To Compete for Laterals — Linger Not, Partners

Source: The National Law Journal

Firms need to act quickly and decisively to bring aboard the best recruits in a job-hopping market.

With lateral hiring more competitive than ever in an evolving legal market, a key determinant of a firm's success is its ability to intelligently identify, recruit and integrate partners. In our work we see a variety of approaches to lateral partner recruiting, some of which are particularly innovative — and others to be avoided at all costs.

Recruiting is wooing. When you are interested in candidates, show it. Let them know specific things you contemplate them doing together, with specific partners at the firm, for specific clients.

Momentum is vital. Many's the times we've seen deals fall apart — deals that should have happened — because a firm expresses initial enthusiasm and then goes completely silent for weeks at a time. Don't give candidates an opportunity to talk themselves out of love. Have a strategic vision for the firm and the practice group, and convey to candidates not only what that vision is, but specifically how you see them fitting in. Conversely, if the candidate does not fit the firm's strategic vision, move on. Opportunistic bolt-ons are not the road to long-term success unless they somehow can make the firm stronger, faster and better.

Often it is not the firm with best fit or highest compensation offer that wins a prized lateral candidate, but the firm that is best at recruiting. Firms that are good at making candidates feel loved and highly valued, that can articulate a strategic vision encompassing what the partner brings to the table, and that can move quickly to make an attractive offer, are often the winners in the lateral partner sweepstakes. They prevail over firms that may provide a better opportunity but cannot get their act together in time to demonstrate that to a potential candidate. If a leadership role is a possibility for laterals, make it clear at the appropriate time. Don't assume they will know you contemplate that possibility as part of their future at the firm.

Organize a due diligence session for laterals in the final stages of the process so that they can review the partnership agreement and key financial data of the firm (including key leases and loan documents, for example) and so that they can ask questions of the chief financial officer or appropriate member of firm management. That information is something every lateral should want to know in this day of increasing law firm failures. Shockingly, only 36.6 percent of the respondents to Major, Lindsey & Africa's most recent Lateral Partner Satisfaction Survey reported reviewing their new firm's loan documents, leases or other financial statements before joining, and only 60.7 percent claimed to have reviewed the partnership agreement.)

Maximize your relationship with a recruiter. Identify a small number of recruiters in your market whom you find to be intelligent, honorable straight-shooters. Take the time to educate them about your firm, the gaps in the lineup, and how to present the firm most effectively to lateral partner candidates.

Think long and hard about what makes your law firm special, different, unique and attractive, so that your recruiter can differentiate you from the scores of other firms seeking attractive laterals.

Be specific. Don't just say (as nearly every firm says) "We're a very collegial partnership," even though many are not. Talk about how partners have dinner together once a week, or how many are godparents to other partners' children, or go hiking together, or something else that makes the abstract real.

Law firms are big businesses and increasingly rely on business professionals to fill out the C-suite roster. It is important to have in-house professional assistance to recruit and retain lateral partners and to handle the very significant revenues associated with them. The function has become too important for busy partners, left to their own devices, to try to fit into their crowded schedules.

Get senior management involved at the right stage. Sometimes that means the chairman or chairwoman of the firm attends the very first meeting with a superstar to show how important it is to the firm ("kings talk to kings").

Be decisive. If you can't summon sufficient enthusiasm for a lateral candidate among the key decision-makers in your firm, end the discussion. The decision won't get easier by being beaten to death. Conversely, if you are enthusiastic, go for it. Don't be coy and don't be overly deliberate. For someone desirable you almost certainly have a great deal of competition. Give your recruiter honest feedback. Saying "it wasn't a fit" doesn't help us do better the next time.

CLOSING THE DEAL

Be creative. That's what lawyers do best when they are determined to reach their goal. You want the partner but she would be leaving behind a material amount of pension benefit, or a client conflicted from your firm. Don't give up. There are a dozen ways to make it work. The partner won't come aboard unless he has the right tax support, but you don't want to hire a tax person if the transactional work isn't going to come? Again, be creative. Solutions are available for nearly every issue, if the will is there and the numbers aren't wildly out of line. An experienced recruiter who has seen scores of firms negotiate hundreds of lateral partner deals may be able to assist in your brainstorming.

Be flexible. The man who waits for the perfect spouse is a career bachelor. You weren't perfect, yet your firm made you a partner. Don't do the thing that lawyers are trained to do — to look for risks without noting opportunities, to focus unduly on the flaws and the faults. You are making an investment, and like any other investments some will end up successful and others not. The key is to minimize the percentage of the latter.

Don't be penny wise and pound foolish. We have seen deals fall apart over trifling amounts of money because each side has dug its heels in and does not want to start a new relationship by (in their minds) backing down. Ultimately, nine times out of 10, it won't matter. If a partner ends up being a disgruntled disaster and leaves in a year, will anyone praise the hiring partner or committee for having hired him for $1.6 million instead of $1.7 million? And if the lateral ends up being a success, isn't it likely that she will have earned that extra $100,000, and then some?

Integration is crucial to long-term success. Often the most unhappy lateral partners are those whose firms failed to make them true partners with a stake in the enterprise other than a purely financial one. Lateral partners whose new firms made the most effective efforts to integrate them into the firm and its culture - including the nonbusiness aspects of making a newcomer feel "part of the family" - are most likely to register overall satisfaction with their move.

As MLA's latest Lateral Partner Satis­faction Survey report notes, no well-run law firm today would simply show a lateral his or her office and say, "here's the copier, here's your secretary, check in with us quarterly and let us know how you're doing" (as one firm did to one of our candidates in the early 1990s). An increasing number of firms, many with the assistance of consultants who specialize in this area, have devised and implemented robust integration programs that are more than just a checklist and lip service.

To be successful in implementing lateral partner hiring, firms need to be nimble, creative, flexible, decisive and visionary. Should be easy, right?

See the full-feature article on The National Law Journal, December 8, 2014.

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Jon LindseyJon Lindsey is the New York founding partner of Major, Lindsey & Africa, voted the "Best Legal Recruiter" by the readers of The National Law Journal, "best legal search firm in the United States" in Worldlaw Business magazine’s survey of the AmLaw 100, and "in a league apart" from other legal recruiters by The American Lawyer. Over the past two decades Jon has placed scores of partners and practice groups at many of the world’s top law firms and assisted firms in merger and branch office acquisitions. As the former Global Co-Chair of the firm's Partner Practice Group, Jon helped to set strategy and coordinate the partner practice for the firm’s 21 domestic and international offices. He is the co-author of "Managing People In Today’s Law Firm" (Quorum Books, 1995) and the 2014 MLA "Lateral Partner Satisfaction Survey."

 

Bob BrighamRobert Brigham is a partner in the San Francisco and Palo Alto offices of Major, Lindsey & Africa, and a member of the firm's Partner Practice Group. Prior to joining the firm, Bob practiced corporate and securities law at Cooley LLP in Silicon Valley for over 22 years, including 15 years as an equity partner. Bob’s practice is focused exclusively on counseling law firm partners on career issues, including helping partners to understand the rapidly-evolving Northern California law firm market and providing confidential and objective representation if and when they decide to explore moving firms.

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