Laterals: Dangers and Opportunities

So much for organic growth! An astounding 48% of new partners have changed firms before becoming partner, according to a 2011 ALM Intelligence survey. Two reasons disclosed in the report stand out. One was the opportunity for business development training at the law firms hiring these lawyers. The other highly rated motivation for “lateraling” was that the new firm required a 360-degree review of performance.

In other words, these lawyers want to be evaluated based on their ability to develop business.

Fair Is Fair

Non-partner attorneys recognize that, under most conditions but certainly in this marketplace, high-quality legal work is not and should not be enough for promotion. Meeting their billing hour requirements is likewise expected. And yet I continue to hear from senior associates and newer partners that their firms do not “tell me where I stand.” Absent both training and feedback, it's only to be expected that they'll look elsewhere for the bona-fide career development opportunities that they're going to need in order to succeed anywhere.

It is a long-observable trend that revenue-hungry law firms tilt toward recruiting laterals rather than first-years. They naturally target senior associates and junior partners with highly prized legal skills who can take on an assignment immediately. So it's no surprise to see that 88% of the new partners surveyed by ALM rank their ability to perform “first-class” legal work as important to becoming partners. Again, though, these lawyers are likely aware that such skills are only the table stakes.

More strategically critical as a recruitment and retention determinant, 44% cited the ability to pursue and engage new clients. Here's the cusp where laterals take on added value for the firms that hire them. These lawyers are, not only hungry to become better business developers, but often sufficiently committed to the sales process to have already built relationships with past and current clients. Portable relationships.

So voil', they have something tangible to bring to their new firms as well as an eagerness to learn more about how to enlarge that dowry after the nuptials. The 2011 Acritas Law Firm and Client Relationship Survey provides important insight in this context. Of the in-house lawyers who responded to the question, “Why have you started using a new firm in the last six months,” 9% said they had followed a lateral.

What law firms must know ' and the opportunistic hiring by some firms proves that they do indeed already know it ' is that these laterals are not all partners. The fact that some of those lawyers are associates looking for a better home to nourish their burgeoning business development skills strongly suggests that even more lateral movement is in the offing. Associates aren't fools, especially not in this economy.

Invest!

The message for law firms is to invest. Invest in your senior associates and junior partners by providing ongoing business development training and mentoring. If their performances require tweaking, so be it. If you've hired away talent from competitors who have fallen short in terms of these training and evaluation imperatives, seize the opportunity and make good on the very career development promise that attracted them to you in the first place. Don't stop with senior associates, of course, but also bear in mind that your new partners are vulnerable to raids from your competitors.

Conclusion

Once upon a time, but not so long ago, the defection of younger lawyers threatened law firms because it meant work interruptions and the perception by clients that your teams were unstable and your deliverables perforce inefficient. These days, those defections also spell more direct potential revenue losses as the business-getters with the most promise walk out the door and don't come back.

Allan Colman is the CEO of the Closers Group, a business development advisory and consulting firm. Contact him at 310-225-3904 or via e-mail at [email protected].

So much for organic growth! An astounding 48% of new partners have changed firms before becoming partner, according to a 2011 ALM Intelligence survey. Two reasons disclosed in the report stand out. One was the opportunity for business development training at the law firms hiring these lawyers. The other highly rated motivation for “lateraling” was that the new firm required a 360-degree review of performance.

In other words, these lawyers want to be evaluated based on their ability to develop business.

Fair Is Fair

Non-partner attorneys recognize that, under most conditions but certainly in this marketplace, high-quality legal work is not and should not be enough for promotion. Meeting their billing hour requirements is likewise expected. And yet I continue to hear from senior associates and newer partners that their firms do not “tell me where I stand.” Absent both training and feedback, it's only to be expected that they'll look elsewhere for the bona-fide career development opportunities that they're going to need in order to succeed anywhere.

It is a long-observable trend that revenue-hungry law firms tilt toward recruiting laterals rather than first-years. They naturally target senior associates and junior partners with highly prized legal skills who can take on an assignment immediately. So it's no surprise to see that 88% of the new partners surveyed by ALM rank their ability to perform “first-class” legal work as important to becoming partners. Again, though, these lawyers are likely aware that such skills are only the table stakes.

More strategically critical as a recruitment and retention determinant, 44% cited the ability to pursue and engage new clients. Here's the cusp where laterals take on added value for the firms that hire them. These lawyers are, not only hungry to become better business developers, but often sufficiently committed to the sales process to have already built relationships with past and current clients. Portable relationships.

So voil', they have something tangible to bring to their new firms as well as an eagerness to learn more about how to enlarge that dowry after the nuptials. The 2011 Acritas Law Firm and Client Relationship Survey provides important insight in this context. Of the in-house lawyers who responded to the question, “Why have you started using a new firm in the last six months,” 9% said they had followed a lateral.

What law firms must know ' and the opportunistic hiring by some firms proves that they do indeed already know it ' is that these laterals are not all partners. The fact that some of those lawyers are associates looking for a better home to nourish their burgeoning business development skills strongly suggests that even more lateral movement is in the offing. Associates aren't fools, especially not in this economy.

Invest!

The message for law firms is to invest. Invest in your senior associates and junior partners by providing ongoing business development training and mentoring. If their performances require tweaking, so be it. If you've hired away talent from competitors who have fallen short in terms of these training and evaluation imperatives, seize the opportunity and make good on the very career development promise that attracted them to you in the first place. Don't stop with senior associates, of course, but also bear in mind that your new partners are vulnerable to raids from your competitors.

Conclusion

Once upon a time, but not so long ago, the defection of younger lawyers threatened law firms because it meant work interruptions and the perception by clients that your teams were unstable and your deliverables perforce inefficient. These days, those defections also spell more direct potential revenue losses as the business-getters with the most promise walk out the door and don't come back.

Allan Colman is the CEO of the Closers Group, a business development advisory and consulting firm. Contact him at 310-225-3904 or via e-mail at [email protected].