There is a war going on in the legal industry. It is a war for talent, a war to get the right lateral attorney. So many firms are trying to grow by recruiting established lawyers with big books of business. Sometimes this is a good strategy that works, sometimes it does not. Actually, I was recently told by a colleague in the legal industry that a successful lateral recruit only happens 5% of the time. I have no idea what this comment was based upon or if it’s even true. Nor do I know how she is defining success. I do know, however, that law firms need to be careful when bringing laterals on board. This is especially true when a lawyer leaves one firm to join a similar firm.
How does a firm increase the odds for success?
The first thing I suggest is that the law firm act like lawyers and do comprehensive due diligence. This blog does not discuss due diligence items such as background checks, ethics violations, and the like. Rather, I limit my due diligence comments here to marketing issues. I suggest all lateral recruits have a written marketing plan. This plan must require the following:
Budget – how has he spent marketing dollars and what was the tangible return on that investment. Additionally, how much money will they need at the new firm.
Clients – who is the client, how long has the client been a client, who are the decision-makers, what is the relationship with those decision-makers.
Goals – what are short-term goals and the tactics to reach those goals. For example, I will meet with all my clients over the next 2 months to introduce my new firm and reassure each how this move will benefit each.
Prospective clients – who are the prospective clients (including decision-makers), why this is a qualified prospect, why are they not yet a client, and what needs to happen to convert each prospect into a client.
Referral sources – who has historically sent work, how much work, why do they refer business, and what is the plan to keep it coming.
References – get and check references when and where possible. A recruit should have no problem giving references and permission to contact them.
Web research – do a quick search about the recruit. See if you can find any client reviews, affiliations with other law firms, or any other relevant marketing information.
Once this plan is submitted, a representative from the firm should sit down with the recruit and quiz her on the veracity of the plan. Go over any internet research that was found. Call references. And, an action plan must be created and the representative needs to monitor that the plan is being implemented. The recruit, actually a new hire at this point, should meet with the representative on the first 30, 60 and 90 days.
The costs of hiring laterals
Because there is much risk on hiring lateral attorneys who claim to have big books of business, it is important to minimize the risks. With risk, comes cost. Failure to do your due diligence may come with great costs. These costs may include:
- Headhunter fees;
- Disruption to firm’s compensation structure if laterals are being paid a premium; and
- Wasted marketing dollars with no ROI.
Focusing on lateral attorney growth and ignoring organic growth can have unintended consequences and even greater costs. What is going on out there is like free agency in baseball. There are bidding wars for talent with business. Not too many firms are like the Yankees where they can afford to overpay for a .200 hitter. Baseball teams with a strong farm system that develop young talent usually succeed more in the long run over those teams that throw a ton of money into free agency. In fact, even the Yankees have seen the most success by relying on home-grown talent. So, the moral of the story is to not forget the young talent. If young talent feels they are being overlooked for the “yet to be proven” free agent, they may leave. The replacement cost of this is immeasurable. All the investment in these lawyers will be lost forever.
Just remember, you should see red flags if a lawyer wants to leave one firm for another similar firm for similar money. What does your firm really have to offer over their existing firm?
We can help you with lateral attorney recruit due diligence and to make sure each has a sound marketing plan. Contact us at ed@ESQuisitemarketing.com or cady@ESQuisitemarketing.com to do all you can to get it right.