The practice of law is centered around the idea of collaboration. A top-performing law firm is like a well-oiled machine, where all parts of the system work in tandem to achieve a greater outcome. The role of partner is critically important to the success of a law firm, often overseeing the core operations of the firm. Acquiring new partners can provide a valuable opportunity to bolster the firm’s practice, growth, and clientele.
While the opportunity is clear, it is simultaneously true that many newly acquired partners do not meet expectations or exit the firm shortly after being hired. Lateral partner hiring may be riddled with uncertainty, but there are systems and structures that a law firm can put in place to mitigate risk and increase the potential of success. At Decipher, this is precisely what we do. To learn more about how we can help, consider contacting us today.
Why Hire Partners Laterally?
Hiring partners laterally is becoming more and more prevalent, largely due to the benefits and opportunities for growth associated with this recruitment practice. In a joint study conducted by Decipher and ALM Intelligence, it was determined that between 2014 and 2018, there were nearly 9,000 lateral partner moves from one Am Law 200 firm to another. In fact, 97% of Am Law 200 firms made a lateral partner move in the past five years. Lateral partner hiring is clearly much more popular than many believe, and for good reason.
Our business is dedicated to understanding which lateral hiring practices are most effective and, in turn, how to make them more successful in the legal space. After working with hundreds of law firms, we understand the primary motivating factors that lead law firms to pursue lateral partner hiring as opposed to, or in addition to, other recruitment practices.
Expanding Revenue Growth and Market Share
Lateral partner hiring can be a valuable option for law firms that seek to increase visibility among potential new clients and naturally expand their book of business. When a new partner is recruited, the firm benefits not only from the newly accessed talent but from the book of business that accompanies the hire. Assuming that the law firm practices due diligence when hiring the candidate, the outcome of lateral partner hiring with the goal of expanding reach can be overwhelmingly positive.
Moreover, leveraging profit per equity partner can be a valuable way to attract new talent and gain market share. Top-performing law firms utilize pointed investments and long-term strategies to achieve sustainable growth. To this point, studies show that more successful law firms are expanding their equity partner ranks at a faster rate than the industry average. A major component of this is investing into partners, ensuring that turnover is limited and market growth is sustained in the long-term.
Strengthen Existing Practice Areas
Cited as the top reason for lateral partner hiring, strengthening existing practice areas motivates many law firms to outsource new talent via lateral recruitment. Many times, law firms will recognize the need to enhance pre-existing practice areas, and the options available to accomplish this goal are limited. The firm can choose to promote new partners from within the firm, develop the capabilities of existing partners, or laterally hire new talent. More often than not, the latter option provides a catalyst for the firm’s growth. By allowing the new partner to contribute new ideas and collaborate with existing talent on how to better optimize systems and strategies, both the law firm and the new partner can benefit greatly.
The Right Approach to Lateral Partner Hiring
To achieve great reward, one must first accept risk. This is true of lateral partner recruitment as well, which poses a fair amount of risk to both the law firm and the partner alike. It is essential to practice due diligence when hiring laterally to mitigate the risk of negative surprises and failed outcomes. At Decipher, this is a large part of what we do. We evaluate the lateral hiring practices of law firms and vet candidates for partner positions, ensuring that all hiring decisions are made with sustainability and long-term growth in mind.
Lateral partner failure rates are high, with 48% of laterals exiting their new firm within five years. There are right approaches to lateral partner hiring, but in many cases, it is easy to miss the red flags that are present during the screening process. To help with this challenge, having objective, measurable hiring procedures in place is critical. The following are two key strategies that law firms can leverage to prevent failure when conducting lateral partner recruitment.
Utilize the Lateral Partner Questionnaire
This is a law firm’s first line of defense when hiring partners laterally and a potential new partner’s opportunity to disclose all pertinent information. We provide a comprehensive, customizable template for your law firm’s use, but we advise developing this important document with an experienced professional at Decipher. Above all, when deploying lateral partner questionnaires, it is important to recognize that a lack of transparency can indicate deeper issues. If a candidate fails to disclose important information such as references or billing history, take a closer look at these matters during other stages of the hiring process.
Implementing a Consistent Due Diligence Program
The role of partner is incredibly important within a law firm’s structure. They serve as co-owner, key account manager, business developer, and supervisor to junior staff. When identifying and hiring a new partner, it is essential to vet candidates consistently and thoroughly. Due diligence is more than conducting a criminal background check, however, it is a suite of different protocols that a law firm uses to ensure that their candidate is up to firm standards.
Elevate Lateral Partner Hiring Practices with Decipher Investigative Intelligence
At Decipher, we operate under the central tenet of success. This can take many forms, but as it pertains to your law firm and legal career, it means objectively and quantitatively enhancing your revenue growth, market reach, and client relationships. Through our targeted, systematic approach, we have worked alongside countless law firms to implement better lateral hiring practices and create dynamic solutions to help achieve their goals. The consensus is in: top law firms are practicing lateral partner hiring. To discuss how to effectively integrate lateral hiring practices in your law firm, consider contacting us today.