The Wall Street Journal recently jumped into the controversy over lateral partner hiring, saying that whether or not such gambles pay off “is an open question”. The Journal cited the much publicized article written earlier this year by Professors William Henderson of Indiana University Law School and Christopher Zorn of Penn State University that lateral partner hiring does not reliably improve a law firm’s relative profitability.
While studies do show that the results of recent lateral partner hiring are mixed, there seems to be a failure to distinguish between the mere buying of books of business (which many firms continue to do) and programs that focus on a long-term investment in talent. Those studies also ignore the importance of a firm’s lateral integration program. Many of the firms that have reported sustained growth over the past few years will attest that “effective” lateral hiring and integration is an indispensable element of their overall strategy.
These firms realize that strategic lateral hiring is perhaps the most effective client retention and acquisition strategy, which of course is the name of the game. In recent years, firms have been investing millions of dollars on key client programs, which are undoubtedly critical in today’s competitive environment. A well-implemented lateral hiring strategy can produce clients more quickly and less expensive than other client-focused strategies. And not just one client at a time.
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.
