The following is an excerpt from: The Lateral Lawyer®: Opportunities and Pitfalls for the Law Firm Partner Switching Firms, 2d edition (2014), by Adam S. Weiss
As an executive recruiter specializing in law firm partner placements, I am often asked to describe how the process of moving from one firm to another really works. I usually begin with an illustrative story.
Joe Lateral (not his real name) was a corporate and transactional partner in the Houston office one of the 20 largest law firms in the United States. Over time, Joe had developed a client base that included a mix of energy, technology, and industrial clients. In terms of actual day-to-day practice, his specialty was mergers and acquisitions (“M&A”) transactions on behalf of middle-market companies acquiring smaller players in their respective industries. However, as part of a strategic re-focus, Joe’s firm was in the process of concentrating its efforts on serving Fortune 500/Global 1000 clients—which were relatively less resistant to the rate increases that the firm was seeking to institute than were his mid-sized clients. Because the firm had announced—internally, at least—that it would be pruning partners and practices that did not fit its new model, Joe knew that he had to do something, and soon.
At the suggestion of a colleague whom I had placed years earlier, Joe called me to discuss his dilemma. As he explained, pressure was building from his current partners to increase his billing rate from the merely stratospheric to the extra-atmospheric—at the same time that Joe’s client base was already grumbling, and sometimes balking, at current rates. There seemed little possibility of compromise: either Joe had to raise his rates and risk losing the client base he had built up over his career, or he would face pressure from his partners to leave the firm.
Joe and I had several conversations about his practice, client base, and career goals. I then performed discreet (i.e., “no-names”) market research with prospective firms to assess their interest in a partner with a practice like Joe’s, and analyzed recent hires by major firms in Joe’s market. Based on my communications and research, several things became clear:
- Time was of the essence—Joe could see the proverbial writing on the wall
- While Joe’s roughly $1.4 million-per-year book of business was substantially below his current firm’s expectations, it was still well above the minimum required to get the attention of many other firms in the Houston market where he practiced
- Numerous other law firms in the area were keenly interested to acquire a partner with a practice like Joe’s
Keeping these factors in mind, I proposed to Joe an action plan: we would work together to identify law firms that specialized in serving clients similar to his own—middle-market companies with modest, but real, needs for high-end transactional expertise—and whose complementary practices, reputations, and cultures made them potentially attractive targets for him to explore.
The Action Plan
Having developed an action plan together, I set out to do for Joe what he could not realistically do for himself, given his status as a law firm partner and his limited available time:
- Contacted firms on a no-names basis to determine their interest in a partner with a practice like his
- Assessed recent placements and press releases to determine which firms were looking for partners like him
- Analyzed the partnership composition of firms in Joe’s market to identify opportunities that could be appealing both to him and to prospective firms
Perhaps most importantly, I consistently offered Joe something whose value he, as a professional counselor, could understand: my professional advice.
On the basis of our conversations and my research, Joe and I created a list of firms that met his requirements and were reasonably likely to extend him offers: regional and national firms serving mid-sized companies, with offices in several major metropolitan areas, substantial transactional capabilities, and billing rates that could potentially represent a discount compared with what Joe’s clients were being charged at his current firm. In particular, we reviewed these firms’ recent hiring trends, key personalities, and reputations in the market. Joe and I agreed to approach seven firms on the list as an initial burst, including several firms with which he was previously not at all familiar.
As expected, several of the firms were simply not interested. Some had recently taken on lateral partners and indicated that they were not in a great position to absorb additional new people immediately. Others determined that Joe’s practice did not provide them with sufficient cross-selling opportunities. However, three of the firms on the list expressed interest to learn more about Joe and his practice, and requested that I set up initial meetings to determine whether there might be a good fit.
At the firms’ requests, we scheduled interviews right away and began responding to requests for information about Joe’s client base, billings, and practice in general. As conversations with the three firms progressed, I worked with Joe to complete the numerous disclosure forms that each firm required, and we prepared for the firms customized business plans describing his practice, client base, and business development strategy.
Two firms made Joe attractive offers to join them. He chose the one that offered the best combination of compensation, benefits, and support for his practice specialty—serving the transactional and business requirements of mid-sized energy- and technology companies.
“Working with a recruiter was one of the smartest moves in my career,” Joe said later. He was right. Had he approached these firms on his own, or had we approached them one at a time instead of simultaneously, Joe would likely not have achieved the same excellent results. For example, had he contacted each firm directly, Joe would have undercut his own posture as a partner who, while not exactly looking for a new opportunity, was nevertheless amenable to having a discussion. From my position as a legal recruiter, on the other hand, I could convey the substantially more compelling message: “I found this great partner at a top firm, and I can bring him to the table if you are interested to learn about him and his practice.”
Likewise, when it came time to negotiate offers, I was able to explain to each firm that it had better lead with its best offer, because Joe was speaking with other firms as well. In other words, I, as a recruiter, was uniquely able to create a value-maximizing market for Joe’s practice. While Joe could have tried to accomplish the same, doing so would have put him in the uncomfortable position of potentially antagonizing the very people whose firm he wanted to join. In such situations, a recruiter’s objectivity can go a long way toward bringing the parties together smoothly and dispassionately.
If you are a law firm partner, whether your book of business is large or modest, you probably have more opportunities than you are aware of to move to other firms as a lateral. Regardless of initial motivation—be it improved compensation, expanded market opportunities, more sophisticated staff, a different billing structure, or fewer potential client conflicts—exploring the available options can benefit both you and your clients. Such was the case with Joe—who is now his new firm’s office managing partner and a respected member of its national corporate practice.