Is it the end of the road for lateral hires?

By Mike Jones, CEO, IV League Talent

Some recent studies have shown those running law firms something that they already knew but may '¨not have quantified: lateral hires involve huge costs and attrition, which together equate to huge risks. And yet, firms '¨persist in going down that route for '¨their star appointments.

In a study completed last year and published in Lateral Partner Hiring and Integration for Law Firms, Mark Brandon presented some stark statistics. He revealed that 44 per cent of partners '¨hired since 2005 were no longer with '¨the firms that recruited them.

What’s worse is the associated recruitment cost in making those hires – '¨a mind-boggling £150,000 per partner. It makes lateral hiring seem a very costly gamble whose downsides not only impact on the firm’s bottom line but also sap the time, energy and morale of those involved in trying to make their recruitment work.

The failure rate for the lateral hiring process suggests that, whatever may be the catalyst for moving, when the lawyer makes the leap and arrives at a new firm, he often finds more of the same. Nothing has really changed, apart from the nameplate on the building, the office location and the people he is working with. All past frustrations surface again soon enough, and the perfect marriage becomes the next divorce.

So, what are the options to head off some of these issues? I believe lawyers should become more demanding in seeking a different working environment and assess any promises made thoroughly. They should also exercise some self-criticism and assess their own strengths and weaknesses more thoroughly before making promises that they cannot keep.

Lateral hires fail as much because the individuals don’t match up to expectations as because their new firms disappoint them. Those using the move as a stepping stone to run a department, get onto the equity ladder or otherwise make an upward move must be able to walk as well as they talk.

Lawyers should also be clearer in defining their criteria for moving, making sure not to compromise on something that is really important to them. That route has dissatisfaction written all over it.

Law firms also need to spend more time reflecting on what they really want and why they are looking outside the business to make an appointment. Are they making an appointment because: '¨

• they need to generate more revenues; '¨

• they need to strengthen their partner base; '¨

• an important client requires specialist advice that they cannot provide from within the firm; '¨

• they are growing a particular practice area; or '¨

• they want to drive profitability? '¨

A better understanding of what is '¨driving the recruitment process and prioritising the criteria for recruitment '¨will assist in creating a longer lasting '¨and better outcome.

Firms also need to be realistic '¨about what they can offer. If they operate in a fairly rigid way, then hiring gifted entrepreneurial lawyers who crave flexibility will be a mistake. If they really want those persons, they need to be prepared to make adjustments to accommodate them.

In addition, firms need to ensure they provide the right kind of support for new recruits. Firms should examine their support infrastructure to see if they can cope with the needs of different types of people. One size no longer fits all, even (perhaps especially) at partner level.

mike@intrinsic-values.com