Lateral damage: failed hires cost London dear

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  • This is interesting research, but I am rather sceptical about describing all lateral hires that result in a further move within 5 years as 'failures'. There are loads of reasons why people might move on, only some of which are connected with 'success' or 'failure'.
    5 years is a relatively long time in a professional career, and I think the culture of viewing people who have moved between a number of firms as suspicious or substandard adversely affects those within the profession. The 'trickle down' effect of this view allows firms to get away with exploiting associates to a greater degree than would otherwise be possible if there were less stigma about moving between firms.

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  • I agree to an extent. The term 'failure' is taken from various interviews with HR directors at law firms, and refers primarily to the firm's experience, in that if lateral hires stay less than five years, they have not usually contributed enough to the firm to become profitable; hence a hire that lasts less than five years could be said to have failed.
    Equally, I suspect that if you spoke to most candidates and asked them if they wanted to stay more than three years in post in their new job - which is when things start to go wrong if they're going to - they would almost certainly say they did. I would bet most of them would want to stay more than five years too - lawyers do not like moving, and for many good reasons.
    Having said all that, the reasons for things working or not are, as you hint and as I say in the article, are complex and varied.

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  • This is an admirable piece of work. I also wondered about the five year/failure paradigm, but the point is taken. It would be fascinating to see how these figures measure up against some comparable groups (Lawyers in NYC, Accountants and Bankers in London, for example). That 50 % of 2005 Partner hires have left by 2012 seems alarming, but is that figure significantly better in, say, Investment Banking or for Corporate Finance Partners in Accountancy?

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  • Thanks Rob!
    That would indeed be an interesting comparison. Taking up Mandy's point, I suspect there is a stigma to moving around in law which, as I understand it, does not exist to the same degree in, say, banking, where in some areas if you stick around more than two years you might be considered to be stale.
    At the moment in law, lateral hiring is a high-cost model which does not work quite a lot of the time, and is one which can be very high risk for the partner or partners moving. Your career will survive one failed move, but a second one can be the beginning of an inexorable downward movement in status and compensation.
    The risk of moving is rarely, imho, covered off with candidates by recruiters, who have every interest in moving them (and don't really need to concern themselves with how long the lawyers remain in post after having placed them).

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  • Interesting research and confirms my assumption that law firms tend to buy first and ask questions later when approaching lateral hiring.

    Would be interesting to know the comparisons in attrition between when firms instruct headhunters to scour the market / undertake due diligence and when they hire partners because an apparently great opportunity knocks on their door. As with many things when an opportunity looks too good to be true, it generally is...

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  • James
    You raise a very interesting point, and it's an area I'd love to look at in more detail (and may yet do...)
    My own view, for what it's worth, is that in a headhunting/search situation, law firms often 'fall in love' with their desired candidate and make additional concessions during the process. The candidate often feels 'wooed' and is content for the law firm to make all the running. The pressure on the hiring department to make the hire is huge, and compromises are often made in the business planning process.
    In contrast, with opportunistic situations the onus is on the candidate to demonstrate why the law firm should take them on. The business plan tends to be a lot stronger but, arguably, there is often less internal buy-in and that may lead to a trickier recruitment context, with less support forthcoming from incumbent partners. I suspect the failure rate might be just as high, but for different reasons!
    I would like to see law firms being much tougher with laterals' business plans, but a precursor to that is getting their own plans fit-for-purpose and developing an understanding of how to construct and operate strong business plans throughout; only then can they approach laterals' business plans with any degree of confidence or understanding.
    When I was a recruiter I acted for a number of candidates who were rejected by law firms because their business plans were simply too good, and spooked the incumbents. A bizarre situation.

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  • A nice piece Mark, as always. Your point on business plans is interesting. I doubt if firms look at the business plans once the lateral joins. If firms were more rigorous about supporting and holding laterals to account to deliver the agreed plan over the agreed time frame, the % success rate would surely rise. Sadly, I have yet to come across a firm who takes this approach.

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  • Mark - not sure if you are familiar with Bill Boorman? Recruitment guy who genuinely does think about things differently. He's been advocating a retention based fee model for a while now. Look up his tru unconferences (I know) - worth the time if only to get some different points of view. Here's a link to a piece Bill had in the latest edition of The Recruiter:

    http://www.recruiter.co.uk/opinion/time-to-reward-retention-over-introduction/1012849.article

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  • References taken, psychometric testing perhaps at any stage of the career...then it boils down to the gel with the new firm's culture and incumbents who may resent/accept the incomers. It's all competition after all, so it may be the best way to integrate is to perform but also to attend all of those out of work social gatherings that create the real "family" culture. As long as it's not like a certain "Firm" that Tom Cruise had the indubitable pleasure of joining.

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  • It would be interesting to see the same test applied to city - region lateral hires.

    In the regions, there are some awful partners taken from London firms.

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