Revealed: lateral partner hiring doesn’t work

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  • Not surprised by the numbers in fact I thought it would be worse.Fact is very few lawyers have the ability to build and keep practices and then to make them portable.
    Winning clients and work is the hardest part of the job and as a lateral your ability to do that is really in the spotlight.Building a successful practice at another firm is much much harder than imagined,anyone who has moved offices in their own firm can testify to just how hard it is to build a practice where you are known let alone one where you are unknown.

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  • This stems from the bizarre and unrealistic expectation that law firms have that the laterals they hire are going to be able to bring big "books of business".
    Laterals inflate their portable business to meet these expectations, because they do not get hired if they do not. Everyone is "surprised" when these expectations are not met, the love affair ends and the laterals move onto their next target. It is just a merry-go-round.
    If firms had more realistic expectations, then maybe this would not happen. But then again, law firms are managed by lawyers and they are not that smart so they get what they deserve.

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  • The "awkward sod" factor needs to be emphasised here as well. There are a number of serial movers who simply can't seem to find any sort of cultural fit at all, be the firm ever so small and collegial or a global behemoth. They're either impossibly egotistical, socially dysfunctional or just extremely difficult to please.
    Clearly, a number of firms could do their due diligence rather better; one or two have a habit of attracting these serial movers too often for it to be coincidence. However, some of the lawyers who are on their fourth, utterly different, firm in seven years or so are likely to defeat the nimblest HR genius or recruitment consultant. It is not a problem that will diminish over the next few years.

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  • Why the suprise? Greed is good. Or to rephrase - greed is good for headhunters. Simples.

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  • Agree with above, but there is another issue here and it is about why US firms hire in UK laterals. US firms are seeking to build market share in a market where the UK firms are holding onto their clients for dear life. If one looks at who advises the FTSE 100 one sees how little key advisers change.
    The other aspect is that great phrase 'institutional relationships'. When work dropped off in 2008/9 UK firms could not so easily point the finger at individuals and push them out. In a US firm, a newbie who claimed he was bringing X Bank, of Y Corporate, who then sees that work shrivel has no defence and nothing to fall back on. The US firm simply looks at the tiny income, the failed promises, and points to the exit.
    Final point, this seems to suggest that if US firms want to build solid UK practices then they will have to merge with UK firms - bringing aboard the institutional relationships and precious good will - otherwise the revolving door of failed hopes will remain in full-spin forever.

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  • Why does the fact that the individual moves on within this period mean that the lateral hire 'doesn't work' ? That depends what was intended by the hiring and what is left after he/she has gone....

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  • There is a definite point in Anonymous' 1.22pm response; what the research couldn't show was the reasons why each hire didn't work out. They are multifarious, and in many cases I suspect the firms were glad they didn't hang around.
    What is clear is that whatever the reasons for someone leaving, a partner leaving fairly soon after joining a new firm is going to have cost that firm quite a lot of money; one HR director commented to me that "any hire who stays for less than 5 years has to be considered a failed hire".
    My experience would suggest that firms want the 'package deal' when they hire a partner - a good team player who brings loads of clients, keeps his/her nose clean and is good to recruit around. The hire of a high-powered interim - such as can be very successful in business development, for instance - to kickstart a department is a perfectly viable strategy, but I would think rare in the extreme (unless anyone would like to correct me!)

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  • 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.

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  • Mark Brandon @ 2.57pm: "... what the research couldn't show was the reasons why each hire didn't work out." Surely that admission from the author of this research demonstrates that the research itself is of very limited value. What about law firm mergers for example? If I were to sign up as a partner with firm X and then subsequently found myself about to be absorbed within firm Y as the result of a merger which I had not been informed about in advance - or which perhaps was not in contemplation when I was going through the recruitment process - would that make me "a failed hire"? I might have delivered in spades for my new firm financially and non-financially but simply chosen not to be part of an organisation to which I had not originally agreed to sign up.

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  • If only those who seem willing to pay for the dubious advantages to be had from the lateral hire did their homework the activity levels may decline and the success measured in how long partners stay may improve. When factoring in the visible cash costsof a lateral hire (recruitment charges and disbursements) together with the invisible costs of the inevitable disruption, consequential staff departures, frustrated promotions, loss of productivity, increased training, weakened partnership structures and more the net benefits can be little more than smoke and mirrors. The impact on margin for the acquiring firm is frequently negative when taking account of real costs.The only people who benefit may be the 3rd parties involved and the individual partner. The 'new' firm are highly unlikely to see a net economic gain in less than 4 years.
    What does it say for lawyers' sense of entitlement?

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  • Due diligence by recruiters... you mean other than getting a person's details off the firm website?

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  • Those who are critical of lateral partner hires overlook the fact that many home grown partners add nothing to their firm in terms of new business development; such individuals achieve and maintain partnership status by doing nothing more than keeping their heads down, getting on with the work in hand and currying favour with those in the firm's upper echelons.

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  • @Puzzled. You are correct, and for that reason, partners taken on by a firm which subsequently merged were not counted in the research, in order to maintain the original premise of their hiring. Nor were failed firms' (eg Halliwells) partners counted, unless they left before the firm collapsed.
    As to your other point, about the research being of 'very limited value', my main aim was to provoke a debate around the success or otherwise of lateral hiring by simply collecting the data. It would be practically impossible to collect data on why hires didn't work out, as the reasons are numerous and there are always two sides to every story!
    It is up to firms to judge success or failure according to their own objectives, but it is clear from people I've spoken to that a short-duration lateral hire is going to look expensive, and I know from my experience as a recruiter that it can be immensely damaging to a partner's career to have even a single short move on the cv.
    As I say in the piece, law firms usually move straight to recruitment as the solution to all their needs - including opening offices overseas - whereas if they spent a bit more time and effort planning, analysing and considering the wisdom of what they were doing rather than going for a highly unpredictable 'quick fix' (which often isn't either quick or a fix!), they'd save a lot of time, money and heartache in the process.

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  • If you read closely, the survey actually that more than half of laterals are still with their new firm after five years.
    And so the title "lateral partner hiring doesn't work" could have been written "lateral partner hiring works in majority of cases".
    Goodness.

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  • @Come Again
    How right you are; how easily 44% becomes 'nearly half' and from there a short leap to 'not working'...having said that, journalistic licence may be in effect, but it's still a pretty ghastly attrition rate given the huge costs involved.
    With the unique nature of each lateral hire, and the bewildering number of potentially influential variables, the fact that it works as often as it does is something of a miracle, and a testament to the flexibility (or bloody-mindedness) of the individuals involved.
    I think the big question is how many of the lateral hires who remain are either a) successful in reality and b) achieve what the firms hiring them wanted to when they first started out.

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