more lateral higher stats.
Lateral hiring/movement is the norm among larger law firms…
- 3,000 annual lateral partner moves between AmLaw200 firms- an average of 15 partners per firm per year!
- 96% of firms believe that lateral hiring is their most effective growth strategy
- Nearly 20% of AmLaw200 partners make some type of professional transition EACH year
- 92% of law firms believe there needs to be greater candidate transparency throughout the hiring process
…but lateral partner success metrics paint a bleak and startling picture.
- 75% of lateral partner hires FAIL
- 90% of laterals have trouble generating business at their new firm
- 48% of lateral partners leave within 5 years
- Of those laterals who do stay, nearly 50% fail to breakeven within 5 years
The total cost of failed laterals is large and growing:
- The cost of replacing a failed lateral is between 200 and 400% of the lateral’s first year compensation
- The acquisition cost of EACH lateral hire is between $2.3 and $4.2M
- The largest 400 U.S. law firms lose $9.1 billion every year due to failed laterals
Malpractice and conflicts issues due to lateral hires are troubling, frequent and expensive:
- 1/3 of AmLaw200 firms encounter client conflict problems
- More than 35% of firms experience a malpractice issue arising from a lateral partner
- The average loss (in paid claims) is 8X more for a lateral than for an incumbent partner
The need for transparency in the hiring process:
- 56% of law firms would like more information on a candidates’ personal conduct (social media)
- 86% of law firms would like more information on a candidates’ professional relationships
- 92% of law firms would like more information on a candidates’ practice