Attracting the Best Partners to Professional Services Firms
For professional services firms, attracting partners from the outside is an appealing strategy for accelerated growth. However, this approach is fraught with challenges that can seriously damage a firm’s reputation if overlooked. Here, Russell Reynolds Associates highlights the common mistakes to avoid when hiring partner-level talent and how leading organizations successfully overcome them.
Increasingly, professional services organizations such as consulting, law and accountancy firms seek to attract external partners in order to accelerate growth in target markets. While potential talent often exists in-house in the form of rising stars, waiting possibly five years to groom high-potential professionals to adequate levels of ability and gravitas simply takes too long. However, drawing top-tier partners from outside has proved to be far from easy for three reasons:
- Loyalty. Non-competition and relationship clauses, attractive retirement schemes and long-standing friendships often make it very hard to extract a partner from his or her current firm. In addition, leaving a top- tier firm can suggest failure at that organization, a perception target candidates naturally wish to avoid.
- Slow decision-making. Professional services firms often make decisions based on broad buy-in across multiple stakeholders, each of whom will have his or her own view on what it takes to succeed. Gaining agreement on the myriad steps required for successful hiring of partner-level candidates can be exceedingly lengthy.
- Limited experience with the hiring process. Given the challenges with sourcing senior talent from the outside, hiring needs at the partner level generally are satisfied by promotion from within. As an unintended consequence, few professional services firms develop the requisite experience in attracting outside talent. A typical managing partner has conducted only one or two searches in the past. On the flip side, relevant candidates may not have applied for an external position for many years.
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Getting Senior Partner Hiring Right
The consequences of a botched hire at the senior-partner level can be significant in terms of how both clients and potential employees perceive the firm. To overcome the challenges mentioned above and to ensure a successful senior-partner hire, leading organizations focus on four phases:
The first step in optimizing external-partner hiring is defining a clear set of requirements that are realistic and aligned to the firm’s strategy. At the outset, it should be clear which requirements are “must have” and which are “nice to have.”
- Clarity and focus. As most partner-level hiring decisions are made by consensus, having a clear set of requirements is critical to focusing the decision-making process and reducing the variability in candidates selected and evaluator feedback. Leading firms identify the experience and competencies required, including expertise in a precise field, proven business generation, innovative thought leadership, strong people development and the right cultural fit.
- “T-Shape.” Leading organizations also look for candidates with a minimum level of expertise across many areas, coupled with the desired specialization the firm needs. This often is referred to as the “T-shaped” professional— i.e., the ability for an individual to “go wide” in many topics and “go deep” in at least one.
- Consensus upfront. It is essential to have broad buy-in once the requirements have been established before turning to the external market. Failure to do so can lead to confusion and multiple iterations of the search process, which is exceedingly detrimental to the firm’s reputation.
A carefully designed and creative search strategy for targeting specific organizations is critical to focusing on the best pools of talent from day one while maintaining confidentiality and preserving competitor relations as much as possible. Addressing the following items is critical to designing an optimal search strategy.
- Market leaders or boutiques. Is the firm looking for candidates from established global players and/or more entrepreneurial boutique firms?
- Alumni. Alumni of rival firms who have moved to the client side often are an attractive talent pool because competition clauses and personal loyalty no longer are an issue. How many years could potential hires have been out of the relevant business but still be credible?
- International candidates. To what extent is it beneficial to widen the talent pool by approaching candidates from other geographies? What is the minimum skill set, language capability and network required to take on such a challenging career opportunity?
- Value proposition. Persuading a senior partner who is flourishing in his or her current firm to switch organizations requires a carefully designed value proposition where the benefits of departure clearly outweigh the risks. All too often, we see firms failing to put the required effort into this critical component of the search. A more attractive compensation package, of course is a key element, but additional enticements typically are even more important such as management of an office or a practice, better knowledge management or a position with greater geographic scope.
Targeted Search Strategy
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The next critical step in optimizing senior partner hires is selection—i.e., how candidates are to be assessed.
- Carefully designed interviews. A well-defined interview process begins with an initial general introduction, which is intended to share information and informally assess cultural fit. Subsequently, another three or four interviews should be conducted with senior partners within the relevant geography or practice. Each of these interviews should focus on a specific requirement so that, collectively, detailed information on the candidate is gathered and repetition is avoided.
- Panel discussions. Conducted as early as possible, panel discussions are an effective means to thoroughly test the individual’s expertise in the desired practice area.
- Business plan. A critical part of the selection interviews is a business plan discussion to test if a solid business case truly exists for the new partner hire. Key assumptions for a realistic, quantitative business case include: the likely ramp-up period, applicable relationship clauses, and the time and resources it likely will take to build the right team.
- Consistent process. It is important that all external candidates follow exactly the same process in terms of interview format to ensure “apples-to-apples” comparisons and consistency. Ideally, interviews of multiple candidates take place in the same week to ensure the impressions of the first candidate have not faded by the time the last candidate has been seen.
- Upfront communication. Partner-level candidates expect a thorough, professional and systematic process similar to the one they went through to become a partner at their current firm. The interview process should be communicated upfront to avoid the impression that new criteria are being added along the way or that doubts about the candidate have arisen. The interview also should occur within an agreed time frame in order to keep the momentum high and the risk of confidentiality issues low.
- Assessment/psychometrics. Many clients like to include an external assessment or psychometric test, both of which add valuable and objective insights into leadership style, motivation, cognitive abilities and cultural fit.
- 360° referencing. A powerful selection instrument for conducting due diligence before moving to the offer stage is 360° referencing. The timing of the references must be chosen very carefully, balancing the benefit of additional candidate insight early on with the risk of exposing a candidate’s desire to move.
- Confidentiality. It may seem obvious, but even well-known firms make mistakes around confidentiality. In one instance, a candidate unexpectedly ran into a former colleague while interviewing with a firm on its premises. Handwritten registration books at the reception desk are another culprit. Complete confidentiality throughout the process must be guaranteed. This can be done, for example, by using code names for candidates or by interviewing at a neutral location to avoid undesired encounters with mutual acquaintances. The offices of executive search firms frequently are used for this purpose.
Key success factor
When the ink on the acceptance letter has dried, the hardest part begins. Proper onboarding is critical to the new hire’s short- and long-term success, as well as to the firm maximizing its return on the time and resources it has invested in the hiring process.
- Senior leader support. Senior leadership should send clear signals that it wants the new partner to thrive. This should include frequent investment in social events such as lunches and dinners.
- Multiple introductory meetings. Success in a professional services firm is dependent upon collaboration and teamwork. The faster a new hire is introduced to those with whom he or she will interact throughout the course of business—across all functions, practices and geographies—the sooner he or she likely will begin delivering results. Nevertheless, it may well take one or two years before the partner is fully up and running.
- Proper training. Many firms make the mistake of assuming that, because of a new partner’s seniority and experience, he or she does not need formal training. However, every organization is different. Therefore, extensive education around the firm’s values, culture and systems should be provided as quickly as possible, especially given the expectation for new, experienced partners to generate fees as quickly as possible.
- Top-tier support resources in place. Never underestimate the importance of the (seemingly) little things. Be sure to provide top-tier support resources to new hires—such as an assistant, office, electronic equipment, car—and ensure all are in place and operational on the start date.
In-Depth Client Understanding
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Our Business and Professional Services Practice
The Business and Professional Services practice at Russell Reynolds Associates specializes in partner hiring and leadership succession for professional services organizations around the world. Many of our consultants have extensive prior experience in professional services, bringing valuable insight into how a candidate’s cultural fit, leadership style and motivation must align with the culture and structure of these types of firms. Working closely with our experts in financial services, healthcare, consumer, industrial/ natural resources and technology around the world, we are able to identify the best candidates for our clients’ specific requirements. In addition, we are able to draw on the specialist assessment services of our Leadership & Succession practice to provide further insight into the behavioral traits, leadership development requirements and potential culture fit of specific candidates to help ensure a successful hire and transition.
Hans Reus co-leads the firm’s global Business and Professional Services Practice. He specializes in business and professional services, technology and sustainability market sectors.
Russell Reynolds Associates
Leadership for a Changing World. In today’s global business environment, success is driven by the talent, vision and leadership capabilities of senior executives.
Russell Reynolds Associates is a leading global executive search and assessment firm with more than 300 consultants based in 40 offices worldwide. Our consultants work closely with public and private organizations to assess and recruit senior executives and board members to drive long-term growth and success.
Our in-depth knowledge of major industries and our clients’ specific business challenges, combined with our understanding of who and what make an effective leader, ensures that our clients secure the best leadership teams for the ongoing success of their businesses. www.russellreynolds.com