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Revealed: lateral partner hiring doesn’t work

It has always puzzled me why lateral hiring at partner level has been so common in the UK legal sector. For example, it certainly doesn’t happen in the accountancy world to the same extent. The main argument in the legal sector has been that if partners’ client bases are portable, a good operator looking for a ‘challenge’ or more money can easily move to another firm offering that. In the accountancy world, the client is locked into the firm’s systems and processes, e.g. the audit process, and partners therefore find it harder to move with a ‘following’. These figures show, I suspect, that law firms are getting better at locking their clients in, so that lateral movers are finding it harder to take their clients with them. Certainly, if the firm is on a panel, even if the relationship partner moves on, the firm keeps the ‘institutional’ relationship by dent of its panel position. As others have already said, due diligence by recruiters and firms taking on laterals is going to have to get a whole lot more sophisticated in the future to ensure that the lateral hire is a commercial success for the firm.

14-Feb-2011

3:49 pm