2020 Lateral Partner Satisfaction Survey

New Survey Shows Professional Growth and Cultural Fit More Important than Compensation in Driving Lateral Partner Moves

Lateral partners are largely satisfied with their transitions as firms continue to make progress in effectively integrating their new hires

Hanover, MD – January 14, 2020 – Lateral partners cited the ability to grow their practice as the number one reason for choosing their current firm, well ahead of compensation, according to the fourth Lateral Partner Satisfaction Survey released today by Major, Lindsey & Africa, the world’s largest legal search firm. They also cited lack of confidence in firm management and strategy as the number one reason for leaving their former firm. The survey was fielded in conjunction with legal market intelligence and research specialists Acritas and based on the confidential responses of 1,367 law firm partners across the United States and abroad.

• While “anticipated compensation” was only the sixth most important factor for partners in the selection of their current firm, more than two-thirds of all lateral partners enjoyed an increase in their compensation when they made the lateral move.
• Overall satisfaction with lateral moves was generally high. 86.2% of lateral partners are very or somewhat satisfied with their current firm, and 79.8% of respondents reported that they would still move to their current firm if they had it to do all over again.
• The high levels of satisfaction are due in part to lateral partners’ success in driving new business, with 66.6% of laterals increasing originations since joining their new firm.

“In today’s competitive legal industry, the successful integration of high-value lateral hires is crucial for firms’ growth strategies and partners’ long-term success and happiness,” said Jon Lindsey, New York founding partner of Major, Lindsey & Africa and author of the study. “That’s why we’re pleased to see high satisfaction rates among lateral partners and continued efforts by firms to integrate these partners effectively. The lateral partner market will continue to be a dominant part of firms’ competitive strategy in 2020 and beyond, and our research offers some key insights for firms looking to capitalize on this trend.”

Notably, the survey revealed that the financial due diligence undertaken by many lateral partner candidates is shockingly inadequate, and getting worse. Only 29% of respondents reported reviewing financial statements and other key documents before joining a new firm, down from 36.6% in 2014. Additionally, only 55.4% of respondents reported reviewing the partnership agreement they signed when joining, down from 60.7% in 2014.

“While it’s encouraging to see that partners are focused on ensuring that their new firms are a good cultural fit and meet their goals for professional development, it is concerning that so many partners still fail to undertake basic financial due diligence before investing in a new law firm,” Lindsey said.

Additional key findings include:

• Firms are continuing their efforts to integrate their lateral partners effectively, with integration scores similar to the results received in 2014, which were, at that time, a significant improvement from integration scores in 2006 and 1996.
• Male and female lateral partners notably differed on perceptions of firm culture. 38.7% of female respondents cited firm culture as a top factor influencing their decision to leave their former firm, compared to 28% of male respondents.
• Overall, gender had a limited impact on changes in originations. 66.6% of laterals increased their originations since joining their new firm (up from 62.7% in 2014); only 9.6% (11.9% in 2014) reported originations had decreased. Roughly the same percentage of male and female partners experienced an increase in originations, while a slightly higher percentage of female partners reported a decrease (11.5% vs 8.9%).
• Partners in some practice areas demonstrated greater due diligence than the broader trend. Litigators expressed concerns about the firm’s financial health more frequently than partners in other practice areas.
• While compensation guarantees remain commonplace for laterals, they are limited in duration with 21% of respondents reporting their compensation being guaranteed only for the remainder of the year and 40.7% receiving guarantees for the remainder of the year and the following year. 25.7% joined their new firm without any guarantee.

The full text of Major, Lindsey & Africa’s 2020 Lateral Partner Satisfaction Survey is available here.