With over 1,700 “Big Law” partners switching firms even during the pandemic year of 2020, and lateral acquisitions still a key driver of firm revenue growth, lateral movement remains a prominent feature of the legal industry landscape. Innumerable factors impel lateral moves—from the desire for a better practice “fit,” to superior cross-marketing opportunities, to frustration with aspects of one’s current firm or partners. But just as intimate familiarity with a jurisdiction’s rules of civil procedure will advantage the savvy advocate, familiarity with the Lateral Lawyer® Process gives the lateral candidate a leg up in dealing with other law firms. That advantage applies both during the initial phase of attracting and maintaining the interest of prospective firms, and also during the negotiating phase leading to an actual lateral move.
Lateral Lawyer® Group conceptualizes the Lateral Lawyer Process as follows:
The Lateral Lawyer® Process
Develop compelling story and business plan
- Articulate why you are amenable to a lateral move
- Examine practice metrics
- Create/refine business plan
Examine likely market
- Research firms
- Develop list of firms to approach
- Assess firms’ interest
Firms perform due diligence
- Complete Lateral Partner Questionnaires (LPQs)
- Meet (and impress) firm reps
- Furnish references
Orchestrate market for candidate among competing firms
- Negotiate offer letters
- Ask firms the “tough” questions
- Choose among competing offers
The first phase of the Lateral Lawyer Process is Consultation. Obviously, some lateral candidates contact prospective law firms directly, and partners occasionally reach out to friends at other firms to initiate a dialogue. However, in the typical case a prospective lateral partner will work closely with a recruiter to develop a compelling story and business plan—i.e., a description of one’s practice to date, and substantial information about one’s potential to build on that practice, especially if working from a superior platform than the current firm.
Among other benefits of consulting with a recruiter, doing so will help a partner articulate and sharpen his or her answer to the question, “Why are you looking to leave your current firm?” (An ideal answer: “I wasn’t looking, but I was persuaded by my recruiter that a conversation with you might illumen some possibilities I hadn’t been considering”). In addition, recruiters help partners examine their practice metrics and prepare to speak knowledgeably about such factors as rates, number of hours worked per year, team economics, and likelihood that clients will follow to a new firm. In many cases, recruiters also vet and provide informed feedback on a partner’s business plan—increasingly important as firms become more assiduous in performing their due diligence on prospective partners.
During Exploration, the second phase of the Lateral Lawyer Process, the recruiter and prospective lateral partner interactively examine the potential “market” for the candidate’s practice. This includes not only understanding other firms’ desire for the prospect’s skills and abilities, but also the attractiveness of his or her all-important client base to them. Any number of reasons may render one firm more or less likely to be intrigued by—or intriguing to—a prospective lateral candidate: the existence of cross-marketing opportunities or, conversely, potential conflicts, may drive the decision of which firms to include or exclude from the universe of active possibilities.
In practical terms, the Exploration phase comprises substantial research, both from public and private sources, about specific practices at other firms. It may also include no-names conversations with firm representatives about their interest to see candidates meeting particular criteria, or having particular skills or cross-marketing potential. The end product of this Exploration phase is a list of firms to approach to initiate a lateral dialogue.
The most time-consuming—and, to many candidates, the most “intense”—phase of the Lateral Lawyer Process is Evaluation. During this phase, law firms perform their due diligence on candidates, primarily through so-called “lateral partner questionnaires” (LPQs) and by interviews. Note that the Evaluation phase is definitively not the time for lateral candidates to perform their own due diligence on the prospective firms. Except to the extent that lateral candidates can glean information and formulate questions to ask the firm after an offer is extended, the due diligence performed during the Evaluation phase is by the firms alone. A candidate who asks the “tough” questions too soon—e.g., about compensation, recent departures, or anything even remotely uncomfortable—may be perceived as presumptuous at best and adversarial at worst.
LPQs typically require a 3-year look-back at billings and collections from all “portable” clients, as well as a history of total hours billed, annual compensation, and rates. Some firms also request a narrative of ones practice to date and a business plan. Because the often-voluminous responses represent a substantial investment of time to develop, lateral partner candidates sometimes tarry in furnishing the requested practice metrics. Accordingly, professional recruiters, who understand from experience that time kills all deals, may be particularly helpful in helping lateral partner candidates to complete their LPQs.
In addition to requesting the written information outlined above, law firms typically conduct several rounds of interviews with lateral partner candidates as part of the Evaluation phase. While a full consideration of how to succeed in the interview process is beyond the scope of this article, successful candidate will typically have made certain to cover the following five topics during interviews:
- Self: what makes you a good lawyer, advocate, and colleague?
- Practice: who are your clients, what are their needs for legal services, and what, if any, are the cross-selling opportunities that they present?
- Business development process: essentially, an answer to the question, “How do you get your clients?”
- Leadership: what is your track record and potential for leading a practice?
- Fit: an opportunity to discuss why you and your practice belong at the prospective firm—e.g., are there identifiable cross-selling opportunities, geographic or practice overlap, and complimentary client bases
Inasmuch as partner candidates are being assessed largely on their ability to generate revenue for the firm, it is particularly important to speak to business development issues during lateral interviews.
Unless one has made the mistake of speaking with only one firm—or with only one firm at a time—a market for a candidate naturally develops among competing firms during the Negotiation phase. Here, at the end of the Lateral Lawyer Process, it is finally appropriate to ask the “tough” questions of prospective firms, which would have appeared presumptuous to pose earlier, when it was still uncertain whether an offer would be extended.
There are no hard and fast rules about offers: firms usually have significant discretion as to compensation (both initial and ongoing), equity versus non-equity status, required billing rates, and the like. Accordingly, there may be some back-and-forth between the firm and the candidate (typically through the intermediation of a recruiter) to hammer out initial compensation details, even where an understanding of the general contours of a prospective offer may have developed earlier in the recruiting process. It is, however, axiomatic that the more offers a candidate receives, the more attractive those offers are likely to be. This is why recruiters seek to create a market among competing firms—something that individual candidates working without a recruiter often lack the experience or expertise to cultivate.
The prospective lateral candidate is well-advised to understand the Lateral Lawyer Process prior to seeking to move his or her practice to a different firm. That process, consisting of four distinct phases, gives structure to lateral movement and is well-understood by the firm representatives who are ones interlocutors. To create a market for one’s practice—i.e., a situation in which multiple offers are received simultaneously—prospective lateral partners will likely find a recruiter’s guidance invaluable.
For more information about making a lateral move at the partner level, call Lateral Lawyer Group at 201-LATERAL (201-528-3725)