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St. Louis firm Decipher vets Big Law recruits, explores other markets
DECIPHER℠ is an independent corporate intelligence provider which assists firms with reducing the risk of a bad executive level hire.
Greg Edwards, St. Louis Business Journal
June 29, 2017
Decipher, a St. Louis-based executive vetting firm specializing in the legal market, is 18 months old, targeting revenue of $1.5 million this year, and developing plans for expansion into other industries.
“Studies have shown that almost 50 percent of all law firm lateral hires will fail within five years,” said Michael Ellenhorn, Decipher’s founder and general counsel, with the cost of a bad hire ranging from 200 percent to 400 percent of the candidate’s annual compensation. “It’s incredibly expensive for these firms.”
Legal publication American Lawyer reported that 47 percent of lateral hires don’t stay more than five years, and others are “just muddling along,” not providing a return on the hiring investment.
The finding was based on how many of the 1,130 partners hired at the largest law firms in 2011 were still with those firms at the end of 2016.
Decipher serves as an intermediary service between the executive recruiter and the hiring law firm. The recruiters serve up the candidates, Decipher does deep background checks on them — including proprietary data reports and confidential source interviews — and the law firm decides whether to hire. “In effect, we hold a mirror up showing how a candidate is viewed in the marketplace,” said Howard Rosenberg, founder and CEO.
Rosenberg and Ellenhorn both worked for years in London. Ellenhorn, 49, a lawyer and a qualified solicitor in England and Wales, has a law degree from Washington University and an MBA from City University in London. Most recently, he was a legal recruiter and started the U.S. arm of the international recruiting firm Fox Rodney Search. Rosenberg, 53, was an architect and received an MBA at Cambridge University. Most recently, he was at the international law firm of Debevoise & Plimpton where he supported the firm's global private equity practice. Before that, he was the chief operating officer for law firm Baker & McKenzie’s Washington, D.C., office, and a managing director of London-based law firm Berwin Leighton Paisner.
“There are four risks in executive hires: business, legal, reputational and cultural,” said Ellenhorn, who added that the stakes are considerable with partners at global law firms averaging more than $1 million a year.
While most recruiters are paid for each candidate hired, Decipher is paid per assignment, about $15,000 each, promising a fully compliant due diligence investigative report within 10 business days. A lot of recruiters don’t like them, the founders said. “We torpedo a lot of their candidates,” Rosenberg said.
Decipher’s clients are primarily large law firms with international practices; it does not yet have clients in St. Louis. Ellenhorn and Rosenberg have plans to change that.
While 90 percent of its current business is with law firms, they plan to expand into other professional markets, such as accounting and private equity, and eventually corporations. In St. Louis, they see promise in financial services, agriculture and biotechnology.