Recent surveys conducted by the Citi Private Law Firm Group and Lexis-Nexis indicate that while lateral partner hiring remains as robust as ever, a large number of managing partners question the overall efficacy of such efforts. A recent article in the American Lawyer also focuses on the relatively low return on investment that produced by lateral hiring. What has not been written about as much is why such efforts often fail. One of the best summaries of that phenomenon (“Make Lateral Partner Hiring a Successful Investment”) was recently written by consultant Susan Duncan. Among the factors cited by Duncan:
- Firms tend to be reactive and not strategic. Too often, Duncan writes, “much of the lateral hiring process results from reacting to calls and resumes sent by executive search firms.” Instead, firms need to tailor their lateral hiring priorities with their existing strategic plan, and then affirmatively execute a recruiting strategy.
- Failure to develop the business case for laterals. Too often, she writes, firms make decisions as to what areas to focus on because “everyone else is doing so,” or based on anecdotal evidence of what their clients need. As recruiters, we rarely see the results of any client-based survey or any other market research that confirms the need for laterals with a specific expertise.
- Failure to effectively integrate the lateral. Firms often give lip service to having an integration program, but firms often fail to either provide real benchmarks or to make existing practice group leaders and others accountable for the success of the lateral.
We would add one other factor, and that relates to the preoccupation with portable business. For a variety of factors, including changing expectations of clients as to how their work is handled and the success of key client programs in protecting historic relationships, portable business is not as portable as it used to be. But firms still look at that as the number one criterion as to the attractiveness of the lateral. Based on that, the best laterals in their eyes are those that have very exclusive relationships with a stable of clients. Unfortunately for firms, many of those laterals tend not to be as interested in creating value for institutional or other clients. So instead, firms should focus on candidates that have a definitive business development record, but who also show a commitment to a team environment.
TMG’s Take is a regular e-mail advisory produced by The McCormick Group. The company’s Legal, Government Affairs, and Law Firm Management groups combine the expertise of more than 15 Consultants to help law firms fulfill all of their lawyer and administrative recruiting needs. TMG’s Take covers topics across the spectrum of law firm management, including associate and partner compensation, growth strategies, marketing and business development, operations and facilities management, finance and accounting, professional development, and technology. Please direct all inquiries to Steve Nelson, Managing Principal at (703) 841-1700 or snelson@tmg-dc.com.
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