Is lateral partner hiring a game of musical chairs that law firms can’t win? Anecdotes about unsuccessful lateral hires abound. You hear stories about high-profile partners moving from Firm A to Firm B, often lured by huge guarantees, only to leave Firm B a few years later, after failing to integrate or deliver the expected business.
And some of the most successful firms in all the land, places with immense prestige and sky-high profits, do very little lateral hiring. Their refusal to engage in the lateral market hasn’t seemed to hurt them.
When it comes to lateral hiring, should firms “just say no”? Well, that’s not what’s actually happening in the marketplace. Last year, lateral partner hiring climbed, suggesting that it must be working out — at least for some firms….
* I’m not usually the editor to comment on the appearance of shirtless men, but this Aaron Tobey kid looks fine. And righteous. [Wired]
* That sound you hear could be the student loan bubble starting to burst. [FICO]
* The Supreme Court’s DOMA ruling will have an impact on immigration reform. I’m kind of interested to see what happens, given that the Court contains at least four conservatives who are immune to the rising electoral power of Hispanics and gays. [Buzzfeed]
* Recruiter Scott Love offers tips on lateral partner hiring. Here are mine. Step one: throw money at them. Step two: Hire a prostitute to make love to them on a beach, then take pictures you can threaten to send to their spouses. Hey, it worked for Bendini, Lambert and Locke. [Attorney Search Group]
* John Quinn (of Quinn Emanuel fame) wrote a great article about running in Roppongi. I had to Google that. Apparently “running” is a forward locomotion that people do for fun or fitness. [Wall Street Journal]
* There’s still room to meet with ABA president Laurel Bellows and talk about women’s issues like “how am I supposed to get a job in this f**king economy.” That’s not to be confused with men’s issues like “dude, how am I supposed to get a f**king job in this economy.” [Ms. J.D.]
Ed. note: This is the latest in a series of posts on partner issues from Lateral Link’s team of expert contributors. This post was written by Tricia McGrath, Senior Director at Lateral Link, who works with partner and associate candidates on law firm searches, most often in the New York, California, and Washington, D.C. regions.
When a firm is considering a lateral partner candidate, the firm will perform due diligence on the candidate. The firm will be interested in reviewing materials such as a partner business plan and a lateral partner questionnaire, and will investigate and evaluate the partner and their practice. It is equally important for a lateral partner candidate to conduct his or her own due diligence on a prospective firm. As an equity partner, you will become part owner in a “business,” and should verify that there will be an appropriate return on your investment of time, energy, skill, and capital.
Of course, neither the firm nor the partner can ascertain with 100% certainty that a lateral relationship will work. However, appropriate due diligence can minimize the risk of failure, as important facts are revealed and future expectations can be managed. While there are many areas in which you’d like insight, three top concerns are (1) the firm’s financials, (2) the firm’s management, and (3) the firm’s culture….
Ed. note: This is a new series from Bruce MacEwen and Janet Stanton of Adam Smith Esq. and JDMatch. “Across the Desk” will take a thoughtful look at recruiting, career paths, professional development, human capital, and related issues. Some of these pieces have previously appeared, in slightly different form, on AdamSmithEsq.com.
Three years ago I published What Laterals Need to Know: A Modest Proposal, which essayed the thought that firms had an obligation to disclose certain information about the firm in advance to a prospective lateral partner.
At the time I wrote, I treated it more or less as a thought experiment, but we now see that shirking that obligation can come back to bite firms with sharp and large teeth right here in the real world, as seen in Henry Bunsow’s high-profile suit against Dewey’s former leadership (accusing them of running a “Ponzi scheme,” and alleging he’s out $1.8-million in lost capital, among other damages). The gist of Bunsow’s action is that Dewey’s leadership painted a misleadingly rosy picture of Dewey’s financial health, and failed to disclose its obligations in deferred compensation. Bunsow further alleges that former chairman Stephen Davis withdrew his own capital investment after he was forced out of his leadership role and “took those funds personally to the disadvantage of the firm and his fellow partners.”
My three-year-old proposal was that firms be obliged to prepare the equivalent of a Private Placement Memorandum for laterals — equally available to incumbent partners as well, of course.
I also noted that the reaction of most readers would probably fall into polar camps: That my proposal was “fascinating” or else “preposterous”….
Ed. note: This is the latest in a series of posts on partner issues from Lateral Link’s team of expert contributors. Today’s post marks the conclusion of a two-part narrative about lateral partner hiring, and was written by Larry Latourette, Executive Director of the Partner Practice at Lateral Link. You can read the first part here.
PROVIDE RECRUITERS THE INFORMATION NECESSARY TO DO THEIR JOBS (CONTINUED)
At the typical meeting with firms to discuss hiring needs, several partners will quickly go through a vague wish list (such as “IP litigators” or “government contract partners” all with “more than $2 million in business”), and give no more direction. When they are asked why a lateral might come to the firm, there is almost always a brief pause, followed by a blanket statement that the firm has a collegial atmosphere and a “no a-holes allowed” policy.
In contrast, with Dickinson, I met all of the D.C. partners to talk about what kinds of lawyers might best complement their practices, and had numerous follow-up discussions with both the individual attorneys and the hiring partner about what would and wouldn’t make sense. I also spoke to numerous lawyers in their other offices to get a sense of what kind of attorneys would be a good fit. Of critical importance were our detailed talks as to which existing and new business opportunities Dickinson might offer laterals, what leadership positions might be available, the recent steady growth of the firm, and where the firm was headed.
They also kept me informed about the process, which allowed me to bring further value. When one group I brought to them mentioned in a meeting with Dickinson that they were considering another firm, I put together a spreadsheet demonstrating that the competing D.C. office had lost half of the lateral partners hired in the last ten years. This was in stark contrast to the much higher retention rate at Dickinson. I later learned that the spreadsheet was a primary factor in helping to seal the deal….
Cravath partners enjoy discounts at Subway, among other perquisites.
It’s rare for partners to leave Cravath, given the prestige, pay, and perks associated with partnership at the firm. And it’s especially rare for a Cravath partner to leave for a rival firm, as opposed to a Wall Street investment bank or major corporation.
Cravath has a very specific system for running itself, and that system has served Cravath very well over the years. As its competitors expend increasing amounts of effort to climb the prestige hierarchy and expand across the globe, Cravath remains at the top, serenely servicing its clients — and printing money for its partners. Part of the reason why Cravath so rarely loses partners to other firms is that it’s so profitable overall that even a partner being paid under Cravath’s lockstep system still does better than a “star” partner at many other firms.
So that’s why today’s news is so notable. A prominent young partner at Cravath has decided to leave Worldwide Plaza and take his talents across town.
Who is the partner in question, and where is he headed?
Ed. note: This is the latest in a series of posts on partner issues from Lateral Link’s team of expert contributors. This two-part post about lateral partner hiring was written by Larry Latourette, Executive Director of the Partner Practice at Lateral Link.
The call came in on a dreary Saturday afternoon in November. A senior partner from the Detroit-based firm of Dickinson Wright was going to be in town on Monday and wanted to meet about lateral hiring for their D.C. office. Having been a lawyer at three D.C. branch offices (including a stint as managing partner for Preston Gates) and having attended dozens of similar meetings as a recruiter with out-of-town law firms, I didn’t have high expectations; almost all out-of-town firms think they can successfully compete in the brutal Washington market already rife with marginal offices on life support and shuttered offices of those that didn’t make it. Nevertheless, I agreed to meet since I always learn something from these encounters, and one thing life has taught me is that you never know how things will actually turn out.
The meeting and my subsequent experience reconfirmed that lesson as together we almost doubled the size of their D.C. office by adding 10 lawyers in the subsequent 15 months. While many firms do a decent job at partner recruiting, most have some weaknesses either in strategy or execution. Dickinson, however, put in place the best hiring structure and followed through as effectively as any I have encountered.
To bring more rationality to an often convoluted and inefficient process, the following distills the elements of that approach. While its solutions aren’t unique, the Dickinson model offers a useful benchmark from which other firms might improve their own hiring efforts….
Ed. note: This is a new series from Bruce MacEwen and Janet Stanton of Adam Smith Esq. and JDMatch. “Across the Desk” will take a thoughtful look at recruiting, career paths, professional development, human capital, and related issues. Some of these pieces have previously appeared, in slightly different form, on AdamSmithEsq.com.
A Wharton School professor has analyzed the performance, and pay levels, of external hires versus internal staff promotions. He used personnel data from a division of a major U.S. investment bank for 2003 to 2009, and the characteristics of that talent market are remarkably similar to our own.
Investment banking, Professor Matthew Bidwell writes, represents “an interesting context in which to study the effects of internal versus external mobility [because] organizational performance often depends on the skills of the workforce, [thereby] increasing the importance of personnel decisions.” In addition, workers in banking are “notoriously mobile, making this a context in which organizations regularly engage in external hiring at all levels.”
The genesis of his study was seeking an answer to this question: what has the increased mobility of workers over the past 30 or so years meant, as firms turn away from offering lifetime employment in favor of relying on the external labor market to find experienced workers at all levels of the organization?
Ed. note: This is the first in a new series, “Across the Desk,” from Bruce MacEwen and Janet Stanton of Adam Smith Esq. and JDMatch. “Across the Desk” will take a thoughtful look at recruiting, career paths, professional development, human capital and related issues. Some of these pieces will have previously appeared, in slightly different form, on AdamSmithEsq.com.
As noted in the American Lawyer recently, the lateral recruiting boom of recent years continues unabated. As the Am Law article points out, “At the same time [as they’re focused on hiring lateral partners], firms appear to be homing in on their poor performers. Nine out of 10 survey respondents said their firm has ‘unprofitable’ partners, and seven out of 10 said their firms have partners at risk of being deequitized or ‘put on performance plans.’ As one survey respondent put it: ‘There are too many partners without sufficient billable work.’”
Now, wouldn’t you think it would make sense — if firms are worried about underperformers — to pay some attention to associates as well as partners? After all, some of those associates should, speaking theoretically at least, be your future partners.
Yet there’s unrebutted evidence that firms look at the wrong criteria when hiring associates….
A college graduate without student loan debt is akin to reading a kind quote about Kim Kardashian in a tabloid—it’s rare.
In the past eight years, student loan debt has nearly tripled to a whopping $1.1 trillion, and in the past 10 years, the percentage of 25-year-olds with such debt has risen from 25% to 43%
It’s gotten so bad, in fact, that New York Fed economists warned last month that the burden of student debt could stilt consumer spending by twentysomethings, as well as further hamper the recovery of the housing market and economy.
To get a better idea of what massive student loan debt (we’re talking over $100,000 massive) looks like, we talked to an attorney who graduated with a large student loan debt. We also consulted LearnVest Planning Services CFP® Katie Brewer to see just how their repayment plans stack up.
S. Fischer, 36, Attorney Graduated: 2001
How Much I Borrowed: $100,000
What I Still Owe: $45,000
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Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past six years. You can reach them by email: asia@kinneyrecruiting.com.
Deal flow has clearly picked recently up for most US associates, counsels and partners in Hong Kong/China and Singapore. We are on the phone with a lot of these folks on a daily basis, many of whom we have known for years. Further, the head of our Asia team, Evan Jowers, and Kinney’s founder and president, Robert Kinney, frequently meet in person with leading US partners in Asia to assess their needs and keep on top of the inside scoop at as many firms as possible. The need for legal recruiting help in Asia from experienced recruiters appears to be live and well. In March, Evan and Robert were in Beijing at such meetings, in April, Evan was in Hong Kong, and for half of June Evan will be in Shanghai and Hong Kong. Thus its pretty easy for us to tell when there has been an across-the-market pick up in capital markets and corporate work.
On an average day in Asia when Evan and Robert visit firms, they typically have 5 to 9 meetings a day, mostly with US partners in the market. The reason they have these meetings is not simply because Kinney makes a lot of US attorney placements in Asia and that a particular firm may have openings; instead these are just visits with friends. After years of working together as business partners, the folks at Kinney are actually these peoples’ friends. The firms Kinney work closely with in Asia (which is just about every law firm – call us if you want to know the one firm in the world we will never place anyone with again, ever, and why) look forward to the visits, or at least act like they do. After seven years in the market, many of the client partners are former associate candidates. Also, these US partners see Kinney as a very good source of market information as well, because they know how deep their contacts are in the market and how frequently they are speaking to counterparts at peer firms.
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