As anyone who has ever sold a house (or car, or any item of property) knows, having multiple bidders is the best way to receive a higher sales price. So, too, with a lateral partner candidate who is considering taking his or her practice to another firm: speaking with multiple target firms at the same time is the best way to receive a superior offer. The best legal recruiters are therefore adept at generating several offers simultaneously for each candidate, thereby orchestrating a bidding war—whether explicit or implicit—for the fortunate candidate/offeree. In other words, good legal recruiters actually create markets for their candidates.
The key concept is simultaneity: offers need to be received, as nearly as possible, at the same time. In practical terms, this means receiving offers within a few weeks of one another so that the candidate is presented with multiple options at once. This approach, which I liken to an auction, has distinct benefits for the lateral candidate. Among other reasons, it is beneficial to receive offers simultaneously because they:
- Create a true market, in which multiple participants (law firms) compete with each other to offer the best package to a prospective lateral. This includes not just monetary compensation, but also the entire value of the opportunity to join a particular firm, some of which is within a firm’s immediate control (e.g., dedicated business development budget, support, etc.) and some of which is not (e.g., the firm’s reputation in a given practice area)
- Reflect a candidate’s actual market value, rather than the somewhat random value a single firm might assign to a lateral candidate
- Create a strong incentive for each firm to lead with its highest and best offer, rather than with the relatively stingy initial offer that they might extend if they were more confident of having an opportunity to negotiate back and forth as a sole interlocutor
- Are the only realistic way for a candidate to create actual negotiating leverage when dealing with law firms
- Compress the timeline of the recruiting process
- Reduce the emotional drain of switching firms, by avoiding, to the extent possible, a drawn-out process of offer and counter-offer
- Reduce the likelihood that a candidate’s candidacy will be discovered by his or her current firm
- Permit the lateral candidate and the recruiter to drive the recruiting process, rather than let a single target law firm do so
The foregoing has important implications for the lateral recruiting process. Most importantly, it highlights the benefits of approaching multiple firms at the same time, rather than awaiting an answer from one firm before pursuing other firms. For example, imagine a situation in which a candidate receives an attractive—but not outstanding—offer to join Firm A. If the candidate only then decides to approach Firms B and C, the offer from Firm A may grow stale—as of course the process will just be starting with Firms B and C. Firm A’s offer may not only be withdrawn or lapse; it might also set a low benchmark for later offers from Firms B and C.
Moreover, even if Firm A hasn’t actually imposed an acceptance deadline, delaying acceptance of its offer while one goes through the lateral process at Firms B and C would certainly leave a sour taste in the mouths of prospective colleagues at Firm A—nobody likes to feel as though they were a second choice. Similarly, Firms B and C might also feel that they were second choices, since they were not approached in the first volley. Firms B and C might also perceive—correctly or not—that the only reason they are being included in the mix is that the candidate is trying to leverage Firm A for a sweeter deal. Of course, putting Firm A on hold pending contact with Firms B and C would also be signaling that the offer from Firm A was not attractive enough to accept, thereby giving Firms B and C little incentive to make the best offers that they can.
By contrast, if a candidate is in discussions with all prospective firms at the same time, he or she can truthfully tell each one that:
- It is among his or her first choices
- Other firms are considering his or her candidacy
- He or she will weigh the relative merits of all offers upon receiving them. (A recruiter can also specify a time period during which it would be realistic to expect offers to be made, thereby giving the candidate some control over offer timing)
Not only does this put a positive spin on creating a market, it also gives each firm an incentive to make its decision more quickly than if it believed it had no competition.
Accordingly, lawyers considering making a lateral move are well advised to develop as ample a list of target firms as circumstances permit, and to approach all of those firms at the same time. The alternative approach—i.e., opening discussions with firms in seriatim rather than simultaneously—eliminates the benefits of creating a market, reduces the likelihood of a bidding war, and, potentially, annoys each firm approached.