Eighteen Ways a Lateral Hire Goes Wrong

Our founder calls this the biggest strategic mistake he has seen firms make. Holding still is not on the menu. Partners retire, move or die; the ones who remain get older; and in time the revenue sits with the lawyers closest to retirement, headcount has slipped, and the market has quietly filed you as an old firm. Now you are recruiting from weakness.

The five moves, and what each one costs

Adding headcount is not a reason. Know whether you are buying a market, a practice, deeper service to the clients you already have, or reputation in an industry. The answer dictates everything that follows, including which candidates are worth a conversation.

The first question we put to a firm is why a lateral should move to it. A larger footprint, more practice areas, a deeper bench, rate autonomy, reputation, compensation. If leadership cannot answer in a sentence, a good partner will not invent an answer on your behalf.

How we run a partner-level search

Assess honestly, strengths and weaknesses both, because the selling points have to be genuine. No firm can sell a deep intellectual property practice on the strength of two lawyers, and a partner who has done diligence on you will know.

The contradiction turns up constantly. A firm wants a lateral with a full, self-sustaining book, and it also wants that person to absorb the overflow work. There are only so many hours in a day. The answer is usually a good lawyer whose plate is about half full and who is hungry to fill it.

Respond inside 72 hours. A week reads to a good lateral as a firm that is not much interested, and laterals know their value in the market. Time kills deals.

One person in charge, from the first conversation to the signed offer. Genuinely organized firms are the exception, and the disorganized ones lose candidates to firms that are not obviously better.

Three meetings, four at the outside. Every meeting beyond that raises the chance the current firm finds out, and the risk is carried entirely by the candidate.

The managing partner is often the first contact a top lateral has with a firm, and sometimes the only one that matters. Day to day, one accountable person should own the process end to end, and that person need not be a lawyer. Our founder has watched internal recruiting staff block access to decision makers, at real cost to the firm.

If nobody inside the firm has the appetite, the expertise or the bandwidth to own this, our founder’s advice in the book is plain: retain a reputable search firm rather than run it half-committed.

Sometimes the right move is to wait. A conflict has to clear, a personal matter has to settle, a bonus date is coming. Forcing a timeline is how a firm loses a candidate it had already won.

Incompatible practice areas, rate discrepancies, mismatched expectations on hours and origination, conflicts, staffing, overhead, personalities, firmly held beliefs about how compensation ought to work. Any one of them can undo a hire the spreadsheet approved.

Most good firms set a minimum book: do not bring us anyone under $800,000. Our founder once presented a candidate whose $250,000 book sat under a firm’s $750,000 minimum, and who also held a verifiable relationship worth more than a million dollars. The firm refused on the number. That one client became almost $2 million a year for the firm that hired her instead.

In more than twenty years our founder has yet to meet an attorney who wanted one. If the model requires the candidate to earn less, revisit the model, not the candidate.

Significant overpayment on lengthy guarantees helped put a number of firms out of business, some of them among the largest in the world at the time. They took on debt to fund the guarantees, and infuriated existing partners whose own compensation was lower and not guaranteed. A year, or two on rare occasions, is defensible. Three, four or five is a serious mistake.

Both sides have to do it, and no amount of it guarantees success. It tells you which risks you are taking. The line between diligence that is thorough and diligence that breaches a duty is narrow, and worth knowing precisely.

Recruiting is selling. The candidate experience runs from how the receptionist answers the phone to how the compensation conversation is handled. Lateral attorneys are not looking for a job. They have one, and it is usually a good one. Firms that genuinely sell themselves are rare, and arrogance is a weakness your competitors will gladly exploit.

If there is a cardinal rule in lateral hiring, this is it. The candidacy is held in strict confidence, without exception. Almost always the prospect is exploring without her current firm’s knowledge, and it takes exactly one person to end the process.