Professional Staff Recruiting and Retention

Brant C. Martin

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

-Unknown

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 shareholders 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 practice 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 practice, perform.

Why This Topic Is Important

One of the most time-consuming nonpractice areas for any professional services firm is the hiring and retention of qualified and appropriate professionals. 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 maintenance of a qualified staff of professionals is critical to any firms success.1

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 impossible 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 personality 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 retention. 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 service provider that can deliver what their needs entail. If the firm is not constantly 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 companys 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 corporation 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 certainly 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, compensation, and advancement issues.

Most readers of this book will be familiar with the following categories of professionals in any service organization:

1. Rainmakers

2. Specialists

3. Worker bees

4. Misfits2

Each of these categories is absolutely necessary for the professional services firm (even the misfits category-you cannot know what works without 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 discussed more thoroughly later.

How does this happen? First, the members of the firm have to be obtained-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 recruiting for professional services and other companies are a lack of fungibil-ity, compensation, personality issues, and work product liability.

Lack of Funglbility

Professional services firms exist to provide specialized knowledge that companies do not have internally. Therefore, any professional who provides services 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 clients business that another person will not have upon being assigned to the client. For these reasons, a professional