My client, a large player in Canadian private equity, recently lamented the state of the search industry. Unprompted, he said “You know, Adam, I used to be a big proponent of search firms, but I now feel that the big-firm model is broken.”
He went on to recount how a few months ago, he agreed to retain a global search firm after being impressed by the senior partner who’d presented to his search committee.
Little did he know that it would be the last time he would see or hear from that senior search partner.
As the search wore on, it became clear that junior associates whom he’d never met – however well-meaning they may have been – were doing all the heavy lifting, despite their lack of industry knowledge or insight.
“It’s not just that I feel that I got the ‘bait and switch’ – which I clearly had – but it’s that I now have no idea who’s actually representing me in the market. And I’m getting all of these sub-standard profiles of candidates who are simply not right for this role.”
This gave me pause. The client was someone I respect greatly. He had placed his trust in a senior practitioner, and yet my industry had failed him.
We’ve all seen it: The large, global firms tout their global reach, big database and large teams. It sounds really impressive, and clients expect that “big” will translate into more boots on the ground dedicated to their search. But this is rarely the reality. Yes, these firms are large – and their reach is global – but who at the search firm has actually been assigned to your particular search? How many other competing searches does this search team have to execute? Will your search team be focused on finding you a truly unique solution, or will you get recycled candidates since they’re stretched beyond capacity?
These are all important questions that clients should ask if they feel frustrated with their big search firm or if their needs haven't been met.
This also begs the question of how partners at a big search firm are remunerated. In many instances, it’s true that they are great practitioners – leaders in their field and fully committed to clients. But equally true is that partners at large firms are heavily compensated by the volume they sell, and much less so on the quality of their execution.
Here’s the average big-search firm model, in a nutshell: partners pitch and sell, and junior associates or researchers do the work. It’s typically the juniors who decide on your long list, and they’re the ones make the candidate calls. In many instances, they also draft your candidate reports. What’s more, there are more partners and fewer junior staff in a typical big firm (the "inverted pyramid" model) to keep costs lower and margins bigger.
It doesn’t take a detective to see that this can quickly lead to a lack of focus on what matters to clients: finding the right candidates quickly.
So if you’re considering retaining a big search firm, it’s also worth asking: does this search firm structure help your business, or harm it?
I think that, simply put, this structure is the very antithesis of client-centricity. In fact, it’s a key reason why some search partners decide to launch their own firms. In my experience, clients value search partners whose models are as different from big firms as possible since generalist boutiques offer dedicated, focused researchers and team members. Sometimes referred to as a "network of experts", these amazing people – seasoned researchers, each with more than a decade of search experience – work with senior search partners on one mandate in one given functional role or industry at any one time. In those instances, they tend to love what they do, they’re never overstretched, and they're true professionals who have clients’ best interests at heart. And after deciding on the most promising candidates, the team leaders make the calls into the market themselves to assess the candidates, leveraging their years of insight and experience.
Returning to my private equity client, he has decided to move on and now wants to work only with independent boutiques. What matters to him now is who actually leads his searches and whether that team will be dedicated to finding extraordinary leaders for him and his portfolio companies.
As he recounted to me his last conversation with his search committee as to his decision to switch firms, “in the end, I just couldn’t tell if the big firms were working in my best interests or their own.”
Couldn’t have said it any better myself.