Where are the rainmakers in 2024?

If your law firm is like most – 79 percent, in fact – business generation is the No. 1 consideration for lateral partner candidates.

Given that priority, it’s essential to look beyond basic macro trends of lateral partner mobility, but to drill down to understand the market dynamics surrounding your most desirable candidates: the partners who will bring and grow profitable books of business.

In Decipher’s analysis of internal lateral candidate data from the past year, two notable trends emerge:

  • Rainmakers are moving far more in secondary markets than the biggest cities even after adjusting for location-based inflation.
  • The likelihood of a rainmaker’s business moving with them varies widely among U.S. locations.

Let’s dive in.

Secondary Markets See Lateral Boom

In November 2023, The American Lawyer’s Justin Henry reported on Big Law’s “infiltration” into emerging markets: “From Kirkland & Ellis kicking off a wave of elite firms moving into Salt Lake City to Holland & Knight becoming Nashville’s largest law firm overnight, Big Law firms have set their sights on developing markets.”

The data supports this.

In secondary markets, the average claimed book of business is $1,086,970. In seven of the nine secondary markets studied by Decipher, the average partner’s claimed book of business exceeds this category average. Moreover, in six of the nine secondary markets, the average partner’s claimed book of business exceeds the category average by more than 10 percent.

The markets with the highest variances include:

  • San Diego, where the average book is 109 percent greater than the category average;
  • Salt Lake City, 72 percent greater; and
  • Minneapolis, 70 percent greater.

Only two secondary markets lagged the category average: Detroit (2 percent under) and San Antonio (24 percent under).

By contrast, in major markets, the average claimed book of business is $2,806,653. Candidates in half – six of 12 – of the major markets reported books of business below this category average.

Of note:

  • The major markets with the most robust books of business included Silicon Valley, with an average candidate book 124 percent higher than the sector average; Miami, 34 percent; and San Francisco, 33 percent.
  • Five markets had an average reported book that lagged the category average by 25 percent or more:
    • Boston, where the average book is 25 percent lower;
    • Dallas, 33 percent lower;
    • Houston, 37 percent lower;
    • Atlanta, 42 percent lower; and
    • Philadelphia, 53 percent lower.

What’s driving the flight patterns in secondary markets?

As The American Lawyer noted, “firm leaders see an advantage to being a big fish in the small pond of an emerging market.” Established legal brands can command attention and market share — and at the same time, add some lower-rate personnel.

These new or growing offices need partners with local networks and established clients. But not every client relationship will automatically transfer…as our next data set demonstrates.

Betting on a Lateral Book? Heed the Location

Not only do laterals’ average business vary by city — so does the likelihood that they will bring over that work.

Indeed, according to Decipher analysis of recent lateral candidates, the average client portability rate is 64 percent. While there are some practice area variations, simply put, the “average” lateral will only bring about two-thirds of the number of clients they claim on the lateral partner questionnaire, and much less than that in actual business (about 50 percent).

But where that lawyer works makes a difference. Partners in Boston have the nation’s highest client portability percentage, with an average of 86 percent. Following closely behind: Los Angeles, at 81 percent; San Francisco, at 77 percent; and Houston, at 73 percent.

Meanwhile, the average candidate in Washington D.C. or Dallas will bring over just about half the work promised, with client portability rates of 50 percent and 53 percent, respectively. New York fares only slightly better, at 60 percent.

These three markets are among the most competitive for lateral placement; we see candidates attempting to portray themselves as attractive as possible in these cities.

What This Means for You

As you scout lateral candidates nationwide:

  • Assess true portability. More than 70 percent of law firms have had at least one lateral partner leave within 2 years for failing to bring over the promised business. Each one of these departures is a major loss – a financial loss, to be sure, but also a loss of time, resources, and sometimes, reputation. In the recruiting stage, it’s imperative to insist on a full and complete Lateral Partner Questionnaire, and to follow up with purposeful due diligence.
  • Understand the market. As this article demonstrates, legal markets are far from monolithic. Client portability rates directly affect the overall amount a candidate can bring to their new firm. The most successful law firms rely on actionable data to identify right-fit candidates, structure fair and competitive compensation, and grow profitably and purposefully. If your growth strategy includes investment in a specific location, start with meaningful market analysis.
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