This blog:
• is not associated with DHR International, Jobplex, Osprey Capital or the Hoffmann family, and in no way is trying to impersonate DHR International or its associates
• contains only publicly available information - there is no copyright material or personal & confidential information
• will not tolerate any hate speech or harassment

Some of the best reading on this web site comes from the comments. Click on the "Comments" link in the gray box under each post. If you don't want to leave an anonymous comment, feel free to email us with any tip offs at unofficial.dhr(at)gmail.com. If you are employed by DHR International or Jobplex, please email us from a personal computer or device. You can use an anonymous email web site, if you like.

July 31, 2015

The DHR International PR machine

DHR love PR and pay a number of PR firms, including Hunt Scanlon, to buy them coverage. This results in lots of news stories and TV interviews where DHR in general, and Geoff Hoffmann in particular, give commentary on any topic they can. We saw this play out when many at DHR commented on a story on "embellished resumes", although they forgot that David Hoffmann himself is the master of embellishing resumes!

A reader sent us a link to a story about DHR in FCN Business from July, 2015. It turns out DHR are in the low-level recruitment game, managing assignments with "thousands of applicants".

A story from Streaming for Business also from July, 2015 reinforces that DHR is a recruitment company dealing with applicants not a search firm finding candidates:
"hiring the services of companies like DHR International Inc. would help you in this regard since they will do the sorting of applications of these top level managers and then even do the initial rounds of interview before sending you their profiles"
One great think about the FCN story is that the investigative journalist who wrote the story finally uncovers what DHR CEO, Geoff Hoffmann, does when he is locked in his office:
"Geoff Hoffmann, whose main work is to sort out the best and the most relevant staff from the thousands of applicants who apply daily and give the client company the most suitable or a set of most relevant applicants for them."
We've known for some time that Geoff Hoffmann doesn't do searches (even though he is often on TV talking about searches). At least we now know that he sorts through thousands of resumes each day!

Caldwell Partners triumphs over DHR International

Update July 31, 2015: Adds David Hoffmann's comments to Caldwell's win

A release to the market on July 30, 2015 showed that DHR realized that they will not be able to disrupt Caldwell Partners:
"Caldwell Partners … today announced that its Chairman, G. Edmund King, and the Chairman of DHR International (“DHR”), David Hoffmann, had concluded, on an amicable conference call, that Caldwell Partners and DHR would cease further communications regarding an acquisition transaction by DHR for Caldwell Partners at the present time.  As part of the conversation, Mr. Hoffmann and Mr. King agreed that DHR would dispose of its approximately 5.6% of the shares of Caldwell Partners and, in order to avoid any overhang of these shares in the market, Caldwell Partners agreed to purchase such shares at a price of C$1.40 per share. Messrs. King and Hoffmann also agreed to a two-year mutual non-solicitation understanding, pursuant to which neither would solicit partners or search consultants of the other, but may hire partners and search consultants who leave employment or who initiate discussions with the other party (with prior discussions being grandfathered), and a two-year standstill pursuant to which DHR and its affiliates would not acquire shares of Caldwell Partners. The agreements are subject to the negotiation and execution of mutually acceptable definitive documentation."
Laughably, David Hoffmann was then quoted by his PR aparchicks, Hunt Scanlon as saying:
"DHR does not want to be, nor ever wanted to be, involved in a hostile takeover. We want to wear a white hat, as we always have."
Not sure those at CTPartners would believe this. And of course, Hunt Scanlon have the inside word from DHR:
"David Hoffmann has not backed off his belief that these two search firms should join forces to maximize their potential as a combined force in the recruiting industry. I would not be at all surprised to see another combination attempt in two years time."
This all followed the Chairman of Caldwell Partners writing a further letter to DHR International on July 28, 2015:
"In your letter, you make several accusations regarding the Board's fiduciary duties and enumerate a number of requests regarding the Board's review process.  Rest assured that the Caldwell Partners Board is well aware of its fiduciary duties and is confident that it is fully compliant.  Accordingly, the Board does not intend to respond to you on any of these matters." 
"DHR's interest in Caldwell Partners – both as a destabilizer and as a potential acquirer – is at odds with the interest of our corporation and its various constituencies, including our shareholders.  Indeed it is difficult, if not impossible, to treat your recent subversive recruiting activities as anything but disruptive attempts that could adversely affect shareholder value." 
"What is further frustrating is that you are ignoring the impact that your continued advances could cause on the business you wish to acquire.  Our Board was copied on a letter sent directly to you on July 16, 2015, from and signed by each and every one of our 37 partners.  The letter states unequivocally that none of the 37 partners wish to work for an entity controlled by DHR, and that any transaction that accomplishes this would be "an empty one void of significant producers and shareholder value will be destroyed". It is my understanding that the letter was written, and consensus on it obtained, exclusively from the partners themselves. I am attaching it again for your reference." 
"It is the job of our Board of Directors to do what is in the best interest of the corporation and to protect and enhance the investment of all our shareholders.  As such, it is incumbent upon us to decline any further invitation to meet with you regarding an acquisition of Caldwell Partners by DHR."
Caldwell Partners continues to be in play, with around 300,000 shares trading on July 22 and 23. Speculation is that this is DHR building its stake, with a greater volume to that acquired by DHR on July 13. We posted on July 23 that we expected Hunt Scanlon's lead story (paid advertisement?) in its 'Daily Newswire' to once again focus on this story and of course it did.

On July 24, DHR responded to Caldwell's July 17 letter, but have said nothing new. Perhaps the most interesting part of DHR's latest letter is their tone of indignation that Caldwell are not rolling over.

On July 17, Caldwell Partners issued another letter/press release reiterating they want to have nothing to do with DHR International:
"Our refusal to engage in further discussions with DHR was strongly validated by the events that were occurring prior to my July 14, 2015 letter. While you professed to me on our July 7, 2015 phone call that you would like to avoid a confrontation, we are aware of at least four attempts by DHR partners specifically stating they represented you to contact our partners in order to urge them to "jump ship" and join DHR prior to any transaction. We believe this was a clear attempt to undermine our business and depress our Company's share price."
"Simply put, and as they have expressed to you, our partners are not willing to be part of a firm controlled by DHR.
"Our Board of Directors has the responsibility to protect the investment of all our shareholders. As such, we will vigorously defend any further attempts by DHR to disrupt or undermine our business." 
Caldwell Partners' earlier press release said:
"The Caldwell Partners International Inc ... today announced that its Board of Directors, after consulting with its financial and legal advisors, has unanimously determined that pursuing discussions with DHR International, Inc. at this time is not in the best interest of the firm, its shareholders, partners, employees and clients."
"...our partners have expressed to us their significant concern and have made it clear that they would not be willing to be part of a firm controlled by DHR."
This caused DHR's lawyers have written a heavy-handed letter back to the Chairman of Caldwell accusing the Caldwell Board of not fulfilling their duties as board members. Some would say this is laughable as DHR are hardly a bastion of ethical behaviour but at least DHR are not stupid enough to be publicly traded.
"The Caldwell Board’s determination is unsupported, unacceptable for a publicly traded company and violates the board members’ fiduciary duties to its shareholders."
DHR have been spitting out press releases flagging their interest in Canadian listed Caldwell Partners.
"Global search firm DHR International announced today that it has increased its share holdings in Caldwell Partners International (TSX: CWL) to 1,141,000 common shares, representing approximately 5.36% of the common shares outstanding. DHR believes that it is now the third largest shareholder of Caldwell International. In addition, DHR announced that its Chairman, David Hoffmann, and Edmund King, Caldwell’s Chairman, had spoken recently concerning DHR International’s interest in the company. Mr. King advised Mr. Hoffmann he anticipated Caldwell’s board of directors would be meeting Thursday, July 9 to discuss DHR International’s interest."
Actually, that press release, following one on July 2, suggested that DHR have increased their shares minimally from holding 5% to 5.36% of the outstanding shares. In other words, DHR are churning out press releases with little new information and trying to keep the pressure up. Curiously, the new press release talked about "July 9" as if it were in the future. That date was four days before the release came out.

Although DHR were trying to buy CTPartners Latin America, these offices did not join DHR but joined Caldwell Partnerssee this press release. As pointed out by a reader of our web site, the press release is unusual in that it reveals the commercial terms including a poison pill. If DHR acquire Caldwell in the next two years, then the Latin American partners "have the right to terminate the alliance agreement and will be entitled to a dislocation and rebranding fee of $2.0 million".

This was a brilliant move by both the CTPartners Latin America partners and Caldwell as it effectively adds $2 million to the purchase price of Caldwell and - even if DHR buy Caldwell - they will have to pay this but still won't get the Latin America offices! Caldwell have also put in a similar poison pill provision to other CTPartners' consultants joining the firm. As one reader emailed us, "With no debt, and therefore no back door for DHR, DHR will find it very expensive taking over [Caldwell Partners]".

When did this begin? Shares in Caldwell initially spiked in late June, 2015. See Caldwell's initial press release:
"More than 500,000 shares of the company's common stock traded today, increasing the share price over 40% to $1.84 and spurring the trading halt." 
"Caldwell Partners reports that is has no knowledge of any material change in the affairs of the company which should cause a change in its stock price and it is not aware of either the party or parties acquiring the shares, or the party or parties selling them, and therefore has no information to provide at this time."
It was subsequently confirmed by Scott Scanlon,that DHR International were the acquirers of these shares, Scanlon originally posted the rumor and then confirmed it, as he has a privileged relationship with DHR. His latest post is clearly PR for DHR: as usual, former bankrupt, Scanlon, writes the article, quotes himself as an expert and refers to his ranking table. Do DHR pay for this?
"DHR International has confirmed that it purchased an aggregate of 1,032,00 shares of Canadian rival Caldwell Partners International last week on the open market of the Toronto Stock Exchange. The share purchase represents approximately five percent of Caldwell’s issued and outstanding common shares. DHR said in a call [to Scanlon?] this evening that it believes it is now Caldwell Partners' third largest shareholder." 
"In recent weeks, Chicago-based DHR has been in communication with Caldwell’s management regarding a possible acquisition of the company. DHR said that it expects that any negotiated transaction would be priced at "a premium to the recent market price of Caldwell’s common shares," and that DHR would not require any external financing to complete a full share purchase of the company. To date, no agreement has been reached. According to DHR, it intends to continue exploring its interest in a negotiated transaction with Caldwell and that process is expected to last "at least another couple of weeks" as both companies take time to explore their options."
But the Scanlon story was counter to a Caldwell Partners press release of the same day, where Caldwell said that "on the evening of July 1, 2015 it received a letter from David Hoffmann, Chairman of the Board of DHR International, Inc." and that "This is the first instance of communication from DHR International to the Board of Caldwell Partners, which was not in current discussions with DHR International regarding any proposed transaction." So who is telling the truth as to whether there have been discussions? Remember, DHR claim "in recent weeks, [they have] been in communication with Caldwell’s management regarding a possible acquisition of the company".

DHR's July 13 press release continues with a quote from David Hoffmann.
"David Hoffmann commented … "Caldwell would be a good strategic fit for both firms and we are anxious to continue our discussions…it’s a great firm with great people. The integration of our recent additions of CTPartners’ personnel from around the world has gone smoothly. We feel that a transaction would be beneficial to both Caldwell’s shareholders and its search consultants.""
Why is Hoffmann so anxious? Actually, there is no evidence that the CTPartners "additions" have gone smoothly. It is not even clear how many people have joined. This is a complete lie. In fact, DHR's press release of July 2 claimed DHR had "more than 70 offices" as a result of the CTPartners deal. The press release of July 13 says they only have "more than 60+ offices" (why both "more than" and "+"?). In other words, they picked up fewer offices than they originally claimed.

And is David Hoffmann the Chairman of DHR International or not? Since March, 2015 Stephen Hayes has been listed as the Chairman. It is poor governance to have two people running around claiming to be "Chairman".

Caldwell Partners' employees themselves should be aware of how the CTPartners "acquisition" played out:
  1. DHR made a hostile bid for CTPartners, with tip-offs to Hunt Scanlon Media.
  2. Many CTPartners consultants, not wanting to join DHR, defected.
  3. CTPartners' debt covenants were breached due to the large number of departing consultants.
  4. CTPartners share price crumbled.
  5. DHR reduced their stake.
  6. CTPartners share price crumbled further.
  7. DHR became the only bidder in CTPartners and entered into an exclusive due diligence.
  8. DHR decided not to acquire CTPartners, but did a deal with the lenders to buy certain assets.
  9. CTPartners found they could not continue to trade.
  10. DHR hope to hire (on onerous contracts) CTPartners consultants who have nowhere else to go.
  11. DHR have one less competitor in the market.
Substitute 'Caldwell Partners' for 'CTPartners' and you know how this could play out. This is one of many problems of listed search firms. It is very easy for an unscrupulous competitor like DHR to destroy them. Frankly, this is no win situation for Caldwell Partners. But their response is the right one. Are Heidrick & Struggles or Korn Ferry DHR's next target? DHR love attempting to take over listed firms.

There has been movement from Caldwell to DHR in the past including Sean Scanlon (presumably a relation of Scott Scanlon), Smooch Repovich Reynolds, Jerry McGrath, Carol Hartman, Jessica Henselmann and Elaine Lee. More nervous will be those that have gone from DHR to Caldwell include John Wasley, John Blank and Mark Dillard.

July 27, 2015

DHR International: where everyone has a meaningless, impressive title

Update July 27, 2015: We continue to find new titles. For example, David Madden leading the Internet of Things practice on his LinkedIn profile and David P. Smith leading the "Economic Development Sector"

We've written before that part of the DHR International model is to attract consultants by giving them impressive-sounding titles. It is rule 5 in "The DHR International Way".

Offer incoming consultants impressive titles. Very many of the new recruits have had titles such as "Managing Director", "President" or "Chairman" of an office or region, "Global Head" of a Practice Group or even "Board Member". Other search firms promote people to senior roles based on many years of proven performance, but DHR International uses these titles as a carrot to "get 'em in".

The following list sets out those at VP or above listed on the DHR International web site. We've put next to their names their fancy sounding titles as listed in their bios or elsewhere on the DHR International website (eg under Practice Groups). You will see it's a large number of people with titles. Sometimes, there are multiple people with the same title. Some offices have both Managing Directors and Managing Partners!

This is another example of "Hoffmannitis". We just feel sorry for those that have not been given a title. If we were you, we'd demand one or perhaps check your cereal box again to see if there's one for you.

DHR International: VP and above as at July 27, 2015
* denotes litigation covered elsewhere on this web site

Abbed Anabtawi
Albert Sim
Amy Orlich
Andy Cornwell
Anna Marietta
Arjun Srivastava: Managing Director, India; Consumer Practice Leader, Asia Pacific
April Drury: Senior Vice President, Global Talent Management
Ayman Haddad: Managing Director, Middle East and North Africa
Bob Marchant
Bonnie Sharps: Managing Director, Philadelphia
Carlos Cata, Managing Partner, Chicago
Carol Hartman: North American Practice Group Leader, Financial Services*
Caroline Edwards: Managing Director, Hong Kong
Charlie Fang: Managing Director, Taiwan
Chris Guiney
Chris Prosper
Chris Sotomayor
Christine DeYoung: Leader, Consumer, Sports and Private Equity Practice Groups
Christine Greybe: President
Clare Cizek
Conrad Lee
Craig Randall
Craig Sigovich: Managing Director, Stamford
Cyd Kinney
Danny Cheung
David Madden: Head, Mobility Practice; Technology Leader of the Private Equity Practice; Head of the Internet of Things (IoT) Practice
David Nagy: Managing Director, China
David Smith: Economic Development Sector Leader
David Treussard: Leader, Global Financial Services Practice Group
Debbie Graf: Member, Executive Committee
Dipak Gupta (aka Deepak Gupta): Chairman India
Dennis Hood: Managing Director, Milwaukee
Diane Coletti: Managing Director, Boston
Dipanjan Sengupta
Donald Kilinski
Dona Roche-Tarry: Managing Partner; Head of European Advanced Technology Practice
Donna Pratt, MD, MSEH
Doug Black: Chief Financial Officer*
Dwain Celistan: Leader, Global Diversity Practice
Edward van den Boorn
Eric Dieny
Eunice Kim
Fernando Boldrini
Fernando Cesar
Frank Smeekes: Managing Director, Europe
Frank Spencer: Managing Director, New York; President, Retail/Consumer Practice
Geoffrey Hoffmann: Chief Executive Officer*
Glenn Sugiyama: Global Leader, Sports Practice
Gordon White, Jr.: Leader, DHR’s Automotive Industry Sector
Helen Getzkin
Hendrik Geissler
Ian Thomson [Contestant, The Bachelorette]
Jadie Li
Jae (Jae-Hang) Noh
James Abruzzo: Global Leader, Nonprofit Practice Group
James G. Abruzzo: VP, Talent Acquisitions, Northeast
James DiFilippo
James Norton
James Schroeder
Jan Westerink
Jason Lee
Jay Millen: Vice Chairman, North America; Global Leader, Board & CEO Practice Group; Managing Director, Carolinas
Jeffrey Golove: Head, Healthcare Payor Division
Jeffery Smith: Managing Director, Houston; Global Co-leader, Energy Sector
Jerry McGrath: Global Leader, Human Resources Practice Group
Jill Schofield: Managing Director, Calgary; Global Leader, Mining Practice Group; Leader, Global Energy and Construction/Infrastructure Practices; Global Leader, Industrial Practice
Johannes Suciu
John Baker: Global Leader, Life Science Practice Group
Joseph Huddle: Global Leader, Industrial Practice Group; Managing Director, Washington DC
Joseph Christman: Managing Director, Pittsburgh; Leader, Aerospace, Defense & Homeland Security Sector
Joyce Mak
Joylyn Largo-Afonso
Judi Kilachand
Julia Eakes
Justin Hirsch: President, JobPlex; HR Executive Search Lead
Karin Legein
Karin Warwick-Thompson: Managing Partner, Global Insurance Practice
Kazuhiko Mori
Kazushige Hata
Keith Giarman: President, Private Equity Practice
Kelvin Ling
Kenneth Xu
Kristi LeBlanc: Leader, North American Consumer Practice
Lance Winn: Managing Director, Austin
Lawrence R. Noble
Linda Madrid: Global Leader, Legal and Compliance Practice
Lorenz Pestinger: Vice President of Talent Acquisition, Asia Pacific
Louis Hipp III
Manish Pajan
Manuel Corsino: Managing Director, Miami; Managing Director, Mexico City
Margaret Dillon*
Marcey Rubin Stamas: Managing Director, Chicago; Managing Director, Retail/Consumer Practice
Marco Muñoz: Managing Director, Latin America
Marissa Martin: Global Head of Research
Martin Nass: Managing Partner, New York; Global Leader of Real Estate Practice
Martin Pocs: Vice Chairman; Managing Director, Denver
Mary Lee Montague: Nonprofit Practice Group Leader, North America
May Tung: Managing Director/Head of the Financial Services Practice
Merritt Norvell, Jr. Ph.D.: Managing Director, Lansing; Global Leader, Education Practice
Michael Getchell: Managing Director, Brazil
Michael Kotelec
Michaela Rosbrook
Michelle Smead
Mike Lim Sang Chong: Advanced Technology Practice Leader, Asia Pacific
Mike Nagata
Mona Bopanna
Naomi Tachibana: Managing Director, Tokyo
Nick Parry
Nick Slee
Nicole Phillips
Olivia Quatrone: Managing Director
Pascal Daoglio
Pat Richter
Patricia Watters Binkley
Paul Stefunek
Peter Billing
Philip DeFord
Philippe Tirault: Managing Director, Korea
Pravesh Mehra: Global Leader, Business & Professional Services
Rick Brown: Managing Director, Indianapolis
Rick Walker: Managing Director, Houston
Rives Dalley Hewitt
Robert Baker
Robert Fong
Robert Godfrey
Robin Singleton: Leader, National Healthcare Practice; Global Leader, Human Resources Practice
Roc Spence
Rod Malcolm: Consumer Practice Leader, Toronto; Global Leader, Consumer Practice
Ron Woessner: Global Leader, Financial Officer Practice
Ryoko Komatsuzaki: Asia Pacific Lead, Retail Practice
Sal DiFranco: Global Leader, Advanced Technology Practice Group; Leader, CIO Practice
Sayres Dudley
Scott Harris: Managing Director, St. Louis
Scott Sette
Sean Scanlon: Managing Director, Los Angeles; Global Leader, Media & Entertainment Practice
Serge Lamielle: Managing Director, Paris
Shannon Connors: Managing Director, Strategic Initiatives; Advisory Practice Group Leader
Shawn Woessner: Managing Director, Minneapolis
Simon Mansfield: Managing Director, London
Smooch Repovich Reynolds: Global Leader, Investor Relations & Communications Practice Group
Stacey Holland
Stéphane Rambosson: Managing Director, European Financial Services Practice Group
Stephen Hayes: Executive Chairman
Steve Godwin
Steve Stine: Managing Director, Asia Pacific
Sue Rossiter: Managing Director and European Practice Lead Global Life Sciences Practice
Supriya Dikshit: Life Sciences Practice Leader, Asia
Sussannah Kelly
Suzy Stewart
Thomas Drewry: Advisor European Financial Services Practice
Thorsten Otremba: Head of Global Automotive Excellence
Tim Kemp: Managing Partner; Head of European Human Resources Practice
Tina Winner
Tom Goodrich
Tushar Dhingra
Victor Kleinman: Managing Director, Palm Beach; Global Pharmaceutical Practice Leader
William Franquemont
Xavier Alix

July 22, 2015

RIP CTP: the delisting

Update July 22, 2015: CTP has been officially delisted from the NYSE

While CTPartners' web site is still surprisingly live, an SEC filing on July 22, 2015 confirms what we already knew: CTP has been removed from listing and registration:
"the Common Stock [in CTP] is no longer suitable for continued listing and trading on the Exchange. NYSE Regulation reached its decision to initiate delisting proceedings … based on the disclosure made in the Company's June 22, 2015 press release regarding the anticipated winding down of its operations and the fact that certain contemplated asset sale transactions, if completed, are not expected to result in any recovery by the Company's shareholders." 
"1. Based on the Company's announcement mentioned above, on June 23, 2015, NYSE Regulation determined that the Common Stock of the Company should be suspended immediately from trading, and directed the preparation and filing with the SEC of this application for the removal of the Common Stock from listing and registration on the Exchange. The Company was notified by phone and by letter on June 23, 2015." 
"2. Pursuant to the above authorization, a press release was immediately issued and an announcement was made on the 'ticker' of the Exchange on June 23, 2015, of the suspension of trading in the Common Stock. Similar information was included on the Exchange's website." 
"3. The Company had a right to appeal to the Committee for Review of the Board of Directors of NYSE Regulation the determination to delist its Common Stock, provided that it filed a written request for such a review with the Secretary of the Exchange within seven business days of receiving notice of delisting determination. The Company did not file such request within the specified time period."
CTPartners had announced it has received a notice of default from its lenders. As of June 26, 2015, the total outstanding principal amount owing under its main facility was $14,737,352.06. In addition, as of June 26, 2015, the outstanding principal balance of CTPartners' Second-Lien Notes was $6,250,000, accrued and unpaid interest is $151,562.50, and costs and expenses are approximately $139,360. 
"As a result of the continued deterioration of the Company’s business and financial condition and its inability to secure funding to repay the accelerated debt obligations described above or to continue its operations, the Company will cease doing business as June 30, 2015 and wind down its remaining operations. The Company is aware, as disclosed above, that the Bank intends to sell to DHR certain of the Company’s assets the Bank obtains on its exercise of rights under liens granted pursuant to the Credit Facility. These transactions will not satisfy all of the Company’s obligations to its lenders and other creditors or result in any payment to the Company’s shareholders. Although the Company intends to wind down its remaining operations in an orderly manner, it may be required cease operations entirely or seek bankruptcy protection."
So, DHR International acquired only some of CTPartners' assets. Of course, in typical DHR fashion lied about it on their website with a headline, "DHR International agrees to terms of acquisition of CTPartners". DHR did not acquire CTPartners but bought "certain" of CTPartners' assets and not from the company but its lenders. DHR only hired some CTPartners staff, who needed to wait for a call from DHR! Like buzzards, DHR picked through the rotting flesh of CTPartners. It was a clever strategy: as foreshadowed to us in emails and comments from DHR insiders, DHR International never intended to buy CTPartners. Rather they saw an opportunity to make a larger competitor crumble. DHR International are cunning. 

DHR played CTPartners, its shareholders and employees. Their acquisition play was the oldest trick in the book. They timed it right and claimed they were going to buy CTPartners as a whole but this was never their plan. DHR International got CTPartners to open their books so that they knew who are the right clients and candidate are they can pick off. It is much cheaper than buying a business with its liabilities.

We feel for the loyal CTPartners consultants and employees who are unemployed from July 1. Although it might not feel like this at first, the best outcome for these people was not receiving a call from DHR. The losers were the ones who do get a call from DHR. They had a decision to make - the smart ones declined the DHR offer particularly as DHR are renowned for not paying what they are contractually obliged to pay.

We also feel for the clients and candidates who got left in the lurch. DHR International have a track record on not completing assignments and are unlikely to care about CT clients who have already paid fees.

CTPartners' CEO David Nocifora sent an email to all staff on June 23:
As you are aware, the exclusivity period for DHR International to perform its due diligence on CTPartners expired last week. The parties have agreed in principle to buy certain assets of CTP from CTP’s lenders and are circulating a term sheet. We understand that DHR and the lenders are working to enter into a definitive agreement and close the transaction as soon as possible, targeting July 1st

DHR has been or will shortly be in contact with the employees of CTPartners that they plan to employ.  We appreciate the support of everyone throughout this process.  DHR will be a great home for the hundreds of CTPartners employees joining the organization around the world.

Unfortunately, for many of the CTPartners employees, including myself, our last day of employment with CTP will be June 30, 2015Base salaries and benefits will be paid through this date. 
While it is difficult and disappointing, I am very thankful for the opportunity that I have had to work with and get to know so many of you and hope that, like me, you will confidently look forward to the future beyond CTPartners.

Bill Keneally will be in touch with a limited number of corporate employees to continue their employment for a limited period of time during the transition.  Please direct any questions to Bill Keneally either by email or phone at extension {number deleted}.

Over the next few days we will be notifying each location of their status and sending out follow-up communications to answer questions about Clients, searches and process going forward.

Thank you.
What was Nocifora's incentive to say "DHR will be a great home for the hundreds of CTPartners employees joining the organization around the world"? Did he really believe this?

There was plenty that Nocifora did not say. While he said that "salaries and benefits will be paid through" June 30, what happened to commissions, etc? Presumably these were not paid. 

DHR released its own press release:
DHR International to acquire selected assets of CTPartners CHICAGO (JUNE 22, 2015) – DHR International is pleased to announce that it has agreed in principle on non-binding terms outlining the acquisition of selected assets of CTPartners Executive Search Inc. (NYSEMKT: CTP) in a transaction with CTPartners’ lenders, who have the right to acquire the assets pursuant to the underlying debt documents. The transaction is estimated to add 17 offices and 250 employees worldwide to DHR International. 
“We’re very excited about welcoming CTPartners employees and clients to DHR. This process has been performed with extensive diligence and more than 200 phone calls between employees of both firms,” said Geoffrey Hoffmann, CEO of DHR International. “The value system and culture of DHR aligns well with those of CTPartners employees, which is always a critical component to a successful integration. Through our diligence, it became abundantly clear that the combined organization will be better able to serve clients in the unique culture that has propelled the success of both companies for so many years: client service, collaboration, an entrepreneurial and team based approach with a global reach. The addition of CTPartners’ employees will further strengthen our ability to serve our clients on a global scale with the client centric focus that has been the foundation of DHR’s success. I want to thank the employees of DHR and CTPartners for their support, time and hard work in making this acquisition a reality.” 
For more than 25 years DHR International has been a leading, privately held provider of executive search solutions with 53 wholly-owned offices spanning the globe. DHR’s renowned consultants specialize in all industries and functions in order to provide unparalleled senior-level executive search, management assessment and succession planning services tailored to the unique qualities and specifications of our select client base. For more information on DHR International, visit www.dhrinternational.com.
It was a confusing press release as it implies that DHR were acquiring offices and employees, but that is contrary to the CT press release and email. We also note that Geoff Hoffmann believed "The value system and culture of DHR aligns well with those of CTPartners employees". In other words: any CTPartners consultants who join DHR lack any values other than unadulterated greed even if it means cheating clients and employees.

We also note the press release makes the specific claim that DHR currently has "53 wholly-owned offices". Yet DHR's website had for some time shown only 49 offices, including 7 that are fake. DHR quite comfortably lied about this, just as they will lie to prospective hires from CTPartners as to how they will treat them. Forewarned is forearmed. 

So, which CTPartners employees are stupid enough to join? The best performing CTPartners consultants fled to avoid working for DHR InternationalWe expect the long, long list of ex-DHR consultants to grow dramatically to include people who join DHR and then find out they have made a mistake. Female CTPartners employees in particular should make sure they are aware of DHR's approach to diversity.

There's at least five consultants at DHR International who used to work at CTPartners: James DiFilippoDavid MaddenAmy OrlichNicole Phillips and Kenneth Xu. There's at least three at CTPartners who used to work at DHR International: Ryan Chatley, Jamie Cassedy and Kevin McKeon. Will they rejoin DHR or leave like those former DHR consultants who left CT after DHR announced their takeover bid e.g. Michael DeSimone and John Spencer.


This has been a tough four months for those at CTPartners. This all started back on February 6, 2015 with DHR International making a takeover bid for the public CTPartners on. Although owned by one individual, David Hoffmann, DHR International could have afforded the millions of dollars to buy CTPartners. Instead it killed a competitor by making a non-genuine takeover bid - it is the oldest trick in the book and the leadership of CTPartners fell for it. Most of them have gone.

July 17, 2015

Do the Caldwell Partners Board have a duty to deal with DHR International?

The DHR International/Caldwell Partners International battle continues to remain hot. Everyone agrees that the prime obligation of the Board of Caldwell Partners International is to enhance shareholder value. Where disagreement arises is how the Board needs to discharge this obligation.

DHR argue (supported by their PR company, Hunt Scanlon) that to do this, the Caldwell Board need to accept the DHR takeover offer. That is nonsense. Why? Because the Caldwell Partners' fee earners, who are the core asset of the business, are unambiguous in saying they do not want to work for DHR International, the 'ISIL of the executive search world'. This means that if there were to be an acquisition by DHR, these individuals would leave Caldwell/DHR thus deflating the purchase price and destroying value for Caldwell's shareholders.

The best proof of this is the way DHR's fake acquisition ploy for CTPartners played out. Within a couple of months, almost a quarter of the CTPartners consultants (particularly the big billers) left the firm to avoid joining the unethical DHR. If you add to this the number of consultants who declined DHR International's offers to join after the collapse of CTP, you will find there were very few who ended up joining. As it stands today based on DHR's own web site almost three weeks later, under 4% of the CTP consultants have professed to joining DHR and these were generally the poor performers who have not yet found a job anywhere else. We think the final number will be around 10% of CTP consultants. Even Hunt Scanlon's exaggerated numbers (provided by DHR) suggest that DHR secured only 27% of CTP consultants (or 75 out of 278 consultants who were at CTP prior to the DHR scam).

In other words, if DHR paid the CTP shareholders for this pseudo-acquisition (rather than doing a grubby deal with CTP's lenders), DHR would have paid a significant discount to the share price prior on the day that DHR launched its fake acquisition bid.

So, we applaud the Caldwell Board for their stance on DHR. They have the benefit of seeing DHR's track record in fake takeovers and know that DHR are doing this to destabilize Caldwell and to remove a competitor rather than to buy the business from Caldwell's shareholders. But, if you are publicly traded like Caldwell Partners, then you have a problem.

Hunt Scanlon: $7 million in embezzled receipts and relationship with DHR International

Update July 17, 2015: Hunt Scanlon continue to serve as a mouthpiece for DHR, have been deleting incriminating posts and have turned off the ability for readers to add new comments to their web site. We also track the fact that they have been writing more stories about DHR, Cadwell and CTP than they have the big five put together. A recent update includes the judgement against Hunt-Scanlon Corp and their jaw-dropping role in the demise of the Whitney Group through the receipt of $7 million in illicit transfers

Christopher Hunt and Scott Scanlon
One of the more interesting protagonists in the DHR/CTPartners/Caldwell Partners saga is a company called Hunt Scanlon Media (formerly, HSZ Media). This is a business founded by former bankrupts, Christopher W. Hunt and Scott Scanlon.

Readers of this web site shared with us Chris Hunt and Scott Scanlon's previous background, running a similarly named Hunt-Scanlon Corp. You couldn't make this stuff up. According to a 2008 Bloomberg article:
"Whitney Group LLC, a 20-year-old recruiting firm that helped Wall Street banks hire executives, sued its former chief financial officer, claiming his financial "misappropriations'' caused the company to collapse." 
"Ex-Finance Chief Jeffrey Sussman, 51, committed fraud when he advanced "millions of dollars'' without authorization over four years to Hunt-Scanlon Corp., a company that tracks the executive-search market, according to a complaint filed Sept. 25 in New York State Supreme Court in Manhattan. Whitney also sued Hunt-Scanlon, alleging the Riverside, Connecticut-based company owes it $7 million from the money transfers.
Whitney is insolvent, unable to meet payroll obligations and plans to "wind up'' its affairs under New York's Debtor and Creditor law, according to the complaint. Whitney said it ousted Sussman on Aug. 29 based on "the substantial and unauthorized cash advances.''
...  
"Hunt-Scanlon's Chris Hunt and Scott Scanlon were also named as defendants in the Whitney suit. Hunt declined to comment and Scanlon didn't return a call." 
... 
"Whitney alleged in the complaint that Sussman's advances were made in "small and irregular'' amounts to Hunt-Scanlon and individuals that had personal, professional and family relationships with the company."  
""Sussman failed to disclose and actively concealed his misappropriations from Whitney Group until, as the company became starved for cash in August, he had no choice but to confess the indebtedness of the Hunt-Scanlon Defendants to Whitney Group was in excess of $7 million,'' according to the complaint."  
"Whitney Group, which has offices in New York, London, Boston and Hong Kong, generated revenue of $30 million last year. As of August, it had a no cash balance and accounts receivable of less than $100,000 in New York, according to Sussman's complaint."
What were these $7 million in payments for? Increasing Whitney's standing in Hunt-Scanlon's ranking table? PR advice?

In his 2010 judgment in Whitney Group vs. Hunt-Scanlon Corporation, Christopher W. Hunt, Scott Scanlon, Judge Charles E. Ramos the Supreme Court of the State of New York found the following facts:
"In August 2008, Whitney Group, an executive recruiting firm, discovered that beginning in 2004, its chief executive officer, defendant Jeffrey Sussman, misappropriated a total of $7 million over several years in corporate advances (the Funds) to defendants Hunt-Scanlon Corporation (Hunt-Scanlon), Scott Scanlon and Christopher W. Hunt (together, the HS Defendants), Sussman concealed the misappropriation, that was made without Whitney Group's authorization or knowledge and for no apparent legitimate business purpose, until August 2008. At the time of the filing of this action, Whitney Group is insolvent." 
...  
"Whitney Group terminated Sussman for cause and unsuccessfully attempted to recoup the funds from Hunt-Scanlon." 
"In September 2008, Whitney Group commenced this action and asserted thirteen claims. The claims are for breach of fiduciary duty, and disgorgement of compensation against Sussman; aiding and abetting breach of fiduciary duty, piercing the corporate veil, and unjust enrichment against the HS Defendants; conversion against Sussman and the HS Defendants; fraud and breach of contract against Sussman, Hunt-Scanlon and Hunt; money had and received against Scanlon..."
As a result of this, both Chris Hunt and Scott Scanlon were declared bankrupt, leading to some forced asset sales.

But Hunt and Scanlon re-emerged with two new businesses: Hunt Scanlon Media and AERIS | Media Group. The industry was aghast at the time, but everybody seems to have forgotten this recent history. (And, if you read Hunt's LinkedIn profile, the old Hunt Scanlon that received $7 million in payola and the new Hunt Scanlon are the SAME business as he has been running it from "October 1988 – Present (26 years 10 months)".

In a DHR-like way (i.e. filled with hyperbole), Hunt Scanlon claim they:
  • are "the most widely referenced, single source for information in the human capital sector"
  • "have assembled a team of trusted, experienced reporters and editors to track who is making news and what's driving the market around the clock"
  • "have one of the best management teams in the field"
  • have "been defining and informing the senior talent management sector for over 25 years" (despite having been founded less than 5 years ago)
Hunt Scanlon broke the news about the management issues at CTPartners, DHR's bid for CTPartners, the mass departures at CTPartners and the spike in Caldwell's shares. Hunt Scanlon are clearly well connected to DHR to the extent that DHR are tipping Hunt Scanlon off when DHR bought shares in CTPartners or Caldwell Partners. Hunt Scanlon have written about these sagas and managed to do so with enough forewarning to get third party quotes.

Firstly, is Hunt Scanlon's Scott Scanlon related the DHR's Sean Scanlon, the "managing director of the firm's Los Angeles office and is the global leader of DHR International’s Media & Entertainment Practice Group"?

Scott Scanlon, Hunt Scanlon Media
Sean Scanlon, DHR International

If he is or if Hunt Scanlon have been receiving payola from DHR and this remains undeclared, this may represent market manipulation.

We also wonder whether Chris Hunt and Scott Scanlon's separate PR firm, AERIS | Media Group, are on DHR's payroll.

Scott Scanlon has been quoted as saying: "Basically, what we [AERIS Media Group] do is build, extend and manage corporate brands".

Chris Hunt has been quoted as saying: "We want to go in and help repackage and resell that image and remind people that this particular client is very professional."

The AERIS | Media Group web site and LinkedIn page reinforce this: "AERIS | Media Group … provides integrated marketing, public relations and communications support to companies and business professionals seeking corporate brand turnarounds and personal image campaigns. Building, managing and extending your brand - that's what we do - and we support these initiatives through well-tested brand management services focused on global, national, regional and local major media placements."

One of AERIS' services is media management & placement:
"The partners of AERIS | Media Group bring close to 25 years of proven and successful media placements for our clients. These include The Wall Street Journal, The New York Times, Forbes, Fortune and BusinessWeek to name just a few as well as dozens of local and regional online and print media that have carried our clients' messages to tens of millions of existing and potential clients and consumers. We work closely with our clients to design well-thought-out, unique and original media and communications campaigns that meet their needs and objectives."
"As a subset of our media management services, AERIS | Media Group develops, writes and disseminates news and information through press releases to various media and Internet outlets for maximum visibility. Many of our clients release and publish news and announcements on a regular basis - AERIS | Media Group works closely with them to leverage that information. In this capacity, we identify the best media partners to position information, with a strong emphasis on the Internet and social networking outlets that syndicate news and information for high visibility impact. As an adjunct to this service we also serve the speechwriting needs of our clients. Whether communicating messages internally or outside to a wider audience, our custom speechwriting is informative, persuasive and is a significant tool in our overall communications strategy package."
Doesn't quite sound like the job of independent reporters covering an industry, does it? But it does sound like the sort of service that DHR International requires. It is what is called "native advertising" or "content marketing" but these sorts of activities must be declared and it is illegal to do these where they are to do with market-sensitive information about listed stocks.

Are DHR clients of AERIS | Media Group? We emailed Scott Scanlon some time ago and asked him whether he is related to Sean Scanlon and whether he or his associates are engaged by DHR. Many days have passed and we have not received a response, suggesting Hunt Scanlon have something to hide.

We know our web site is focussed on DHR International and its improprieties - after all it is in our name. But Hunt Scanlon claim to be an industry newsletter. Scott Scanlon however has posted 12 out of 49 stories on his LinkedIn Pulse on DHR/CTP/Caldwell, and all stories are favorable to DHR. Compare this to 2 each on Korn Ferry, Spencer Stuart, Russell Reynolds and Egon Zehnder, and none on Heidricks. Is this because he is being paid by DHR to do so?

Interestingly, Hunt Scanlon have been deleting stories from their web site (and another one) related to DHR and CTPartners. Given that there are supposed SEC investigations and class action into the CTP scandal, destroying these records may have them in legal hot water, again. Hunt Scanlon have also stopped people adding new comments to stories on their web site, although their site still has a request for comments on every page.

How can you both run a PR firm and an industry newsletter? Is this not a conflict of interest? Each of Scott Scanlon and Chris Hunt neglect to disclose their roles in AERIS | Media Group on their LinkedIn profiles. Both businesses share the same contact details. This is Hoffmanitis by omission.

Often Hunt Scanlon write an article in which they quote one of their owners (usually Scott Scanlon) as an "expert"! They also quote their own ranking table of search firms, which (as previously disclosed on this web site) is grossly inaccurate when it comes to DHR International. In other words: the writer of an article quotes himself as an expert and refers to his own ranking table. When combined with owning a PR company, this is vertical integration!

Scanlon's article claims "It was just three days ago that Chicago-based DHR, the sixth largest U.S. search firm, struck a deal to acquire 17 offices and 250 employees of embattled rival CTPartners." This paragraph is filled with inaccuracies. Firstly, DHR is not the sixth largest search firm in the US. Secondly, DHR are not acquiring any offices or employees: DHR are hoping and claiming they will pick up this number of offices and employees but it not yet known whether this will happen. It is woeful journalism by Scanlon to assert as fact a company's expectation.

Pity the poor search firms that aren't aware of the Hunt Scanlon history and advertise in Hunt Scanlon publications, emails and web sites.

July 13, 2015

The many audacious lies in David Hoffmann's resume

Update July 13, 2015: we've added another quote from the DHR team. We note that David Hoffmann's LinkedIn profile still contains these lies. We are astonished that someone who went on the front foot with his PR machine to get on the record about the importance of accurate resumes can sleep well at night continuing to tell so many lies. For example, his profile lists him as "Chairman of the Board of Directors" of the "Contemporary Art Museum St. Louis" from 2009 until today but he left the Board in 2009 and only created his LinkedIn profile in 2014. This is truly jawdropping.

Update February 27, 2015: Within 72 hours of our original post, DHR International ceased to be Chairman of DHR. DHR removed David Hoffmann's entire profile from the DHR International web site! At least we know that DHR International and Geoff Hoffmann are reading this blog. 

When Yahoo CEO Scott Thompson was caught being misleading with his resume in 2012, DHR International Chairman, David Hoffmann, (always one for self-promotion) could not wait to be quoted on the topic. See, for example, the Tribune. His son, Geoff Hoffmann, and other senior DHR International leaders were quoted on this topic in Smart MoneyReutersAssociated PressBloomberg and Business Insider. That's what happens when you have a large internal and external PR team - they look for others' misfortunes as your opportunity.

From the Tribune:
A little GPA padding. A slight fib on a job title. A clerical error on dates. What might seem like innocuous tweaks or typos on a resume can compound themselves, creating a mess for the individual and company
“As tempting as those things are to do, it will always come back to haunt you,” said David Hoffmann, chairman and chief executive of Chicago-based executive search firm DHR International. “There is no room for embellishment.”
...
"The consequences are unbelievably significant,” Hoffmann said, noting that companies often allow candidates to explain discrepancies. “If any of these (explanations) are a red flag, their candidacy goes away immediately because the available talent pool is pretty significant today. If they're not going to tell the truth about that, what else will they lie about?” 
Expect a domino effect that can impact the company’s reputation, too, Hoffmann said. In addition to hurting a company’s stock price, embarrassing resume revelations can hurt recruitment and fundraising efforts
Hoffman’s firm comes across about two embellished resumes a year, and it places about 1,000 candidates annually.
So, does David Hoffmann practice what he preaches?

According to David Hoffmann's profile on the DHR International website (until the profile was removed on February 27, 2015 due to the original version of this post), he was at that point currently serving on a number of boards. Note: the link to his profile is the version that DHR International removed on February 27, 2015 - the link here is from December 2014 on the Internet Archive).

"Mr. Hoffmann serves on the Board of Directors of the Olin School of Business National Council at Washington University, Evanston Northwestern Healthcare Foundation, Steppenwolf Theatre Company, The Regional Business Council, DHR International, JobPlex, Inc., Edgewood Holdings, Inc., and the Contemporary Art Museum."
This was a fresh web site built in 2014. So, was the profile accurate?

The answer is "no". We call this "Hoffmannitis".

Olin School of Business National Council at Washington University: yes; along with about 80 other members but it is not a "Board of Directors", just an advisory council.

Evanston Northwestern Healthcare Foundation: a Google search reveals no such organization.

Steppenwolf Theatre Company: no; was he ever on it?

The Regional Business Council: no; was he ever on it?

DHR International: yes, but he owns 100% of this.

JobPlex, Inc.: yes, but he owns 100% of this.

Edgewood Holdings, Inc.: no;  was he ever on it?

Contemporary Art Museum: no, he was on this for a very, very short time in 2009.

So, of the six non-owned Boards he claimed to serve on as at February 25, 2015, David Hoffmann was only on one and it's not actually a Board but an advisory council! 

Will this "room for embellishment ... come back to haunt you"?

Will "the consequences [be] unbelievably significant"?

"If [you're] not going to tell the truth about that, what else will [you] lie about?"

Do you "expect a domino effect that can impact [DHR International's] reputation, too"?

Will this "hurt recruitment and fundraising efforts"?

Was this one of DHR's "two embellished resumes" this year?

What will David Hoffmann's team think of this?

Well, his son,  Geoff Hoffmann, quoted in Smart Money:
And since the use of executive search firms is standard for higher-level positions, most applicants can’t realistically expect to get away with it, says Geoff Hoffmann of DHR International, an executive search firm based in Chicago. “It’s very uncommon for a search firm to miss such a basic detail,” he says.
Geoff, does David Hoffmann "realistically expect to get away with it"? How could DHR International "miss such a basic detail"?

Former DHR International Board Member, Gayle Mattson, quoted by Reuters:
"It's pretty clear that there was information that slipped through Yahoo's fingertips and someone has to be held accountable," said Gayle Mattson, an executive vice president for executive search firm DHR International.
Well, is it equally "pretty clear that there was information that slipped through [DHR's] fingertips and someone has to be held accountable"?

David Hoffmann's former Head of Research was quoted as saying in Business Insider:
"If we have to rescind an offer, it’s mostly because of the education," said Marissa Martin, DHR International’s vice president of global research, adding that it is more difficult for recruiters to check degrees overseas than in the U.S. "They lie about completing their undergraduate degree. At the entry level, people lie about their GPAs all the time, but most places don't care about that stuff."
Did Geoff Hoffmann rescind his father's Chairmanship? The fact that David Hoffmann stood down as Chairman of DHR within three days of our original post suggests this. Is this quote from Marissa Martin also a clue that David Hoffmann has lied about his education?

July 11, 2015

The DHR International Way

This post is split from another post.

David Hoffmann has often said to people at DHR that "DHR is the most successful search firm ever". He is right... at least for the Hoffmann family, DHR have been a great success. DHR are a great example of a ruthless, shameless, unscrupulous business. The business model has made David Hoffmann the most successful executive search consultant ever.

This is "The DHR International Way":
  1. Make DHR International look more substantive than it is. You will find other posts on this web site that detail how DHR International exaggerate their significance, e.g. by claiming to have more offices than they do, to be on more continents than they are on, by exaggerating their size, by having inaccurate bios and by having a large external and internal PR team. This makes DHR International look - at first glance - like a viable alternative to prospective consultant recruits and clients. Don't judge a book by its cover!
  2. Hire as many consultants as you can, generally from other firms. By hiring from other firms, DHR International offer very little in the way of training. It keeps the costs down and profits up. It does not matter if there isn't an office in a market - in fact, DHR International prefer lots of small offices as it allows them to inflate their size
  3. Make lots of acquisitions. Over the years, DHR have made lots of acquisitions usually funded by earnouts; in other words, the consultants get paid for their business if they perform. We've tracked down 19 acquisitions, not including the selected assets of CTPartners. These are Apogee Executive SearchBarrett WebbBeechTree Partners, Boyden Chicago and Upper Montclair, Dragonswood AdvisorsEMS ConsultingESLGundersen PartnersHylê Human CapitalJade GroupMAC & AssociatesThe Magellan GroupPrestonwood AssociatesR.W. Elam & Associates, Stratford GroupTurrini AssociatesVenni Partners and Woessner & Associates. Very few of the consultants from the acquired firms remain and are burdened by non-competes when they work out that DHR International are not a cultural fit. You will find very few of the acquired consultants still there today.
  4. Use an "Internal Recruitment" team. DHR employ a large number of "internal recruiters" or "talent acquisition" directors. Some of them are listed on the DHR web site. Those currently employed include James AbruzzoBuckner BellAmélie BonnevilleApril DruryAmy O'NeillLorenz Pestinger and Kan Phongjaroenwit. The team is led by Serge Lamielle, the Vice President of Global Talent Management. It is a large team and they are not client facing, but call every executive search consultant (or recruiter) they can find and try to "sell" DHR to them. They are rewarded on a success basis and so will do whatever they can to get people in. 
  5. Offer incoming consultants impressive titles. DHR give many new recruits titles such as "Managing Director", "President" or "Chairman" of an office or region, "Global Head" of a Practice Group or even "Board Member". Other search firms promote people to senior roles based on many years of proven performance, but DHR International uses these titles as a carrot to "get 'em in".
  6. Offer incoming consultants illusory upside. Many of the most senior hires (Chairs, Presidents, Managing Directors or Global Heads) are offered profit shares of their regions or practice groups. However, DHR manipulate the profit result so that the upside does not get paid - they say they are a private company and keep the numbers opaque. See, for example, the post regarding Adam Charlson
  7. Make a big PR splash. The DHR International web site shows a large number of press releases for new consultants and acquisitions. DHR quickly delete the press release when the person leaves as if they never existed. (Fortunately, the Internet keeps a record). 
  8. Work with a "media outlet" who will tell your story. DHR have a close relationship with Hunt Scanlon Media, who also run a PR company. As a result, Hunt Scanlon will readily put across the DHR story, repeating DHR's spurious claims without any verification.
  9. Use a commission-based pay system. As revealed in the litigation covered in other posts on this web site, DHR employ consultants on a commission-based model. It means that fixed costs are very low. If consultants sell assignments, then they get a higher payout than they would at the leading global firms, but DHR International still keep the majority. 
  10. Hold onto commissions for as long as possible. According to the publicly available information in the lawsuits posted on this web site, some consultants are on an annual commission plan where commissions are paid in April of the following year: this means that DHR International have the benefit of the "float" of fees for an average of ten months! Where disputes arise, they tend to happen in the lead-up to the commission payment in April and DHR International gets to keep over a year's worth of commissions.
  11. Keep costs low. Compared to superior firms, DHR do not invest much in anything other than PR. For example, the lawsuits on this web site show that DHR get consultants themselves to fund their own business development e.g. taking clients out to lunch. 
Very often - at least as shown by the list of ex-consultants in another post and the number of court cases uncovered by this web site - DHR International and the consultant end up in dispute. So, for example, if there is a profit share arrangement, DHR International (as it is owned by one family) are not transparent as to the financials and ensure the books for the region or practice group show they are loss making. See, for example, the post regarding Adam Charlson

If you are a prospective DHR client: be careful - given the amount of turnover amongst DHR consultants, are you sure the person you are engaging will be there for the duration of the search? See CDI's experience when Gayle Mattson disappeared in the middle of a search.

If you are a prospective DHR consultant: be careful - are you sure that DHR will honor its promises or will you have to sue them to get what you are owed? Why don't you speak to some of the people below and make sure you know what to expect? If you are a half-decent executive search consultant, then you should take references even if they may not support the picture your prospective employers are giving to you. We've made the due diligence easy for you: look through the list of ex DHR consultants and contact people you know.

If you are a prospective DHR acquisition target: also be careful - are you sure that DHR will honor its promises? Why don't you speak to some of the people at the firms acquired by DHR and make sure you know what happened.

July 10, 2015

DHR International are #1… in litigation

Update July 10, 2015: additional lawsuits involving DHR - thanks to tip offs from readers

An anonymous comment from a reader in the UK noted "DHR International seems to be involved in a *LOT* of court cases." They went on to ask "Is this normal for search firms? Is this normal in the US?"

So, we have done some research and the answer is DHR are #1 out of all the search firms in terms of the litigation they are involved in. At least we have found a metric where DHR can claim to be #1 and be honest about it. We know DHR International claim to be #1 in geographic reach, when they are really #23 at best. We wonder if they will put this true #1 statistic on their web site?

DHR International, David Hoffmann, Geoff Hoffmann and their associates have been sued by clients, consultants, researchers and shareholders. They have sued consultants, clients, lawyers, accounting firms and insurers. 

We have identified at least 24 cases from over the last few years where DHR International have been involved. Other larger search firms have been involved some litigation, but nowhere need as much as DHR International. In undertaking this exercise, we actually found new lawsuits involving DHR International. If you know of others for DHR International or the larger, more reputable search firms, please let us know and we will update this list.

DHR International: 
  1. Adam Charlson v. DHR International, Inc., Carol Hartman, Christine Abrams, Geoffrey Hoffmann, Douglas Black (2 related suits)
  2. DHR International, Inc., Geoffrey Hoffmann, and Douglas Black v. Travelers Casualty and Surety Company of America (2 related suits)
  3. CDI Corporation v. DHR International, Inc.(2 related suits)
  4. Jeff Dandurand v. David H. Hoffmann
  5. Robert E. Reilly, Jr. v. DHR International, Inc. and David H. Hoffmann
  6. Hoffmann v. Deloitte Touche
  7. DHR International, Inc. v. Adam D. Charlson
  8. DHR International, Inc. v. Winston and Strawn
  9. (Principal) v. DHR International
  10. DHR International, Inc. v Debra Pollick and Battalia Winston International, Inc.
  11. DHR International v. Brian McGowan
  12. HDRN Pty Ltd v. DHR International Pty Ltd, David Hoffmann and Margaret Dillon
  13. Fallya Petrakapolou v. DHR International, Inc.
  14. DHR International, Inc. and David H. Hoffmann v. Federal Insurance Company 
  15. Official Committee of Unsecured Creditors of Metro v. DHR International, Inc
  16. Prime Retail LP v. DHR International, Inc.
  17. DHR International, Inc. v. Harris et al 
  18. DHR International, Inc. v. Accounting Professionals Fin. & Tax Serv., Inc
  19. Angela Torres v. DHR International, Inc.
  20. Harley v. Minerals Technologies Inc. (DHR were a party)
  21. Sandusky v. DHR International, Inc.
  22. Graff v. Qwest Communications Corp (Martin Pocs)
  23. Laidlaw, Inc. v. Student Transp. of America, Inc. (Robert Reilly)
  24. Ellis v. Century 21 Department Stores, No. 2
Heidrick & Struggles
  1. Marshall v. Heidrick & Struggles, Inc.
  2. Madden v. Heidrick & Struggles, Inc.
  3. Fencl v. Heidrick & Struggles, Inc.
  4. Heidrick & Struggles International, Inc. v. Deussing
  5. Carrott v. Heidrick & Struggles International, Inc.
Korn Ferry
  1. Robert A. Damon v. Korn Ferry International
Spencer Stuart
  1. Robinson v. Spencer Stuart, Inc.
Egon Zehnder
  1. Kamal v. Egon Zehnder
Russell Reynolds Associates

           None discovered

CTPartners
  1. Discrimination suit
  2. Class action relating to share price