Back when we were all focused on raising our retention rate of associates, I also waved the flag about the poor retention rate we have with the lateral partners we hire–a musical chair game that has been in full swing for a number of years and seems to have survived or at least is being revived after the downturn.
What data we have implies that, while only about 40% of new hire associates last longer than 3 years, an even lower percentage of lateral partners do. Anecdotally, one can find rates that are astoundingly low–in some firms only one in 4 or more lateral partners work out.
These are particularly humiliating statistics because, in spite of the ethical constrictions on gaining client and current firm information, we still have MUCH more information about lateral partner candidates than we have about law school graduates: if we haven’t personally practiced law across from these lawyers or on the same side of the table with them, we usually have friends, clients or colleagues who have.
I was recently in a roundtable discussion with lawyers addressing this issue. One managing partner said that both the spectacular successes and the miserable failures of lateral hires seem like random events–how is one to guess? Another managing partner answered that he found that the reasons for a lawyer not working out are often right there in the pre-hire information–but no one paid adequate attention at the time.
Here are a few tips for improving your lateral partner hiring outcomes:
1. Don’t bother to proceed with lateral candidates who want to discuss compensation during the first conversations. Very few successful lateral changes are made on the basis of a step-up in compensation–those who make a move for that reason will find a reason to move again.
2. In making your financial calculations, don’t assume that the lateral’s book will materialize. Yes, that means you are primarily hiring the person for their expertise and not their client list.
3. Look for candidates who want a better platform and more support than they currently have, and make sure you can provide it. The primary reason for laterals leaving these days is failure to find the level of firm support for their practice that they expected.
4. Be careful of lawyers coming from an entirely different background–small firms, government or corporate counsel if, for example, yours is a big firm. There are many administrative and procedural differences in these environments, as well as substantive differences (conflicts are not something most of those lawyers have had to think about) that can wreck havoc.
5. Avoid the institutional drive to hire. Set up some roadblocks that require a stop and re-think or the momentum of the hunt will result in a hire whether it ultimately makes sense or not.
6. Plan carefully all aspects of a lengthy, detailed integration. Think summer associate program, but more substantive. Where the lateral sits, who the mentor(s) are, how your clients are introduced to the lateral, how the lateral’s clients are introduced to the firm, how the lateral will meet other firm attorneys and visit other firm offices, who will work for the lateral, which committees s/he will sit on, what type of specific training the lateral will need and when and by whom it will be provided–these are just the beginning of the long list of considerations. Feeling like an outsider is the second major reason that laterals leave firms.
7. Make someone accountable for the lateral’s success. This should be a partner of significant rank; it should not be a young partner or someone in the HR department. Make sure that this person also gets support and recognition, including having their role taken into consideration in the determination of their compensation. If you don’t pay for it, you don’t value it.