Inside Straight: Loving Laterals

Ed. note: This is the latest installment of Inside Straight, Above the Law’s column for in-house counsel, written by Mark Herrmann.

Why are lateral partners like pigs?

No, no! I didn’t mean it that way!

I’m just remembering the line from George Orwell’s Animal Farm — “Four legs good, two legs bad!”

Thirty years ago, law firms took pride in having only homegrown partners: “Homegrown good, laterals bad!” There was a certain logic to that. If you’d worked with a lawyer from his first day out of law school or a clerkship and seen the lawyer progress in the law, then after six (or eight, or ten) years, you had a pretty good sense of that human being, both as a person and as a lawyer. When you made a partnership decision, you could be fairly comfortable that you were working from a decent base of knowledge.

Law firms knew this, and they flaunted it.

Places bragged that all (or nearly all) partners were homegrown. Firms tried to convince their lawyers to stay put. (In 1979, one former Cravath lawyer told me that the firm had a mantra, “You only leave Cravath once.” There was no going home again.) Firms didn’t hire laterals, and firms bragged about it: “Homegrown good, laterals bad!”

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That was then; now is now. Based on where I sit, on the receiving end of many law firm marketing communications, times have changed….

I understand that the world has changed, that firms now fret about profits per partner, and that some partners view themselves as free agents, available to the highest bidder. I’m not here to deplore that situation. But I’m scratching my head about why firms affirmatively brag about how they’re bringing in large numbers of lateral partners.

Here’s what I’m thinking:

After a decade of working with a homegrown lawyer, you know what you’ve got. If you invite that person into the partnership, you’ve made a fairly educated decision. You know what you’re getting, and you’re exercising real control over the quality of your partnership. When new people are considered for partnership in the future, you can generally trust the feedback that you’re getting from existing partners. If one of your partners says that “associate X” is a fine lawyer and person, you know what that means.

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Laterals are a different story. You haven’t watched those people mature from taking their first legal steps to becoming fully competent lawyers. You generally haven’t worked as long, or as closely, with partners from other firms as you have with your own colleagues. You’re not as confident in the laterals’ qualities — both personal and professional — as you are in your homegrown folks’. In those respects, at least, you’re taking some risk when you bring in a lateral. You hope the person’s good and trustworthy, but you may not yet truly know.

This doesn’t mean that it’s bad to hire lateral partners. If you need more biotech IP capacity in Los Angeles, you may have to hire a lateral to fill the gap. If a guy with an outsized reputation (or book of business) comes on the market, signing that free agent may improve the whole team. And, after you do this, I understand why you’d brag about having brought on the new recruit: You made a move, so capitalize on it. Publicize it. Issue a press release that you have a new biotech IP guy in LA, so clients know about your new capacity. Tell the world that you brought in a hotshot; maybe that’ll attract more business.

What I don’t understand is this: Why do law firms brag — both on websites and in brochures — about the sheer number (not the names, and not the expertise, but just the number) of lateral partners they’ve recently hired? “We snagged Joe Smith, biotech guru” serves a purpose; I might want to hire Smith. But, “We’ve hired 15 lateral partners in our midwest region in the last three years alone” mystifies me. What purpose does that serve?

Why would you brag about hiring scads of laterals in the aggregate? If that serves a marketing purpose, I’m missing it. I’m surely not more likely to retain your firm because you’ve recently brought in a bunch of unnamed and undifferentiated laterals. If anything, I’m somewhat less likely to retain you, because your firm may have started to lose quality control and a sense of collegiality or professionalism.

So why do firms engage in this type of boasting? Is it to prove to the world that your firm must be profitable, because otherwise you couldn’t have poached partners from other firms? That might impress someone, but I can’t believe it impresses clients or potential clients. Are firms doing this to offset bad publicity, because they recently lost a bunch of people to lateral moves? Maybe, although that logic seems pretty murky, and this type of boasting doesn’t seem to be limited to those situations. Or does this just reflect the pride of the partner who’s doing the lateral recruiting? (“I was asked to beef up the midwest region. I’ve done a great job, if I do say so myself. So by God we’re going to flaunt my success!”) Maybe that’s what prompts this boasting, but you’d hope that calmer, more disinterested minds would intervene.

I just don’t get it. This new type of marketing is like chanting, “Homegrown good, laterals better!” Which is why I started with pigs, and the revolution at Mr. Jones’ farm: “Four legs good, two legs better!”

Earlier: Prior installments of Inside Straight


Mark Herrmann is the Vice President and Chief Counsel – Litigation at Aon, the world’s leading provider of risk management services, insurance and reinsurance brokerage, and human capital and management consulting. He is the author of The Curmudgeon’s Guide to Practicing Law.

You can reach him by email at inhouse@abovethelaw.com.