These days, with market conditions difficult, the issue of portable client billings – known as 'following' – has assumed a new importance. Many lawyers bristle visibly at the mere mention of the words. Some still regard it as somewhat of an impertinence to even ask, perhaps reflecting their own insecurity about being able to bring clients from one firm to another. Being a darned good lawyer should be enough, they feel. Unfortunately, that cuts no ice nowadays – welcome to the 21st century.
The definition of following is relatively simple, but tying it down can be a tricky exercise. Recruiters like to herald a headline figure, say £400,000, comprising an aggregate of annualised billings for 'portable' clients.
In reality, early fee generation is likely to be low as a senior lawyer settles into their new firm, recruits if necessary and gets out into the market. These first six to eight months (sometimes longer, rarely shorter) are the crunch time: do the promised clients come on board or do they stay with the original firm?
No lawyer can provide a 100 per cent guarantee that a client will follow, and a firm would be foolish to immediately 'buy' confident claims of portability. By the same token, lawyers who err on the side of caution can be penalised in this market, with firms unwilling to make a great leap of faith.
The truth is that clients will do what clients want to, restrictive covenants notwithstanding. (As a side point, is this not a somewhat ridiculous concept in itself, the idea that a customer can be 'owned' by its supplier?)
It is beholden on the acquiring firm to examine following properly; but it is equally important for the partner to ask themself the same questions before embarking on a business plan. It is here that an experienced recruiter comes into their own – advising on the right 'trigger-figure' (ie the headline following figure which will get a partner through the door at another law firm), and helping to create a credible business plan to back it up will make all the difference.
How solid and widespread are the contacts of the ostensibly portable clients? How consistent have billings been? Have historically high billings been dependent on one or two large deals or cases? Is there any idea of future deal/caseflow? How do these clients fit with the firm's existing client base and future strategy? One (positive) factor sometimes missed is the ability to bring clients not directly relevant to the lawyer's practice area (eg an IT lawyer bringing the property and employment work for their software company client in addition to the IT contract work).
Firms in turn can be blinded by 'trophy' clients or deals, and by the lure of a 'name' partner, when in fact the acquisition takes them off-track or causes internal disruption, which can fracture the entire practice. One often sees firms walk away too quickly or not be brave enough to say “no”, carried along in a heady whirl of enthusiasm for the chase and the prize.
At the end of the day, faith is the key ingredient for the acquisition: does the acquiring firm 'buy into' the partner? Does it believe that clients will come? A partner's ability to convince in person will have more bearing than anything else in bridging the 'faith gap'.
But dress it up how you like, following is more often than not what matters at the end of the day. And why shouldn't it? It would seem perfectly reasonable to an outsider to expect that after, say, 10 years in a particular business that a senior figure would have the ability to bring client relationships to a new firm in return for a hefty package in the hundreds of thousands of pounds region.
So the next time you're thinking about moving, ask yourself: “Would I hire me for my business?” If the answer is “probably not”, think about what might make you more marketable in the 21st century legal profession.