Revealed: lateral partner hiring doesn’t work
Almost half of lateral partner hires in London leave the firm they join within five years, and up to a third leave after three, exclusive research reveals.
The research not only highlights the instability inherent in the London recruitment market, but also flags up the different hiring patterns - and success rates - of UK and US firms.
The startling statistics show that a significantly higher proportion of the partners that US firms hire for the core areas of corporate and finance leave shortly afterwards.
Twenty eight per cent of all moves were at US firms over the five-year period, with considerably more departures in finance and corporate than at their UK rivals. In finance, 30 per cent of the partners hired in 2005 by UK firms had left by the end of 2010. In US firms the corresponding figure was 45 per cent.
US firms lost 42 per cent of their 2007 corporate hires by the end of 2010 compared with 29 per cent for UK firms.
The research, by Motive Legal Consulting, is based on 1,944 partner moves that took place between 1 September 2005 and 31 July 2010.
For more, see this week’s feature.
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Readers' comments (15)
due diligence | 15-Feb-2011 6:06 am
Due diligence by recruiters... you mean other than getting a person's details off the firm website?
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Bobby Diamond | 15-Feb-2011 11:17 am
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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Mark Brandon, Motive Legal Consulting | 15-Feb-2011 4:20 pm
@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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Come again | 15-Feb-2011 6:27 pm
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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Mark Brandon, Motive Legal Consulting | 16-Feb-2011 11:54 pm
@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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