How Succession Planning Can be Your Secret Weapon

It takes more than money to win over the best legal candidates, says a new report from DHR Global. A strong succession plan can provide the growth opportunities that matter to prospects. Not only does it mitigate risk, but it boosts engagement and retention in the legal department.

June 17, 2022 – The legal market continues to be highly active in 2022. As the fight to attract and retain top-level talent rages on, organizations are looking for ways to distinguish themselves to candidates and retain current high-performing employees. While this has increased pressure on compensation ranges, money alone often will not drive a candidate’s interest in a position, say DHR Global partners Brandy Russell and  Maryanne Wanca-Thibault in a new report. “Instead, high-performing candidates are driven by growth opportunities — positions that will help them achieve their long-term goals,” said the study. “One way to provide candidates with the opportunities they seek, while also addressing talent retention and risk mitigation, is to employ robust and thoughtful succession planning.”

The benefits are numerous. Succession planning, said DHR Global, mitigates risks posed by unanticipated gaps in legal coverage. It also increases engagement and retention in the legal department. And it helps to attract top-level talent during the hiring process.

In the legal department, succession planning is not often seen as a top priority, given the number of urgent issues the team needs to address with their limited budget, said DHR Global. However, a well-thought-out succession plan can improve the efficiency of the legal department and their partnership with the business.

Addressing the Gaps

“To be an effective business partner, legal must understand the short- and long-term needs of the company, including what legal skills will be necessary to support its plans for growth and expansion,” said DHR Global. “The succession planning process includes a thorough evaluation of the business’s needs and the existing legal department, which identifies potential areas of exposure and gaps in coverage. Addressing these gaps helps to improve alignment and plan for the future, reducing the potential for risk.”

Succession planning also identifies emerging high-potential leaders within the organization who can step in to cover for an immediate supervisor in the event of an unanticipated departure or leave of absence. “This provides stability and continuity in legal operations from an insider with direct knowledge of the business,” said the report. “In short, succession planning protects organizations from disruptions, particularly in an active hiring market that may lead to unexpected attrition.”

The authors told of a general counsel of a publicly traded multinational manufacturing company who was preparing to retire but had no potential internal successor. Headquartered in a rural midwestern area, the internal hiring process identified a local candidate that the board rejected as “not GC ready.”

By marketing the position as a successor to the general counsel and working with the senior leadership team and the board of directors, DHR conducted a national search and identified a slate of seasoned attorneys with strong leadership and business acumen resulting in the selection of a board- and C-suite-approved assistant general counsel.

 Maryanne Wanca-Thibault has more than 30 years of experience as a consultant and advisor in the areas of leadership assessment, organizational development, and executive coaching. As a partner of DHR Leadership Consulting, she helps clients assess fit for executive, C-suite, and board positions. Her focus on the people-side of the organization comes from a deep interest in organizational behavior, communication, and helping professionals maximize performance.

“After an 18-month transition period partnering closely with the incumbent, the placement was seamlessly promoted to the general counsel position,” said the report.

Employee Retention

In this highly active market, engagement and development are critically important to keeping top-level talent. This is particularly true with respect to high-performing candidates who are looking for leadership opportunities, said DHR Global. “In April 2022, we conducted a pulse survey to gauge what percentage of the legal market was actively considering leaving their current position, and which factors were weighing most heavily in these decisions,” said the report. “Half of respondents reported that they were unlikely to move in the next six to 12 months. The top three factors keeping them in place were: fair compensation, opportunities for advancement, and involvement in strategic business decisions.”

“Candidates who see no path to leadership in their current positions are more likely to be actively pursuing or receptive to recruitment for other opportunities,” said DHR Global. “A well-developed and articulated succession plan provides emerging leaders with a defined career path to leadership positions within their current organization. It also signals to the legal department that the company is invested in their growth and development and will provide the training and exposure necessary to prepare them for advancement.”

Related: 4 Actions Organizations Can Take When a Leader Exits

In an active market with an abundance of opportunities, candidates can be selective about which opportunities they pursue. When a company is hiring into their legal department, whether for a newly-created position or to backfill an existing position, the focus is on the immediate need for coverage, said DHR Global. “However, if the position isn’t at the general counsel or chief legal officer level,” the study said, “candidates will be curious about the growth opportunities the position will provide.”

While meeting the requirements for the immediate need is paramount, a company that has the foresight to address development beyond the immediate opening will increase the attractiveness of the position in the market, particularly for top-level talent, said the report. “A succession plan can create a more detailed and tangible context for conversations about career progression within an organization, while demonstrating that the company values the legal function and is invested in the professional well-being of its members,” said DHR Global. “For candidates, this can be a clear indication that legal is an integrated partner to the business side.”

A Key Differentiator

In one case, said the authors, a Fortune 100 company with an expansive legal department developed internal guidelines and accountability metrics to promote representation of diverse populations across the organization, including within the legal department.

Brandy Russell is a partner in DHR’s legal practice group, focused on helping corporate clients find business-minded legal leadership to build efficient, solutions-oriented legal departments. She has experience leading general counsel and chief compliance officer searches, as well as searches for senior reports to the general counsel, such as regional/divisional general counsels, deputy general counsels, corporate secretaries, chief IP counsels, and chief securities counsels. Her legal and compliance clients include public and privately held companies that span a variety of industries including retail, consumer products, financial services, technology, insurance, and healthcare.

“Internal compensation benchmarking is slightly depressed compared to the market, creating additional challenges in the hiring process during an active market,” said the report. “Leveraging the company’s well-developed succession plan, which articulates development and advancement opportunities across all levels of the legal department, DHR built robust candidate pipelines and placed top-level diverse talent in emerging leader positions.”

In an active market, companies must adopt effective strategies to stand out from the competition and attract top-level talent, said the report. To candidates, a succession plan is what differentiates serious organizations with long-term plans and opportunities for advancement from companies without a clear direction or room to grow.

Creating a well thought-out plan for succession helps to align the legal and business sides of a company and prepare for inevitable problems, reducing risk and creating stability. “In the event of attrition, having a leader ready to quickly step into a new position leads to seamless continuity of operations,” said DHR Global. “High-performing candidates know they are in demand, and if they do not feel properly valued or see opportunities for growth and development in their current positions, they will be ripe for recruitment by another company. Providing a tangible plan for advancement not only helps retain top-level talent, but also makes an organization look attractive to new talent, which is essential for thriving in this market.”

Related: Keys to Leading Your Remote Teams

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media

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