Gary Here is the system we have used for a few years with good success.
Seniority means nothing if there is obviously a better candidate available.
After the Managers are selected, each manager selects one coach. Both the manager's and coaches kids are automatically one the team but are slotted in to their draft roster based on their player ratings compared to the rest of the player pool. For example, if the manager and coach of a given team both have exceptionally talented kids, those will be their first two draft picks. However, if the manager and coach of another team have more average rated kids then their kids will be slotted in lets say as 5th and 6th round draft picks for their team. This system gives what we feel is the best balance between letting the manager choose a person who he likes and knows he can rely on to assist him with coaching the team without letting him lock in a lot of additional coaches up front.