TED MARTIN - MARTIN PARTNERS LLC
CEO Interview - published 02/03/2004

DOCUMENT # WAL110

TED MARTIN is the Founder and CEO of Martin Partners L.L.C, a leading

retained executive search firm. Throughout his career, he has been

instrumental in building senior management teams impacting businesses

today, from Fortune 500 to venture capital-backed firms. The New Career

Makers ranks him as the number one recruiter for venture capital

portfolio companies.  Ted is also a frequent speaker on leadership and

executive trends, including: McKinsey & Co.'s CEO Forum, Electronic

Commerce World, United Airlines/Hemisphere Magazine, Chicagoland Chamber

of Commerce, Kellogg Alumni presentations, Financial Executives

Institute and 6FigureJobs.com Seminar Series.  He has been a board

member of the Association of Executive Search Consultants (AESC) and a

founder and past Chairman of The Alliance Partnership International, a

consortium of retained search firms from twenty-three countries across

the world. He is an advisory board member of the Crestview Capital Fund

and holds community board positions including: The Chicago Architecture

Foundation, Kellogg Alumni Advisory Board, and St. Gregory School of

Boys. He was a co-founder of the Marcy Newberry Auxillary Board and

previous Washington & Lee Alumni Board Member. Ted is also a member of

The Economic Club, The Chicago Club, The Burnham Society, The University

Club, Illinois Venture Capital Association, The Executives Club of

Chicago, Indian Hill Country Club, and The Sheridan Shores Yacht Club.

He has received the Kellogg Alumni Service Award and the W&L Learning

and Leadership Honor Award. Prior to founding Martin Partners, Ted was

in the executive search business for ten years where he lead an office

for another leading executive search firm. He has held industry

positions in brand management with Wilson Sporting Goods Company and

Kraft General Foods. He holds a B.A. from Washington & Lee University

and an M.B.A. from Northwestern University's Kellogg Graduate School of

Management. Ted and his family reside in a northern suburb of Chicago,

where he is an active youth sports coach

Sector: Staffing

TWST: Can we start off with a historical overview of Martin Partners?

Mr. Martin: Sure. Martin Partners was founded in 1996 providing senior

level executive recruiting services to financial services and other

industries.

TWST: How does Martin Partners differ from a regular staffing company?

Is there any comparison between a staffing company and executive search?

Mr. Martin: We are an executive search firm. Two types of search firms

exist ' retained and contingency. We are a retained executive search

firm not a staffing company.

TWST: I was looking for our readers who may not understand.

Mr. Martin: A staffing company will have a database of resumes whether

they know the individuals or not; they will send resumes to companies

and if a person is hired, then they are paid. A retained search firm is

hired to represent the company and screen the top candidates available

in the industry. We are paid on retainer as we do our work, just like

McKinsey or Goldman Sachs.

TWST: Well, basically it is a cutthroat business you are in, so how do

you stand out? What is the competitive advantage that you have over some

of the other firms in your field?

Mr. Martin: We have a very distinct competitive advantage in terms of

our recruiting process; we leave no stone unturned and we cover every

single candidate in a market. This is unique. Rather than call the

potential candidates like other search firms to see if they are

interested in the position, we first reference individuals to identify

star players and then ask the star if he/she is interested in the

opportunity. We then take that list of our recommended candidates to the

client and say, 'okay, here are the top twenty people in this industry,

are you prepared to go after the top five; if so, here is what they are

worth in the market. If you don't have the financial appetite to go

after these individuals, then we suggest the next five.' Now that is

dramatically different than our competition. It is a lot more work.

TWST: How does the process work?

Mr. Martin: Here is an example. You are a reporter. Let's say I was

doing a search for the Chicago Tribune and they wanted a new financial

services reporter and I surfaced your name. Before I call you I would

call people whom you may have worked with in the past. I would say, 'Who

is the best reporter you know covering money managers?' And they might

say, 'Well, we don't have one here. We don't have a good one.' Then I

would take you off my recommended list. Or, let's say the response is

''we have a phenomenal reporter in Jeff Myers.' I would reference people

at your company, the Wall Street Transcript, and move on to your

competition, like the Wall Street Reporter, and ask for their best

reporter. They might say, 'Jeff Myers.' Now I have another reference

point that says you are really good, and once I have enough positive

references and I know you are a star, I can add you to my recommended

candidate list. This process is very time consuming and a lot of hard

work but incredibly effective.   Also you have to go back to the

difference between a retained and contingency firm. If you are a

contingent recruiter, you are proactively soliciting candidates saying,

'Let me represent you, I'll send your background to all of these

companies,' and you are not getting paid until the client hires your

candidate; then you are paid a fee.A retained firm is on the other side

of the fence. We are first hired by the client. For example, let's say

Goldman Sachs hires us and needs a new Head of Institutional Equity

Sales in Chicago. We then conduct that search and if a candidate doesn't

fit that particular search, we may add the candidate to our database and

still reference you for future searches but we are really only

interested in you if you are a potential candidate for our current

assignment.

TWST: What do you see as some of the challenges facing the company in

next 12 to 18 months?

Mr. Martin: The biggest challenge is to grow our financial services

business after the economic downturn. For example, searches for money

managers have been lighter in the past years. Our biggest challenge is

to grow that business again and be on the front end of being considered

for search work as financial services companies start to staff up.

TWST: Has the economy helped or hindered you being so sluggish?

Mr. Martin: The economy definitely has hindered us. The economy has

hindered the whole retained search business, because with a quieter

market, there is less executive hiring overall. However, we are still

winning our fair share of clients. You could argue that the economy has

helped us because it has put some of the smaller firms out of business.

TWST: What are some of the key issues in the executive search industry?

Mr. Martin: The key issues we face with financial services companies is

that the large investment banks and financial money centers are building

their own in-house recruiting teams. That's the biggest issue.

TWST: How do you plan to overcome some of these issues?

Mr. Martin: I think it will sort itself out because the people they are

hiring do not have the kind of expertise that we have in terms of

negotiating compensation packages, attracting outstanding candidates and

managing their internal clients.

TWST: Where do you see the company being in the next three to five

years?

Mr. Martin: If the Internet recruiting trend continues, I predict that

we sell out to a larger firm.

TWST: So you are looking though then at possibly an IPO or something in

the future?

Mr. Martin: No, I don't believe that search firms should be public. Two

companies have gone public in our industry, Heidrick & Struggles and

Korn/Ferry, and I don't believe it has served them well, in terms of

continued growth and increased market share.

TWST: Can you give us a little background Ted on yourself and the rest

of the management team in Martin Partners?

Mr. Martin: This is my 19th year in retained search. I joined the

industry in 1985 and I joined a leading executive search firm

headquartered in New York called Nordeman Grimm. I joined their Chicago

office, became the head of the office and grew the business

significantly. I was there for ten years and then my partners and I spun

the office out. We bought the office from the New York partners and that

is how we formed Martin Partners in 1996.

TWST: Is there anyone over at Martin Partners you would like to mention?

Mr. Martin: I would like to mention partners, Tom Jagielo, Paul Schmidt

and Kathleen Hajek.

TWST: Ted, how has the international market affected Martin Partners if

at all?

Mr. Martin: Well, the biggest effect is that the global instability has

caused weakness in the US financial markets adding risk to spending

money on hiring.

TWST: What is Martin Partners doing right now to get their message out

to the rest of corporate America?

Mr. Martin: Right now, we actually are not heavily knocking on doors.

The bottom line is that we rely on repeat retained business from our

current clients. If we do a great job and get hired to do another

search, we will continue to win searches with our clients. So we don't

do a lot of marketing; we rely on word of mouth and referrals. If we

have the capacity to do more work, then we target who we want to work

for and contact them, and try to get their next search.

TWST: Fair enough. I am going to give you the last word Ted, anything

special you would like to add?

Mr. Martin: I would add that the constant availability of data on people

and companies continues to erode the bottom end of the retained search

market, which forces all the good players to stay at the top. We have

only always played at the top where it's been all about managing the

client relationship, and negotiating between the candidate and the

client. And those two skill sets are ones that are not going to be

replaced by the Internet or by internal recruiting groups because they

can't afford to hire the top talent in their in-house staff. So we will

always be a viable business even though some people think that the

industry will disappear, or change to all contingency firms. The

brokerage industry has hundreds of contingency recruiters fighting for

business and, at the end of the day, they leave a more negative

impression than positive.

TWST: Thank you. (JM)

TED MARTIN

 Founder and CEO

 Martin Partners L.l.C.

 224 S. Michigan Avenue, Suite 620

 Chicago, IL 60604

 312-922-1800

 312-922-1813 ' fax

 www.martinptrs.com

Copyright 2003 The Wall Street Transcript Corporation

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