The Aspiring Lateral: Can You Take It With You?
You may be switching firms, but will your clients follow you?
Ed. note: The Aspiring Lateral, a new series from Levenfeld Pearlstein, will analyze a variety of issues surrounding lateral moves, drawing on the firm’s experience in the lateral market as well as the individual experiences of LP attorneys. Today’s post is written by Rob Romanoff, the Managing Partner of Levenfeld Pearlstein.
When it comes to the ultimate departure, you can’t take it with you. When it comes to professional departures, however, it’s a different matter entirely. Whether or not you can take it with you — that is, whether your clients will follow you to a new firm — is a very open question indeed, and a critical one in any lateral candidate’s recruitment.
But how much portable business is enough to catch the eye of suitor firms? How can lateral candidates even determine the amount of their portable business? And how do they actually go about moving it? Let’s consider these questions in turn…
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How Much Is Enough?
The answer, not surprisingly, is “it depends.” But that’s less satisfying than hearing a number, so let’s toss one out there: a $2 million book of business will open the conversation for an equity partnership at many Am Law 50 or Am Law 100 firms.
For those who haven’t reached that level, all is not lost. Across a range of firms, including the largest, a lawyer with less than $2 million in portable business can still be attractive. Here are three non-rainmaking attorney-types that will be desired by different firms, for different reasons:
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The service partner: Many firms have booming practice areas that need sheer manpower (or womanpower) more than new accounts. For such groups, a lateral’s book of business is significant as a validation of his or her skill set, but beyond that not overly important.
The practice-starter: Firms just breaking into a practice area may consider candidates with smaller books of business than they would consider for more established areas.
The draft pick: The Yankees build themselves through free-agent signings, while small-market teams build through the draft (or Sabermetrics, but that’s another story (affiliate link)). Similarly, instead of guaranteeing money to marquee laterals, some firms pursue the arguably wiser and definitely less risky strategy of targeting promising candidates early in their careers. I benefitted from this approach myself, when Levenfeld Pearlstein took me on as a 40 year-old with perhaps a bit more than half a million in portable billings. It has worked out well for the firm and for me, as it has for many others who joined our firm in the same way.
How Much Do I Have?
Lateral candidates can’t know how much portable business they have ahead of time, since ethics rules prevent them from dialing up clients and asking: “Would you follow me to firm X?”
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Still, they won’t get far in the interview process without coming up with an estimate. And it should be a reliable one. If it isn’t, the new firm will either find out in its diligence (which will include, at minimum, a check of historic billings, receivables, current work, and non-client references like potential referring attorneys), or, worse, after the lateral’s arrival. At that point, the fact that a lateral overestimated his or her portable business can become very awkward — and lead to a new job search.
The key to success in this endeavor, as with so many other issues in life, is simply being self-aware. In taking a cold hard look at their client rosters, potential laterals should be thoughtful about where the business came from, whether they are the primary person in the relationship, and who else has strong ties to the business.
I’m Moving . . . Now What?
This is another stage in the proceedings at which ethics concerns come into play, and a full discussion isn’t possible here. At a minimum, however, laterals are wise to: (i) be as accommodating as possible to firms they are departing, including giving plenty of notice; (ii) only contact clients with their firm’s consent; and (iii) have a clear understanding of their professional responsibilities. In my case, I hired an attorney to review my offer letter and provide other ethical advice.
You could call it an excess of caution, but I call it sleeping better at night. And in the sometimes-nerve-wracking lateral process, that’s a very good thing indeed.
Disclosure: This series is sponsored by Levenfeld Pearlstein, which is an ATL advertiser.
Chicago-based Levenfeld Pearlstein (LP) was born of the desire to create a different kind of law firm. While many firms promote a “value proposition” of high quality work, responsiveness, efficiency and reasonable fees, to LP, those are just the basics of doing good work for clients. LP’s focus is building business relationships with clients as trusted strategic advisors who understand their clients’ business and industry inside and out, seeking legal solutions that support the client’s long-term business strategy as well as short-term needs. LP’s top talent and entrepreneurial setting translate into the sophisticated skills and resources of a big law firm in a more manageable environment.
