Pillsbury-Latham fiasco points to retainers as a solution to lateral hiring snafus.(legal recruitment)

The publicity raised by Latham & Watkins' planned hire of a lateral partner who, it turned out, had been investigated for alleged sexual harassment has naturally raised the issue of what level of due diligence should be done by law firms. It also raises some significant issues with regard to how law firms use search firms.

On September 3, 2003, Latham announced that partner Frode Jensen would be joining the firm from Pillsbury. Pillsbury followed with its own press release, which revealed that Jensen was the subject of sexual harassment allegations and that, to boot, his productivity had declined significantly. Latham was clearly surprised by the press release and subsequently asked Jensen to withdraw from a position at the firm that he claims would have paid him in excess of $1 million annually. (He has since filed a $45 million defamation suit against his former employer.)

While most of the legal community's attention has focused on Pillsbury's decision to issue a press release on such a sensitive topic, the failure of Latham (a firm that prides itself on its partnership vetting procedures) to uncover the underlying facts should also raise a few eyebrows.

Certainly, situations like the Jensen affair occur in corporate America on a regular basis. When embarrassing snafus have occurred, attention in the press often has focused on the executive search firm and the failure of that firm to uncover the dirty laundry. Even though Latham sources indicate that Jensen came to the firm through a recruiter, there has been no indication at all that the recruiter had failed to fulfill any due diligence responsibilities. That's largely because the legal search industry has evolved in a completely different way from the executive search industry that serves many of these law firms' biggest and best clients.

Business as Usual

Typically, the traditional executive search firm is retained by a company that is looking to fill a critical need, a vacancy that will cost the company significant dollars if the job goes unfilled for very long. The firm is hired exclusively, meaning that all candidates, including internal candidates and those already known to the company, are interviewed and evaluated by the search firm. The search firm not only handles all due diligence but also the negotiations relating to salary and benefits.

Contrast this with the way that law firms usually use legal recruiters for partner and associate searches. When a law firm decides that it would like to add a partner in a specific practice area, it often will contact its recruiters of choice, whether it be two or four or 20 recruiters, and tell them what they are looking for, adding a few key points about why the firm would be such a good catch for the candidate.