Most good firms set a minimum book: do not bring us anyone under $800,000. It sounds like discipline, and it is the most expensive rule on the page, because it filters on the one number that tells you least and ends the conversation that would have told you more.
A book is not a figure. It is a set of relationships, some of which travel and some of which do not, worth different amounts at different firms. What follows is what actually determines the answer.
The same question, asked of a whole group
Sometimes common sense is more important than numbers.
Richard Brock, Win the Talent Game
First question
Not how big the book is. How much of it is genuinely hers.
Revenue attached to a person moves. Revenue attached to an institution frequently does not. A partner may sit on ten million dollars of billings and own the relationship behind only two million, and the difference is the entire valuation.
Courts draw the same line when a departure turns into a dispute, distinguishing a lawyer’s own clients from firm clients she has barely touched. We draw it before anyone relies on the number, because a portability figure taken on trust is a number somebody hoped for.
Ask it bluntly. If she left tomorrow and phoned every client herself, which would follow, which would stay, and which would go out to tender? A partner who cannot say has not valued her own practice, and you should not do it for her.
Why the minimum costs you
The book that was under the minimum, and worth almost $2 million a year.
Our founder presented a candidate carrying a $250,000 book to a firm with a $750,000 minimum. She also held a verifiable relationship worth more than a million dollars. The firm declined on the number. She went to another firm, and that one client became almost $2 million a year there.
How we run a partner-level search
Recounted in Win the Talent Game
A minimum is a filter, and every filter has a false negative rate. The question worth asking is not whether your minimum is right in general. It is whether anyone has authority to override it when the numbers and common sense disagree, and how often that has happened.
Worth to whom
There is no general figure. The same practice is worth materially different amounts at four firms in the same city, for reasons you can check before making an offer.
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01Conflicts that end when she leaves
Work she cannot take now, because her firm acts for the other side, becomes work she can take at yours. This is often the largest number in the valuation and the least often calculated, because it appears nowhere in her current billings.
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02Rates, in both directions
If your rates are higher, some of the book does not follow and the rest is worth more. If they are lower, the book may travel intact and bill less. Either can work. Assuming it simply arrives at your rate card is the error.
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03Whether the book can grow here
A larger footprint, a deeper bench, more practice areas. If a client has been sending work elsewhere because her firm could not staff it, you may be buying the practice she has and the practice she has been turning away.
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04What you are buying twice
Where the practice compounds a strength, it is worth a premium. Where it duplicates a bench you already have, you are paying for capacity and importing an origination argument. The second is worth less than the spreadsheet says, sometimes considerably less.
What it costs to land her
Money is the ultimate driver for most lateral moves, and it is still only one of the two things you pay with.
Cash, correctly understood
- Not buying lawyers, but offering a clear route to earning more on an ongoing basis.
- That route runs through the compensation structure, through conflicts that end when she leaves, or through a footprint that lets the book grow.
- In more than twenty years our founder has yet to meet a lawyer who wanted a pay cut. If your model needs her to take one, revisit the model.
Culture and camaraderie
- Culture is the second factor, and it is legible: the comp system, the work ethic, how partners treat the staff.
- Our founder has seen partners decline a raise over culture alone.
- The relationships at her current firm can hold her in place. The ones she sees at yours can pull her across. Your own lawyers are the most persuasive recruiters you have.
The one way to overpay that can end a firm
Pay a premium for a genuine superstar. Be cautious about guaranteeing it for years.
Significant overpayment of laterals on lengthy guarantees helped put a number of firms out of business, some of them among the largest in the world at the time. The mechanism was not subtle. They took on debt to fund the guarantees, and infuriated the partners already there, whose own compensation was lower and not guaranteed.
A one year guarantee is defensible, two on rare occasions. Three, four or five is where firms have historically written the check that closed them.
What travels
Seven questions about one partner’s practice. This is not a valuation. It estimates one thing, how much of what she bills would follow her across the street, and that is what sets the price.
The seven factors, in full
What the reader above is weighing, and what each answer points at. A book is not one thing: these are the parts of it that behave differently when a partner moves.
| What decides it | Helps the move most | In between | Works against it |
|---|---|---|---|
| When the client has a problem, who do they call? | Her, by name | Her team, and she leads it | The firm. She is one of several they deal with |
| How did the relationship start? | She brought it in | Inherited from a partner who retired | The firm assigned it to her |
| How does the client buy legal services? | One decision maker who knows her | A general counsel with a short list of firms | Procurement, on a panel, retendered on a cycle |
| What is the work? | Repeat work that recurs every year | Matter by matter, project driven | One large matter that will finish |
| Your rates against her current firm’s. | Similar, or lower | Somewhat higher | Materially higher |
| Conflicts at your firm. | None that we can see | Some overlap, probably manageable | A conflict with a client we will not drop |
| How long have these relationships run? | More than ten years | Three to ten years | Under three years |
What to verify before anyone relies on the figure
- Who at the client would notice if she left?
- Has the client renewed anything since she took it over?
- What has she added that the firm could not replace?
- When does the panel next go out to tender, and who decides?
- What is billed after this matter closes?
- Which of these clients has ever accepted a rate rise of that size?
- Which specific clients does the conflict remove, and what do they bill?
- How much of this existed three years ago?
We verify this before you rely on it
What is portable, what the conflicts release, what the practice is worth at your firm rather than in general. If it does not clear, we say so, including when the candidate is the one everybody wants.
Keep reading
Valuing a practice means asking for information, and some of it you are not allowed to have. Where the line falls in lateral diligence. Or the eighteen ways a lateral hire goes wrong, of which relying only on the numbers is the thirteenth on our list. The $250,000 story, told to the lawyer who was under the minimum: the minimum book myth.
The same book, from both chairs
Six pieces drawn from Win the Talent Game. Three for the firm doing the hiring, three for the lawyer deciding whether to move.
For firms
- Eighteen Ways a Lateral Hire Goes WrongFor firm leadership
- What You May and May Not Ask in Lateral DiligenceThe ethical wall
- What a Lateral Partner Is Actually WorthYou are here