never have managed a firm in
their life, but they still have the same baseline starting point as the managing
partner, who would otherwise be the CEO. Furthermore, they may also have a
specialty that the managing partner does not have (e.g., ERISA law) that is
necessary for the provision of services to the client. Therefore, that profes-
sional thinks that he or she is indispensable and should be accorded the same
compensation or other perquisites as the managing partner. Add to this the
unique structure of many professional services firms, and the problem deep-
ens. Many firms, unlike corporations, are partnerships. In some way, each
partner has input, if not a full vote, in how things are run. The end result is
that the managing of such egos can be difficult, and it takes a unique leader to
effectively run a business among “equals.” Chapters 9 and 3 deal with partner-
ship structures and organization issues in more detail.
The partner must evaluate any person being recruited with the idea that
that person would eventually take his or her place as a partner with the other
professionals. Therefore, if there are ego or team-player issues with a recruit,
they need to be immediately identified and may justifiably form the basis for
a negative hiring decision.

This issue cannot be overemphasized, especially if the firm is recruiting
younger staff direct from professional schools. Most professional services
firms have some type of fiduciary duty or quasi-fiduciary duty that informs
every decision they make concerning the client. Therefore, there is a fiduci-
ary or quasi-fiduciary liability that attends each person™s work for the firm.
If a “bad hire” is made in the world of commerce, productivity might go
down or a bad product might get shipped. If a bad hire is made in a profes-
sional services firm, the firm could easily be exposed to liability that could
threaten its existence.
Further, apart from legal liability, there is the issue of institutional repu-
tation. The clients of a professional services firm provide its lifeblood, and
without new clients the firm ceases to exist. But apart from selling the firm
to new clients, the existing clients must be serviced in a way that conforms to
242 Attracting and Retaining the Best Professionals

all applicable standards of care and conduct. Professional services firms rely
solely on their human capital to generate revenue. If the human capital is
f lawed, the client relationship is damaged and the institutional reputation of
the firm is at risk.

Retention for Professional Services
Firm versus Other Businesses
The concept of retention is viewed with disdain by many professionals. It is
seen as a New Age or “touchy-feely” addition into the firm, an unfortunate
consequence of the “me-first” mentality of the modern world. In almost
every firm, there is at least one partner who the associates refer to as “old
school” and who can always be counted on to regale new employees with sto-
ries of “how it used to be.” This person invariably thinks that the junior em-
ployees are paid too much, are asked to do too little, and have no idea what it
was like just to be happy to have a job, any job. This is the professional equiv-
alent of your father or grandfather telling you about having to walk to school
through five feet of snow, uphill both ways.
The truth of the matter is that this curmudgeon is 100 percent absolutely
right. Never before in the history of our country have new graduates from
school been paid so much in comparison to their (practically nonexistent)
level of experience. Graduates of the top business schools and law schools
often earn more money in their first year out of school than the top level of
salary that their parents™ supervisors made at any point in their entire career.
What the curmudgeon fails to take into account, however, is the im-
mutable law of market forces. Simply put, barring a nationwide financial cri-
sis, the salary level of new graduates from business, law, architecture, and
other professional schools is dictated by the market, and is not likely to de-
crease by any significant margin. Therefore, the concept of retention, while
unseemly to many veterans, is here to stay. Firms ignore it at their own peril,
because for the most part, young professionals always have a continuous mar-
ket for their services.
Because professional staff salaries are high and competition for profes-
sionals is so intense, firms have had to institute retention policies to keep
professionals in the firm once they are hired. This is distinct from many busi-
nesses for several reasons.
First, the “revolving door” that characterizes much of American business
is even more pronounced in the services business. Thirty or 40 years ago, the
expected career path of young professionals was to get a job with the best
firm that they could find and, once hired, pay their dues with the ultimate
goal of making partner, managing director, principal, or other appropriate
level within their industry. Once you made partner, in the former reality, you
Professional Staff Recruiting and Retention

had made it. And firms had a significant advantage over their associates in
keeping them”firms by gentlemen™s agreements did not “raid” other firms
for talent, and the stigma of being a “job hopper” was, for a young profes-
sional, potentially career-threatening.
Today, however, that world simply no longer exists. Professional recruit-
ing firms are so widespread that many of them focus on a single industry:
accounting, law, architecture, advertising, real-estate and so on. It is not un-
common for a lawyer in his or her first 10 years of practice to jump to as
many as three or four firms before settling down for a longer period of time.
Also, the cache of being made partner is not the Holy Grail that it once was.
Issues of quality of life, family time, double-income families, and entrepre-
neurship are now much more likely to dictate individuals™ employment deci-
sions than the prospect of multi-decade employment with a single firm.
With the revolving door now a reality, firms must realize that their own
business needs must take into account the damage that it can pose. Profes-
sional services firms, as stated earlier, rely on their work product and the in-
stitutional memory of their professionals to deliver their services. If a firm
becomes too much of a revolving door for associates and partners, the con-
sistency and quality of the work product suffers and the institutional mem-
ory of a client™s needs or eccentricities is almost nonexistent. Many managing
partners often hear the following refrain from clients: “ Who is this John
Smith? What happened to Mary Jones? She handled all of our matters before
and she knew what she was doing. Now I have to teach this guy everything all
over again.” The resulting extra billable hours (from loss of institutional
memory) and inconsistency of work product can irrevocably damage the
client relationship. In fact, the change-out of a critical professional can often
cause a client to reexamine his or her entire relationship with the profes-
sional services firm and possibly result in the loss of that client.

The Four Types of Professionals in a
Professional Services Firm
Having discussed the importance of recruiting and the differences in re-
cruiting for professional services firms versus other businesses, we now turn
to the nitty-gritty”the processes of recruiting and retention. This forces us
to break the inquiry into three parts. First, we identify whom the firm is
looking for and who it is that works for the firm. Then, we identify how the
target will be hired. Finally, we identify how that person will be retained
once he or she is hired.
Each of the individual phases of recruiting and retention is examined
more closely later. At the outset, however, we tackle a preliminary subject”
the identities of the recruits and employees.
244 Attracting and Retaining the Best Professionals

Although we have listed four types of professionals that exist in any pro-
fessional services organization, there are many more variations of the overall
archetypes. Each reader of this chapter will doubtless recognize some of the
persons listed. This list is a learning device for the professional to realize two
concepts: (1) Many professionals, even within the same firm, can be very dif-
ferent, and the way in which they are to be recruited has to be congruent
with their own specific personalities, and (2) the manner in which each per-
son views himself or herself within the firm can go a very long way to deter-
mining a successful retention policy. For you to successfully recruit and
retain the different categories, it is critical ahead of time to establish which
type of personality you are seeking. As can be seen, these levels are also con-
sistent with the “finders, minders, and grinders” described in Chapter 10.

The Rainmaker
This individual is often a grizzled veteran with an established book of busi-
ness in the beginning of the last third of his or her career or an ambitious
midcareer networker who is viewed as the future of the firm. The job of the
rainmaker is self-explanatory”it is to make the rain by which the grass
grows, that is, go get business on which the firm can execute. This person
must have social and communication skills to impress clients but also a base
of knowledge to convince clients to use his or her firm.
Many professionals like to think of themselves in this category, but in real-
ity, the number is far fewer than most people realize. You can test this theory
for yourself, even without access to the financial records of a firm. Simply go
ask a random number of partners in any professional services firm the iden-
tity of the firm™s top rainmakers. Then ask the same question of the associ-
ates or managers. The partners™ answers will most often vary widely, but the
associates and managers will nearly always name the same three or four per-
sons (in addition to their own direct supervisor, who can be discounted from
the survey). Three times out of four, the persons named by the vast majority
of associates will be the rainmakers who are responsible for a significant
percentage of the firm™s revenues.3

The Specialist
Often one of the most intelligent professionals in a firm, this person has a
profoundly deep understanding of one specific area of the firm™s services.
Often the area is one that is so complex that no other professional can ap-
proach the level of expertise required: tax, employee benefits, financial de-
rivatives, and so on. If the rainmaker is a jack-of-all-trades but a master of
none, then the specialist is “a mile deep and an inch wide.”
Specialists can be rainmakers and often are, particularly if their specialty
is arcane or their experience cannot be easily matched by other firms. For
Professional Staff Recruiting and Retention

example, a securities trial lawyer who is a former SEC director of enforce-
ment will bring in a significant amount of business no matter which firm has
the benefit of his services. At the same time, specialists also have the advan-
tage that at some point in time, all of the firm™s clients will eventually need
their services. For example, in a larger firm, the tax partner always will have
business regardless of his or her original orientation.

The Worker Bee
Ask any managing partner, and he or she will tell you that the worker bee is
absolutely critical to the success of the organization. But a careful distinc-
tion needs to be made between the junior-level work that all professionals
must perform early in their career and the organization and execution of all
the moving parts of an operation that another professional, more senior, must
perform to make sure the project gets executed. Both tasks encompass as-
pects of the worker bee, but the latter is far more important.
All professionals, at some point in their career, must play the role of the
worker bee, whether they have any aptitude for it or not. This is known, in pro-
fessional services and other industries, as “paying your dues.” For accountants,
there must always be the manager who is willing and able to spend months on
a used-car lot, counting the number of green sedans. For the lawyer, someone
has to pour through thousands or even millions of documents in the arduous
process of discovery, especially in a complex case. For investment bankers,
someone has to run the numbers backwards and forwards, sideways and upside
down, and pass that information up the food chain that informs the structure
of a deal. The war stories that every attorney, accountant, or investment
banker inevitably passes on to younger colleagues will more often than not
have their basis in the “dues-paying” portion of that person™s career.
But these low-level dues-paying tasks are simply part of the learning pro-
cess for any young professional. Everyone performs them, and, at some point,
the young professional must make a choice to either continue performing
them or move into the areas of rainmaker, specialist, misfit, or others. The
larger issue is identifying the worker bee who loves the role, who does not
necessarily want the spotlight, and has an incredible ability to perform the
role. This is the partner or managing director who has the ability to execute
on projects but not necessarily the skills or desire to perform the role of
rainmaker or specialist. And these persons, perhaps above all others, are
critical. They are the offensive linemen of a professional services firm,
blocking and tackling even if they never see the end zone with the ball in
their hands.
Unfortunately, worker bees may also not have many clients. They are by
definition profit centers because of the quality and quantity of their work”
as long as they are generating billable hours, they are producing a profit for
the firm. Worker bees also must perform the tasks that rainmakers have no
246 Attracting and Retaining the Best Professionals

patience for or that specialists do not have the breadth of knowledge to per-
form. What worker bees are not, however, are revenue generators, and this is
where they present particularly vexing problems in terms of retention. Rain-
makers and specialists will always be paid more than worker bees, just as the
star running back always gets paid more than the right tackle. But the running
back cannot score and cannot even begin to achieve success without the
tackle. It is the worker bee who performs the mundane tasks on which the
client relationship depends. So keeping the worker bee happy is critical to the
overall success of the firm.

The Misfit
The persons in this category are the source for many of the firm™s stories that
become part of the apocrypha of the firm culture. Any firm cannot know
whom they really want, who will “fit” into the firm, without knowing who
does not “fit.” The reasons for being a misfit vary as widely as the firms
themselves. A person who does not like to work long hours will never fit into
a “sweatshop,” and at the same time, a workaholic will never fit into a firm
that emphasizes quality of life over quantity of billable hours. Neither the
misfit nor the firm is necessarily right or wrong in either situation”it™s sim-
ply a matter of one person not fitting within the culture of a particular firm.
The issue when dealing with a firm misfit is to identify such a person as
rapidly as possible. The ideal, of course, would be to identify that person in
the recruiting process. In that perfect world, neither the firm nor the person
will waste any time in attempting to make a situation work that, by defini-
tion, cannot happen. But in the real world, this is not the case more often
than not. Every year, in every firm, someone gets through the process who is
a “bad fit” (referred to ironically as a PURE”“previously undetected re-
cruiting error” by staff of at least one firm). When this happens, it is incum-
bent on both the firm and the person in question to rectify the situation in
such a way that does no lasting damage to either the firm or the individual.
For example, if the workaholic is thrown into the culture of a firm that
prides itself on quality of life issues, it is likely that the problem will be iden-
tified by both the firm and the employee within a matter of six months.
Intuition would indicate that the best scenario would be to sever the ties
between the professional and the firm immediately, but this is not necessar-
ily the case. The firm, if it jettisons professionals too quickly, can quickly
obtain the reputation of being too “clubby” and a difficult place to work.
Further, the individual can obtain the difficult-to-overcome reputation of
being a job hopper or one with whom it is difficult to work. Neither the
firm nor the professional is well served, then, by an immediate severance.
The challenge is either to find a manner in which the misfit can carve his or
her own niche within the firm or to find a series of tasks and projects
through which the firm can obtain a reasonable return on its investment
Professional Staff Recruiting and Retention

and the professional can obtain a reasonable amount of professional develop-
ment before leaving for greener pastures.
Having now identified some of the personalities (and attendant quirks) of
the recruits and employees in a firm, the question now turns to how to re-
cruit them. Recruiting focuses on the importance of putting in institutional
benchmarks and cost controls for the following phases of the process:


. 42
( 92 .)