Ten Things: Succession Planning for In-House Legal Departments

I want to discuss a topic of growing importance to in-house legal departments around the globe: succession planning.  It’s no secret that the population is getting older and the “Baby Boom” generation is starting to retire.  While a number of companies are working hard to put formal succession plans in place, there are many that are behind the curve.  Moreover, most company plans tend to focus on succession of the CEO or CFO.  Other key C-Suite positions are not receiving the same level of attention, or any attention at all.  In particular, the succession of the General Counsel is often relegated to “also-ran” status.  And within the legal department itself, there is usually little to no formal planning going on around succession management for senior or other key roles.  This lack of planning can lead to big problems down the road.

This failure to plan arises from two things: 1) succession planning is a low priority for the legal department given everything else going on; and 2) it’s hard to get started and it can seem overwhelming – meaning an early onset of “planning paralysis.”  Neither of these is a valid reason to fail to properly plan for succession within the Department.   The good news is that it’s never too late to get started and you can participate in the process regardless of your position in the Department.  Succession planning can be broken down into three parts: 1) evaluation of succession needs; 2) development of succession talent; and 3) putting a succession plan into place.  There a lot to cover, so grab a cup of coffee and get comfortable as this edition of “Ten Things” will take you through the steps needed to create a succession management plan:

1. Evaluate the short and long term needs of the company and the legal department.  The first step of succession planning begins with evaluating what the company will need in terms of legal services over the short term and the longer term.  You cannot plan staffing needs until you understand the types of legal services that are needed.  Start with the company’s strategic plans.  Most companies have 1, 3 and 5 year plans and the legal department should have access to those.  These will tell you where the company hopes to invest, grow, and expand either through existing products and services or through new ones.  They will also tell you any new geographic markets the company hopes to enter.  Additionally, speak directly with the leaders of the business and ask them about their specific business plans and ask how legal can help (and ask for reports or publications that discuss the future of their business or the marketplace).  Finally, talk to the lawyers on your team and what they see coming down the pike based on their day-to-day interactions with the business.

Once you know the strategic direction of the company, you can start to see the types of legal skills the company will need to meet those goals.  It may be you need more M&A skills, or attorneys with knowledge of specific products (e.g., data issues) or specific countries/markets (e.g., China) the company hopes to enter.  As you gather your information, you need to map that against what skills you have.  I suggest a simple matrix:

Legal Skills Matrix

Across the top you have the different legal skills your Department has or will need over the next five years.  You then divide that into “short term” and “long term”.  On the side you list partial, “got”, and need.  Using this matrix you can plot out the different legal skills you need for your Department along with whether they are skills you have (or have been must enhance) or whether you need to acquire them (either existing hires, new hires, or purchasing from a law firm).

2.  Evaluate likely turnover in the Department.  Next is an honest evaluation of likely departures from the Department.  At some point you will have attorneys who are going to retire.  It’s a fairly easy exercise to give yourself a visual of when people may depart thereby creating a need to find replacements.  I used a spreadsheet to track Department attorneys by age over the next 1, 3, and 5 years.  Here is a sample:

Based on the sample chart, you can see that there is a bubble in 2021 where several attorneys hit age 60 or older.  This doesn’t mean they will retire, but it tells you that you need to start making plans in the event they do.  You also need to think about those members of your Department who are highly-valued but are a retention risk, i.e., they may be dissatisfied for some reason (promotion opportunities, challenging work, etc.) or have highly-valuable skills making them likely targets to get “poached” by other companies.  Finally, be realistic about those who you do not think are making the grade and may need to be managed-out.  As attorneys leave – for whatever reason – don’t automatically think you must replace their skill set.  Instead, think about the longer term needs of the company and the Department and whether you should use the “open head” to hire an attorney with different skills – skills the company needs more of now or in the future.

3.  Create a talent/skills chart for each attorney.  As you drill into the needs of the company, think about the skills of each current team member and how these match up with what’s needed.  You also want to look beyond pure legal skills and start to measure “soft skills,” i.e., skills an attorney will need to become a leader in the Department and the company.  Basically, create a skills chart for each attorney that identifies that person’s legal skill set (e.g., litigation, commercial agreements, IP law, etc.) along with other skills you deem important for all attorneys in the department to have (e.g., business acumen, executive presence).  Then assign a numerical scale (e.g., 1-10) to rate the person on each particular skill.  If using a 1-10 scale, anything rated as a 5-7 is a target area for development and anything less than 5 is a red-flag that requires more immediate attention.  Skills in the 8-10 range can certainly be honed, but there is more to be gained for the company by focusing on the other areas.  Here’s a sample chart:

One soft skill I’ll note here is “Engagement.”  Engagement is a key marker of success and “engaged” employees are very valuable to the company, i.e., they are “keepers.”  Spotting them and developing them should be a priority.  Click here for more about employee engagement.

4.  Conduct periodic formal evaluations of each attorney.  Formal evaluations are core to developing in-house talent.  It needs to be regular, candid, and constructive.  The feedback should be about things the attorney does well, things they need to work on/improve, and whether there are any potential “show-stoppers” to them advancing in company/legal department – if that is their goal.   You can use the skills chart above as a starting point for an evaluation.  You and the employee may disagree on the scores and that’s okay.  The key is to have an honest discussion – and as manager be sure to really listen to what the employee is telling you about how they see themselves and things they wants/need to feel good about their career.  An excellent supplemental tool is a “360 review” because it gathers input from multiple sources, not just the manager. It’s important to distinguish that a “360” evaluation is not a performance review.  I sum-up the difference as follows: a performance review focuses on how well the lawyer did vs. specific goals set at the beginning of the year; a “360” evaluation focusing on behaviors and attributes that the Department (and the company) wish to develop in its leaders.  One is more operational, the other more strategic.

5.  Create a development plan for each attorney.  This is the most important part of succession planning, i.e., a development plan for the lawyers in the Department.  It is the culmination of the talent/skills chart and the results of the formal evaluation process.  In its simplest terms the development plan is the “road map” for the how the lawyer will develop the skills and attributes needed to fill gaps and become a senior leader in the legal department or, potentially, the next General Counsel.  Essentially, you will identify areas for development and things the employee can do to work on developing particular skills or attributes.  For example, you might want a litigation lawyer to develop basic commercial contracting skills in order to round out their experience.  Or a lawyer may need training in “managing” people or public speaking skills.  It’s also important not to try to do everything at once in the development plan.  You should focus on three (maybe four) things you think are the most important/critical for the lawyer to work on first.  Too many “goals” in the plan likely means nothing gets done or nothing gets done well.

A common roadblock to development arises in smaller legal departments.  Looking at it conventionally, it’s difficult, for example, to get “people managing” skills or rotate through different legal skill sets.  There just aren’t enough people vs. a large legal department where there may be 20 people in a “group” and several different groups within the Department (e.g., Corporate, Litigation, Employment, M&A, etc.).  It’s a challenge to be sure.  But, there are ways to get lawyers needed skills and experience even within small legal departments.   Here is a chart of some ideas to help you think creatively about how to get lawyers, especially those just a year or two into their in-house career opportunities to develop needed skills:

6.  Develop resources outside the Department.  Unfortunately, internal candidates don’t always fit the bill in terms of skills (or ability to learn those skills on the timeline needed).   In these cases, you will need to go external for the hire.  There are three ways to find talent externally: 1) a general job posting that invites people to apply for a position; 2) engage a recruiter (“head hunter”) to find you the right person; or 3) you and your team’s own “Rolodex” of who to call if an opening becomes available.   To save space, I’ll focus on 2 and 3.   Posting an open job will certainly get you a lot of resumes.  Unless you are very experienced in how to quickly cull through these resumes you will get a lot of unsuitable applicants.  Using a recruiter will get you a smaller pool of very qualified applicants much quicker.  It is expensive, but getting the “right” person is usually worth considering the cost of this route (along with the amount of time saved because the recruiter does all the logistical work).  One way to make working with a recruiter easier is to establish the relationship before you need them.  Introduce the recruiter to your culture and the things you are looking for in candidates.  Share your succession plans for the future with them.  All of this will allow them to “keep their eyes open” and be on the lookout for lawyers who might be a good fit if and when the need arises at your company.

In your career you will come across lawyers from your outside law firms that you think might make a good fit.  Keep a list of these people.  When an opening comes up, they should be high on your list to speak with about the job.  Most law firms have no problem with their lawyers going to work for clients (or potential clients).  Likewise, you have probably run into highly skilled lawyers while attending conferences, meetings, working for your competitors, or on the “other side” during a deal or piece of litigation.  Keep notes as they will also be people you’ll want to reach out to in the event of an opening in the Department.  Don’t forget to ask your own team for recommendations.  Like you, your team already knows what it takes to succeed at your company and candidates they recommend will have a high chance of being a good fit.

7.  Identify which jobs require succession planning.  Don’t feel you have to identify successors for every job in the legal department.  You don’t.  Focus on the critical ones.  The most important jobs will be the General Counsel and the heads of different groups (Deputy General Counsel for: Corporate, Securities Law, Litigation, Employment, key subsidiaries, etc.).  Beyond that, it depends.  For example, if your company is heavily into data, then the person in charge of legal issues around data privacy/security is someone you need to have a plan in place for in case they are no longer around.

For each position you identify you need a fulsome and current job description ready to go.  If you haven’t reviewed and updated the job descriptions for all of the legal department on a yearly basis, now is the time to dust off that project.  If the Department is not heavily involved in creating and maintaining job descriptions, you will get stuck with fairly generic and (in all honesty) useless descriptions cobbled together by someone outside of the Department who has no idea what is needed.  If so, the minute you need to start the recruiting process you will be wasting time trying to “fix” the job description on the fly.  Keep these steps in mind:

A good job description is a map.  It describes the skills and attributes needed to perform the role and is a tool that can be used for things like performance reviews, development plans, and – of course – succession management.  A job description should contain at least the following:

• Job title
• Job objective
• A summary of the general nature and level of the job
• Description of the job function and scope of the position
• Detailed list of duties or tasks performed that are critical to success
• Description of the relationships and roles within the company, including supervisory positions, subordinating roles and other working relationships
• The legal skills and attributes needed to be successful in the role

8.  Create a plan that identifies potential successors in the key roles.  Take all the work above and map it to the Department’s succession needs, i.e., for each critical position how do the lawyers already part of the organization line up as potential successors?  There are two common tools to use here.  The first is the “Nine Box” matrix and the second is a succession planning worksheet.  The “Nine Box” matrix is a tool frequently used to give a snapshot of “high potential” employees and those who likely have the “tools” to be future leaders or take on more responsibility.  It also shows employees that potentially do not have what it takes to stick around long term.  It does this by measuring “potential” on one axis and “current performance” on the other:

While it has limitations, the Nine Box will help you begin to figure out the talent succession pool.  Your “upper right” people are the most likely candidates for succession.  The second tool is the most important, i.e., the actual “Succession Planning Work Sheet.”  One key piece of information you will need before creating this document is whether the people you have identified as successors are actually interested in the job.  It doesn’t do much good to think you have the right person identified only to find out when push comes to shove that they are not interested.  The easiest way to solve this problem is to ask them (or better yet, have your HR rep be the person asking so you get more honest answers).  Now you are ready to create your worksheet, which sets out the position in question and the potential successors, including whether they are considered immediate, medium, or long term candidates.  It should also cover external candidates if possible or at least note what process to follow if external candidates are needed.  Here is a sample:

9.  Create a knowledge management/transfer program.  While the “people” part is the most important part of succession management you also need to spend time on the knowledge management process.  Anyone stepping into a new role will ideally have a number of transition documents to help with the move.  For example, a summary of key tasks they are expected to complete and the relevant due dates.   The basics are this:  capture the critical tasks, processes, timelines, and operations of the legal department on paper so that they can be easily passed onto any successors (or someone filling-in for the short term).  I suggest creating a series of short documents (1-2 pages) that capture all of the key aspects of the legal department’s tasks and operations.  For example, how does the e-billing system work and what is the monthly accrual process with Finance? Who are the key contacts and what are their phone numbers and email addresses?  What are the master passwords to all of the department’s systems and subscriptions? How often are the company’s policies reviewed and updated and who is involved in doing that for each policy?  To get this project underway, ask each attorney and staff person, over the next 30 to 60 days, to capture and catalog key discrete processes and functions in 1 to 2 pages each so they can be collected and are available should the need arise.  You then can organize the results by category or job function or however makes the most sense.  The goal is to have core and critical information captured on paper and available so people new to certain roles can simply follow instructions on what needs to be done, by when, how, etc.

10.  Work closely with HR.  It can feel a bit overwhelming to focus on succession planning, especially when there are so many other priorities in the Department.  A great resource is the Human Resources (HR) department.  They will have skilled professionals with access to information and tools to make the evaluation and planning process much easier.  Plus, they will help you tie succession planning in the Department to succession planning for the company overall.  This way there will be a consistent set of reports, metrics, and processes.  It will also raise the profile of the need and importance for a succession plan for the legal department.  Additionally, there may be a formal succession planning process that you can tie into.  Before beginning any type of succession planning, sit down with your HR representative and have a conversation about what you want to accomplish and ask how HR can help.   Then work closely with HR as you develop your plan.  Let them help you, do the legwork, set up reports and charts, warn you about traps, etc.  You do not have to do this alone.

*****

The wave of “Baby Boom” retirements, along with the influx of the “Millennials” into the legal department work force, means that succession planning needs to be front and center from here on out. Ensure that: 1) the Department’s needs are part of the company’s regular planning; 2) the legal department uses the tools and resources made available by the company/HR; and 3) you take the process seriously and make it a priority.  While time consuming to do properly, succession planning is a well-established process and you will “get the hang of it” fairly quickly.  The more challenging parts are the conversations you need to have with your team regarding skills, interest, retirement, etc.  While difficult at times, you will find that having these conversations and discussing succession planning leads to a better and more dynamic legal department.  Finally, regardless of your position in the Department, realize that succession planning is an opportunity for you to get noticed and get on the radar for a bigger role and get the training you need to succeed – either for your current company or for your next job.  Don’t be a bystander, seek it out and be part of the process.

Sterling Miller

January 16, 2017

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