ACQUI-HIRES AND LIFT-OUTS CAN BE REAL LIFE SAVERS
What if you receive multiple resignations from the same team at once, or a resignation provides you with an opportunity to assemble a new team? In that case, you have two options:
- Acqui-hire: An acqui-hire is when a big company buys a smaller company — usually an early-stage start-up — not to take over that business, but rather for the express purpose of acquiring its employees. This strategy was extremely popular in Silicon Valley — Yahoo! was a particularly big proponent — but it has fallen out of favour in recent years due to spotty performance.
- Lift-out: In this scenario, you “lift out” a group or team at another organization in its entirety. This approach can be quite effective. Indeed, research shows that great performers who move with their team become successful in the new company more quickly than those who move alone or are assembled as part of a new group. That’s because the team already works as a unit. They don’t need to get acquainted or iron out group dynamics. In a lift-out that is well planned and well executed, you’ll see a boost to your company’s bottom line almost immediately. A lift-out is not for the faint of heart, however. It’s one of the most aggressive moves you can make. Invariably, you’ll want to contract this out to a professional.
Of course, just as you can lift out a team from another company, another company can lift out a team from you. If that happens, quick action is required. You’ll need to
- Map out a legal strategy for how to respond with clients, suppliers, and so on.
- Collect, preserve, and analyze evidence related to the lift-out.
- Develop a factual narrative.
- Differentiate legal issues from business issues.
Even better, prepare for the possibility of a lift-out by doing the following:
- Periodically reviewing the contractual obligations that have been placed on employees
- Diversifying risk by spreading responsibilities to multiple employees
- Establishing a contingency plan to deal with a lift-out
- Identifying and protecting trade secrets and confidential information
- Constantly monitoring employees who access confidential information to reduce the chances of a lift-out and limiting who can access client lists or IP assets