Michael Allen
Ed. note: This is the latest installment in a series of posts from Lateral Link’s team of expert contributors. Michael Allen is Managing Principal at Lateral Link, focusing exclusively on partner placements with Am Law 200 clients and placements for in-house attorneys.
Conflicts are increasingly limiting the playing field for lateral partners, especially for firms with multinational offices and large platforms and partners with diverse practices.
Although most firms prefer to perform conflict checks either in the middle or at the end of the lateral partner process, we encourage firms (and sometimes require them) to vet conflicts upfront to avoid commencing a dialogue that ultimately is a non-starter. We will package a partner anonymously and gut-check the decision makers to determine whether a conversation is feasible before investing everyone’s time.
In my experience, firm leadership is sometimes hesitant to mix-up their lateral hiring protocol, preferring to subscribe to the “if it’s not broken, don’t fix it” school of thought. However, there are several ways firms could fix the lateral partner hiring process by simply changing the sequence of events.
Although a conflicts check seems like an easy task of cross-referencing two lists, the firm’s clients and the lateral partner’s clients, the reality is much more nuanced. Not all conflicts are non-starters and, conversely, seemingly insignificant conflicts can derail deals. The bigger question is, who decides which conflicts matter, and when to approach clients for waivers?
Since most firms do not maintain institutional client relationships, but rather partners control the relationship, the relationship partner is typically the one who decides whether to impede or advance a lateral deal when a conflict presents itself with their client. That said, we oftentimes see incentives misaligned in this situation because a potential conflict with a prospective lateral partner candidate is not always a priority to clear by the relationship partner with the interested law firm.
The partner who controls the conflicting relationship may not be financially motivated to seek a conflict waiver for any increase in firm profits when the conflict represents a sizable portion of that partner’s book of business. Since incentives are not always aligned and information is not always symmetrical, the perceived decision makers don’t always control the lateral process.
Another hurdle we experience in the current system of conflicts checks lies in the chain of command for running conflict checks and determining deal breakers. The initial checks are usually to spot conflicts – run by a local managing partner or even recruiting manager. Even when firms identify potential conflicts, that typically doesn’t stop them from pursuing conversations. If a firm intends to approach a client for a waiver, the firm first wants to know if the partner is someone worth pursuing, and vice versa. We typically see firms go through rounds and rounds of interviews, compile lateral partner questionnaires and business plans, and present offers subject to conflict waivers, before they finally approach a client for a waiver or come to the conclusion that it’s not worth pursuing. Why upset a client relationship until you have a bird in hand?
My suggestion is simple. Firms should take the conflict process much more seriously upfront. Start the lateral partner hiring process with a conflict check and gut-check conflicts with the relationship partner. If you get past this step, then approach your client with a soft inquiry about whether they would have an issue with a conflict waiver if conversations were to materialize. Decide whether it’s worth potentially maneuvering through the process. That would get everyone on the same page and streamline the conversation without investing time in a lateral partner process that ultimately gets derailed.
We typically approach firms with a blinded profile omitting confidential and identifying information, which allows the firm to weigh in on the candidate and perform conflicts checks before the vetting process is initiated. This step requires preexisting relationships with key decision makers. We add value by leveraging our contacts and acting as agents for partners, thereby accelerating the lengthy lateral partner process while protecting sensitive information.
Initiating conflicts checks at the beginning of the lateral process saves both law firms and partners time and money. However, just identifying potential conflicts is not enough, partners and other decision makers should be roped into the process from the beginning if the firm is sufficiently interested in a partner candidate. When firms wait until after extending an offer to uncover conspicuous conflicts, the firm’s lateral hiring process loses credibility in the marketplace.
Lateral Link is one of the top-rated international legal recruiting firms. With over 14 offices world-wide, Lateral Link specializes in placing attorneys at the most prestigious law firms and companies in the world. Managed by former practicing attorneys from top law schools, Lateral Link has a tradition of hiring lawyers to execute the lateral leaps of practicing attorneys. Click ::here:: to find out more about us.