The Further Decline of the Portable Book Of Business is the first of a series of articles based on the recent DC Legal Market Briefing, held on September 20 by Sandpiper Partners and co-sponsored by The McCormick Group
At the recent Sandpiper Partners DC Legal Market Briefing, Kevyn Orr, the partner-in-charge of the DC office of Jones Day and Mike Egge, the DC Managing Partner of Latham & Watkins, both stated that their firms no longer consider “book of business” as an important qualification for lateral partner consideration.
At first blush, this seemed like a bit of a surprise. But when you consider the firms involved, it really wasn’t. Both are large, profitable firms that have a strong history of collaboration and collegiality. The truth is that they can take chances on hiring top officials from government, leading in-house lawyers, and even top practitioners from other firms who for one reason or another, can’t port a book of business. And given their respective platforms, they probably have a higher rate of success. At elite firms like Latham and Jones Day, success is much more dependent on the expertise of the recent lateral and her ability to sell as part of a broader team–as opposed to their ability to transform expertise and contacts into business without much support.
So despite the reservations about buying a “book of business” that were expressed at the conference, not much has changed. In virtually all of our meetings with firms looking to hire laterals, there is invariably initial discussion on a level of portable practice that needs to be met. Often there’s little discussion about potential, the lateral’s record as to cross-selling (in either direction), or even quality.
But slowly the concept of the portable book of business is losing steam. First, firms are well aware of the statistics that show the percentage of laterals that can ring even three-quarters of their projections is 50 percent at best. Second, the increasing efforts of clients to concentrate their work among fewer firms, to go to approved lists, and to emphasize law firm teams rather than individuals, are making transfers of clients from one firm to another more difficult. Finally, the candidates are becoming increasingly jaded about the lateral market in general. Too many times, we hear the comment, “they really don’t want me, they want my book of business.”
Firms often fail to realize that lateral partner recruiting is still a bit of a romance. When firms, either on their own or through recruiters, do things like setting a hard line on minimum book of business, demanding a lateral partner questionnaire after the first interview, or conducting a “Spanish Inquisition” into the candidate’s existing client base, they turn off many good candidates who perceive that the firm values dollars over quality or culture. As a result, the firm that least emphasizes a portable book of business most often gets the candidate who actually has the portable book of business.
We recently met with a managing partner of a regional law firm who offered a unique breath of fresh air. “I don’t care at all about a portable book of business. What I want to know is if that lawyer lost whatever book she claims, would she have the ability to rebuild it.” As the practice of law continues to emphasize collaboration and client service, more firms are going to need to adopt a similar attitude.
