Hiring a mid- or senior-level partner can be a good way for law firms to grow. But these moves don’t always work. How can firms best ensure the likely value of the book of business coming with the new partner? How can they best structure deals with lateral hires to both incent their new attorney and protect their firm? What steps can they take to help lateral hires make a successful—and profitable—transition? And how can they make sure that a targeted attorney is a good culture fit for their firm?
Erik Lioy, national managing partner for forensic advisory services, and Brad Preber, national managing partner for business risk services, recently discussed the challenges and best practices that law firms should consider when making lateral hires. Their thoughts?
On due diligence:
Brad Preber emphasizes the need to evaluate the quality and depth of the business and referral network a targeted attorney has, not just one or two larger matters in which they may have been involved. “Ask the recruit if you can talk to a few of their best clients and referral sources so you can get a first-hard representation of whether they will use your recruit in the future. Erik Lioy adds this thought. “When law firms bring in a whole team rather than just one attorney, they tend to do better.”
On structuring deals:
Preber says one key to properly structuring a deal is to “clearly define performance and behavior expectations” and to use a clear set of metrics to judge performance. Lioy agrees, saying “you have to have an agreement about what success looks like, and then a clear way to measure success against that plan going forward.” Both emphasize the need for flexible, performance-based compensation programs during the transition period.
On effective transitions:
Preber recommends assigning a liaison to new lateral hires, both to help them adjust to the firm and to provide an early warning system should any issues arise. “Through frequent contact with the liaison you can get feedback on how the new hire is doing and respond if there are any warning signs.”
On cultural fit:
For a major strategic hire, Lioy suggests firms consider hiring an industrial psychologist to ensure the target will be a good fit. “There’s study after study about the cost of a bad hiring decision. When you are hiring a mid-career or late-career rainmaker, it can be devastating to a firm.”
Listen to the entire conversation for more insights on how to best navigate the lateral hire process.
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National Managing Partner
Forensic Advisory Services
+1 704 632 6915
National Managing Partner
Business Risk Services
+1 602 474 3440