Slight variation: Every player submits one or more brief PC concepts into a pool.
Everyone gets to read up on the (anonymously listed) character concepts, preferably in advanced via email before the session.
The DM (if representing an NPC) or the highest rolling player (if representing a 'leader' PC) represents a character looking to hire a team for a mission/quest. He picks one character concept, ie., a hero that is a friend, acquaintance or known just by reputation who he thinks would make a valuable contribution to the team.
The head character then asks the newly drafted character: who do you know that might be good for our team? ie passing the torch to the player of the newly selected character.
Proceed until all players have joined the team thru one of their submitted PC concepts.
If a player has already joined the team and submitted multiple character concepts, and one of their other concepts is picked, then the remaining unpicked player(s) can claim take that concept if they like it.
If a character is unclaimed for any reason, it means the character is not currently available.
If a player doesn't like or doesn't wan to pick any of the remaining concepts, the torch can be passed back to the preceding player. If nobody likes any of the remaining concepts, then the remaining players modify their submitted concepts ("remember? he wasn't a fighter, he was a paladin") or submit a brand new one.