Predicting Lateral Leaps: When Do Partners Move -- And Why?
Which three firms look like they might be shedding partners in the not-too-distant future?
Ed. note: This is the latest installment in a series of posts on lateral partner moves from Lateral Link’s team of expert contributors. Today’s post is written by Michael Allen, the Managing Principal of Lateral Link, who focuses exclusively on partner placements with Am Law 200 clients.
You would think that most lateral partners climb the proverbial Am Law 200 ladder to the “Holy Grail,” but our research has shown that predicting partner moves is not merely an exercise in linear extrapolation. Instead, myriad factors are relevant in predicting when and where a partner is likely to move.
Though the basic Am Law rankings are enormously useful in many aspects, they fall short in predicting lateral movement, at least if one adheres to the conventional wisdom that “bigger is better.” We have instead found that, on average, a lateral partner tends to move to a firm ten rankings below their previous firm. This is why we utilize a smorgasbord of other indicators, including PPP (profits per partner), firm reputation, practice size, and other analytics, to better match candidates to firms.
The foremost objective is to predict partner moves, which is why we utilize advanced statistics in our database to assess the likelihood of partner moves….
Our recent analysis of Q2 2013 has shown that lateral partners have each practiced at an average of 3.15 firms prior to moving to their new firm. Furthermore, each spends an average of 8 years at a firm before lateraling to a new one. We utilize several formulas to predict the likelihood of a partner moving, including comparisons like a firm’s net lateral losses in the last year, a partner’s current tenure over her average tenure, frequency of moves, and some additional basic psychological indicators.
The recruiting arena is a battle between proactive and reactive; some respond to the market, others try to predict market shifts before they happen. Most managing partners are surprisingly reactive to “opportunistic” hires, e.g., we will consider partners with $2MM+ in business, so keep us in mind. But this approach is less effective than defining a plan and executing with precision.
By combining our statistical analysis with a bit of practical experience and gut feeling, we have compiled a list of partners at several firms who may be primed for a move. Just to note a few, Weil Gotshal, Seyfarth Shaw, and Gordon Rees each have an abundance of talented lawyers whose skills may better mesh with other firms or who may be likely to move along in short order, according to the statistics.
To ascertain lateral leakage, we weigh several factors and look at different trends, including a firm’s recent leakage compared against the gains of similar firms. We also look at other indicators to determine whether these changes are indicative of an ongoing phenomenon or whether they are an isolated occurrence. These three firms exhibit many of the characteristics of firms we believe will leak a significant amount of lateral partners over the next few years. This is not indicative of their overall health or an ominous omen; it simply helps us maneuver the marketplace in a proactive manner.
Our goal is not to pilfer lawyers from firms on a whim, but rather to construct a mutualistic dynamic between firm and partner, because ultimately our relationships with firms and clients depend on immaculate placements.
Disclosure: This series is sponsored by Lateral Link, which is an ATL advertiser.
Lateral Link LLP is one of the largest legal recruiting agencies in the world, with 13 offices in the United States and Asia. Lateral Link has been recognized by the Wall Street Journal, The American Lawyer, the ABA Journal, the Daily Journal, and the National Law Journal for its innovative approach to legal placement. Lateral Link recruiters are former practicing attorneys who have consistently succeeded in placing partners, associates, general and corporate counsel into some of the most reputable law firms and organizations in the world.
