Solving the Multimillion-Dollar C Player Problem

By Caren Ulrich Stacy & Jeanne Picht — Originally published in the ABA Law Practice Magazine, May 2013 —

Law firms have a very expensive talent Problem: C Players.  These are the associates who lack judgment, write poorly, miss critical issues, or don’t take ownership. Partners write off their time and eventually stop giving them work altogether. Because that work still needs to get done, it is all too often dumped on A players, creating morale problems for the best associates. The C players linger until the firm eventually terminates them for low billable hours or poor performance. Or, in some firms, management invests in expensive course correction efforts. If the rehabilitation fails, the firm then often expends additional resources for outplacement. Whatever the final result, C players cost firms significant money and create extra work for partners and other associates.

C players are as expensive to hire as A and B players but deliver less profit, lower-quality work and require additional time and resources to manage—time that could be spent developing, advancing and retaining the A and B players. (See The Cost of a Single C Player below.)

As directors of lawyer hiring and development at major midsize and large law firms across the country, we have spent the last two decades living this C player Groundhog Day scenario: Hire. Develop. Evaluate. Correct. Evaluate again. Correct again. Shift work. Terminate. This dreadful routine can last two to three years before termination or a voluntary departure. In these times of doing more with less, this pattern is incompatible with the high-quality and greater-efficiency demands of today’s clients, and contributes, almost invisibly, to shrinking profit margins for firms.

But this problem can be minimized. Once we fully analyze its source, we can use various tools—such as talent data—in hiring and talent management processes to reduce the number of C players.

THE SOURCE OF THE PROBLEM

The C player problem exists for two main reasons. First, law firms seriously underinvest in the time and tools necessary to weed out potential low performers during the hiring process. Second, firms are incredibly slow to fire anyone. In short, firms don’t strategically “cull the herd” at any point in the talent pipeline.

See if this hypothetical law firm’s approach to hiring sounds familiar. The firm recruits associates from the same law schools year after year. When they add a school, it is usually because the newly elected managing partner or another bigwig lawyer in the firm went there. Or, when they drop a school, they typically drop a lower-tier school. After all, the top schools produce better lawyers—the ones who will effectively service clients and add value to the firm as partners in 10 years—right? The decision whether to modify the list of “accepted” recruitment schools is based largely on anecdotal information or internal politics.

And then, to choose among the candidates at these schools, the firm uses grades as a screening tool and a series of one-on-one interviews as the primary selection mechanism. The unstructured 20- to 30-minute one-on-one interview, which is mostly a free-flowing conversation about shared interests, allows the interviewer and interviewee to “get to know each other.” The interviewer is then asked to complete an evaluation with a checkbox at the end—hire, no hire or hire with reservations. Most of the time, if the interviewers “liked” the candidate, the decision is made to schedule an additional round of interviews or to hire the person.

Hiring decisions based on gut and intuition are problematic because subjective measures are not highly predictive of actual candidate performance. Ample research across many industries outlines the errors in using one-on-one or interests-based interviewing as the primary selection tool for performance. Studies show that interviewers get it right about 50 percent of the time using an interests-based interview. The same odds as a coin toss. Considering that a bad hire costs about $250,000 annually, these odds are not good enough.

This coin toss-style selection results in a new crop of entry level (and lateral) associates each year. Some are C players from the beginning, while others start strong and falter later because they can’t (or won’t) develop the ever-expanding skills set required at the next career stage. Either way, C players take developmental time and focus away from the A and B players whom the firm desperately wants to advance and retain.

THE SOLUTION

To remedy the C player problem, law firms must weed out the potential low performers during the hiring process by using objective talent data—not just gut decisions—that are specific to each firm. Firms must understand both the biographical factors (e.g., schools, grades, team sports) and the behavioral traits (e.g., initiative, adaptability, resilience) that define a quality associate in their environment. Using much of this same data, law firms can also strategically and more quickly identify and outplace current associates who are not meeting expectations.

The talent data you need to make better predictions about performance already exists in your firm. Every firm has lawyers who have set the standard for success. These are the A and B players whom firms wish to replicate through the hiring and development processes. And, as a critical point of comparison, every firm also has C players whom they don’t want to clone—but that they should analyze to avoid similar mis-hires. Because these high and low performers are already present, there is a treasure trove of biographical and behavioral talent data right in each firm’s backyard. This data provides the essential tools that firms need to cull the likely low performers from the hiring process and the current (or soon-to-be) C players during annual reviews.

SO, WHAT TALENT DATA DOES THE FIRM NEED? AND HOW CAN IT BE USED EFFECTIVELY?

Analyzing firm-specific biographical data. Analyzing a firm’s biographical data—most of which can be found on the current and departed high- and low-performing lawyers’ résumés and transcripts—helps answer the following foundational questions:

• Which law schools have produced the most, and the least, high- and low-performing associates and partners for a firm over the past 10 to 20 years?
• What are the differences, if any, between lawyers recruited through the summer program versus laterally, or in the lawyers who stay long term versus those who leave voluntarily or involuntarily after a short time?
• Which schools generate the most high-performing diverse lawyers?
• What are the specific biographical factors—such as grades, foreign languages, prelaw work or clerkships—that a firm’s current and departed high- and low-performing associates and partners have in common?
• How do the biographical factors of the high- and low-performing associates and partners differ by hiring source (summer associate versus lateral), office, practice group or other demographics?

The findings uncovered by a biographical data analysis provide essential screening information that a firm needs to effectively sift through the thousands of résumés received through on-campus interviews, write-ins and job fairs. Instead of relying on the hiring chair or a recruitment professional to make “educated” guesses about what matters, the firm will have objective data that increases the odds of selecting the candidates most likely to succeed in their specific firm. The firm also will have a clear understanding of which schools generate “stars” for the firm so they can make better strategic decisions about where to recruit and how to effectively allocate limited resources. This analysis is essentially Moneyball for law firm recruiting. (See Moneyball Analysis Reveals Unexpected Success Factors right-hand column.)

Analyzing firm-specific behavioral data. Analyzing a firm’s behavioral data creates a firm-specific success profile that can be used throughout the hiring and lawyer development processes. A firm’s unique success profile is built through an analysis of performance data (e.g., performance ratings, billable hours, realization rates) and the actual behaviors (e.g., adaptable, innovative) of the high- and low-performing lawyers, which can be uncovered through surveys, behavioral event interviews and skills assessments.

With this data, the firm can explore the answers to the following questions:

• What skills and behaviors do the most and least effective associates and partners exhibit at the firm? What are the “critical” versus “important” behaviors necessary for success at each stage (e.g., junior, midlevel, senior) in an associate’s career? How do the associates’ success traits differ from the income and equity partners? And what are the behavioral commonalities and differences by practice group, office or other key demographics?
• In examining the current and departed associates’ performance reviews and performance data (e.g., billable hours, realization rates), what are the commonalities and differences among the A, B and C players?
• Of the associates promoted to partner in the last 10 years, what are the behaviors and traits of the ones who have—and have not—become successful partners?

The results from this data analysis provide a clear and concise road map of the skills and traits that are critical—not just important—for success within each practice group and at every level of experience at a specific firm. By supplementing an interviewer’s instinct with real data, and training interviewers to use structured behavioral and panel interview methods, law firms have the ability to make better decisions during the interview process. (See “Effective Use of Success Traits Data” in right-hand column.)

Although the primary application of the behavioral analysis is to weed out the likely C players during the interview process, it also has development and performance implications. From this data the firm will know which traits and behaviors are (and are not) developmental in nature. For instance, Lawyer Metrics’ study of law students, associates and partners reveals that most skills, including initiative and teamwork, are developed over time, with training and experience. The firm will know which behaviors are priorities at each stage in an associate’s career so they can strategically focus the firm’s professional development money and efforts (e.g., training, mentoring and coaching). The firm also will know the critical traits associates need to advance to the next level in the firm, including promotion to income and equity partner, for evaluation and compensation purposes.

A firm can supplement its intuitive hiring and performance decisions by using this concrete talent data. And because the data already exists within the firm, the biographical and behavioral analyses can be done internally or externally with the help of knowledgeable talent management professionals and qualified quantitative experts. In fact, many firms already employ a number of these folks.

The more a firm invests in better tools to screen, select and develop its lawyers, the less it will spend on rehabilitating and outplacing C players. In the end, more effective recruiting and selection efforts free limited time and resources to develop, advance and retain the top talent of the firm.

THE COST OF A SINGLE C PLAYER

Lawyer Metrics’ research reveals the following about the cost of a single C player, as compared to an A or B player, in the midlevel to senior associate ranks at a typical Am Law 200 firm.

• Bills ~ 300 hours less annually (300 hours x $350 billable rate) = $105,000 in lost billable revenue
• Estimated at ~ 15 to 25 percent lower realization rate (300 to 500 hours x $350 billable rate) = $105,000 to $175,000 in lost billable revenue
• Takes ~ 10 to 20 hours of additional partner hours to manage fallout (10 to 20 hours x $600 + billable rate x practice group leader, supervising partner, evaluation committee chair, employment lawyer) = priceless
• Total loss in billable revenue annually: ~$210,000 to $280,000

EFFECTIVE USE OF SUCCESS TRAITS DATA

In PwC’s assurance practice, structured interviews are used to hire external managing directors and partners. After a comprehensive competency study of the critical skills necessary for success, the firm implemented behavioral questions and a balanced scorecard based on those success traits. The behavioral questions and scorecard are used for both candidate interviews and performance evaluations of their existing managing directors and partners. They have used this approach for the past two years to hire more than 100 managing directors and partners whose contributions have had a significant impact on the practice’s revenue growth. According to Courtney Moore, who leads executive recruiting for PwC Assurance, the practice has had a 90 percent acceptance rate and less than 5 percent attrition at the managing director level, with 0 percent attrition at the partner level, since the practice established a formal program around executive hiring.

Link to article: http://www.americanbar.org/publications/law_practice_magazine/2013/may-june/solving-the-multimillion-dollar-c-player-problem.html

About the Authors

Jeanne Picht is the Director of Attorney Talent Strategy at Fenwick & West.  She focuses on the strategic integration of all training initiatives and career development programs to enhance overall effectiveness of attorney development efforts across the organization.  She also establishes parameters for talent management data collection and analysis to optimize organizational and departmental decision making regarding human capital.

Caren Ulrich Stacy is the Founder of Diversity Lab.  She works with a team of talent experts, data scientists, and psychologists to create and pilot innovative talent initiatives that reduce bias and boost gender equity and diversity in law firms and legal departments.  

Both Jeanne and Caren were at Lawyer Metrics when this article was written.