A series of articles in the Wall Street Journal last week discussed the trend in corporate America toward using analysis of data obtained through personality and other questionnaires from employees to guide better long-term hiring. The information obtained from employees coupled with their work histories gives employers, particularly of large workforces with potentially large turnover rates, a better predictive tool as to which potential employees are likely to stay longer, be more satisfied, be less likely to be dishonest and even be less likely to get hurt on the job.
Xerox used to rely on experience as its touchstone in hiring staffing for its call centers, preferring applicants who had done the job before. Then their analysis of employee data found that experience does not matter. Personality does. And six months later attrition was cut by 20%.
According to research firm Gartner, global spending on talent-management software rose to $3.8 billion in 2011, up 15% from 2010. And the use of this type of data in the workforce is expected to rise.
Not wanting to miss out on a potentially lucrative trend, a number of large tech companies have been so convinced of the usefulness of assessment data in hiring that they are buying the software companies that devise and conduct testing. Last month IBM agreed to buy Kenexa Corp,, which uses data analysis to help companies recruit and retain workers, for $1.3 billion. Oracle Corp. acquired job applicant tracking system company Taleo for $1.9 billion earlier this year and late last year SAP AG bought SuccessFactors, which specializes in performance tracking, recruitment and compensation, for $3.4 billion.
Admittedly, these companies are using personality data for jobs that are often lower-paid laborers, including call center and retail employees. But the economics driving the need for better hiring, lower attrition and higher work satisfaction are the same as those operating in the legal arena, where, if anything, there are even higher financial stakes at play.
And recent studies have made a good argument that more complex jobs are more amenable to good predictive personality data. Particularly for lawyers who often work autonomously, an early understanding of how new hires are likely to work and what personality attributes they are bringing to their job can be useful both to the firm and the practitioner.
Personality profiles for successful lawyers have been developed over the last few years, as well as assessments for screening them. Some law firms have reported good results with hiring by assessment, either using those proprietarily developed or off-the-shelf, and many others are investigating their possible use.
The objection that always arises from lawyers, being good lawyers, is the possibility of discrimination under Title VII or the ADA. Yes, assessments must measure variables demonstrably linked to job performance and even unintentional discrimination on the basis of traits like race, gender and disability can put a firm into an EEOC lawsuit. According to the Wall Street Journal, on September 4, "the EEOC released a draft enforcement plan for the coming four years that gives claims of systemic discrimination in recruitment and hiring, including pre-employment tests, the highest enforcement priority." But so far legal challenges are relatively rare–with only a reported 161 complaints out of 100,000 in 2011 related to testing, and the few that have gone to trial have primarily sharpened the point of the importance of job relatedness. A standard that a well-prepared assessment should readily be able to meet.
In truth, the more likely reason law firms are not availing themselves of a tool that could decrease dramatically their recruiting costs and attrition costs and facilitate more effective professional development is, as McKenna Long & Aldridge’s head of recruitment and development said, "they are concerned with stigma–what will [candidates] think of us? They don’t want to be different. We now have a market where firms could be more creative [about hiring], but lawyers don’t thrive on change."
Whatever one thinks of this new method of assessing candidates, experts point out, the old system–hiring based on academic achievement or work experience or interview impressions of congeniality or appearance–produces wild variations in the quality of hires and is demonstrably less reliable than the assessments.
As we pointed out in our 2009 entry "Sotomayor and Predicting Who Rises to the Top of the Lawyering Heap,"
Evidently LSAT scores, and not undergraduate grade point averages, are the best indicators of academic performance in the first year of law school, and academic performance in the first year of law school appears to be the best predictor of whether the new graduate will pass his/her state bar exam on the first attempt. There is also a very strong correlation between the personality attribute of pessimism and law school grades, i.e., the higher the pessimism, the higher the grades.
But none of these factors–undergraduate grades, LSAT scores, law school grades–gives us the key to determining who is likely to be at the top of the lawyering heap.
In that entry,we discussed the most extensive survey of success factors for lawyers, 26 characteristics in all, which identified more personality attributes than any other kind of characteristic. Yet we continue to use the sit and chat about our alma mater and golf game recruiting approach.
As we’ve suggested in our entry "The Outliers of Law–Embracing Heresy, " the single attribute–high class standing–that firms do look for may be the one that could well be jettisoned, or at least modified, with little impact on the quality of a firm’s legal services.
David Van Zandt, formerly Dean of Northwestern University School of Law, long entreated law firms to develop a better model for selecting recruits. "I’ve long advocated that firms really need to look at their data… and identify the characteristics that they’re looking for in their candidates," Van Zandt said, rather than "just go out and throw a wide net and pull people in."
Then in an attempt to insure loyalty when their hiring hasn’t successfully produced it, most firms resort to paying higher salaries–a remedy that is in most cases not effective. In fact, there is good reason to believe that higher compensation is often a waste of money–according to an analysis by the American Lawyer of their 2011 survey of midlevel associates:
"An examination of the results of our 2011 Midlevel Associates Survey shows that there is no statistically significant relationship between associates’ ranking of their compensation and benefits and their expectation that they will still be at their firm in two years… Our finding echoed a 2007 study that Indiana University Law professor William Henderson did based on our 2004 Midlevel Associates Survey—he also found that the relationship between compensation ratings and the expectation that associates would stay two more years at their firm was close to zero."
Why don’t we take the leap–stick our risk-averse necks out and try a different approach–perhaps for just one hiring season, and see how it goes? Instead of a stigma, we may find a more effective, committed, satisfied class of lawyers. Isn’t it worth a try?