Content area
Abstract
According to Risky Business: Rethinking Lateral Hiring, a survey by Decipher and ALM Intelligence, nearly 9,000 partners in AmLaw 200 firms made lateral moves from 2014 to 2018 and the total book of business moving through lateral markets is estimated to be $17.1B. According to the Decipher/ALM Intelligence survey: * 75 percent of lateral partners fail * 90 percent of laterals have trouble generating business at their new firm * 48 percent of laterals leave within five years * 35 percent of laterals fail to fit in at their new firm * 62 percent fail to bring their promised book of business * Of those who stay, nearly 50 percent fail to break even within five years * 30 percent of laterals delivered less than half their expected books of business How to Improve Success Rates If lateral partner recruiting is to remain your firm's growth strategy of choice, it would behoove you to put in place a better, more sound business approach to the recruiting process. [...]if all signals are a go, have an effective team ready to "sell" the candidate on your firm. [...]is it better to "lose the candidate" because s/he is impatient and feels insulted by your process or is pleased you are taking such care to ensure a mutually successful match? A Due Diligence Checklist * Obtain a certificate of good standing from the Bar. * Check for malpractice claims including contacting your state's board of investigative claims * Conduct criminal and financial background checks * Discuss/determine residual financial obligations and lawsuits from other firms * Review lateral's current partner agreement for any clauses that might have an impact * Seek a current health report and clarify any current health issues * Seek out more information on candidates' personal conduct, their professional relationships and their practice-don't take the candidate's Lateral Partner Questionnaire (LPQ) as the complete picture * Require a detailed business plan and evaluate how strategic, insightful and in line with your firm's vision/practice it is * Do a personality assessment to assess personal style and cultural fit * Consider the candidate's abilities in critical success areas: * Ability to generate new clients, be entrepreneurial and opportunistic- this is especially important if existing clients don't all follow him/her to your firm, which is likely * Approaches to practice and personal productivity, profitability and healthy financial practices * Client relationship development and service delivery * Opportunities within the firm's existing client base for the lateral to become involved, to add expertise or value * Team leadership, management, leverage, oversight and development of talent (the last thing most firms need is another solo practitioner only focused on