A 'To-Do List' For Law Firm Partners Considering A Lateral Move In 2017

Ed. note: This is the latest installment in a series of posts from Lateral Link’s team of expert contributors. Gloria Sandrino is a Principal based in the Los Angeles office where she focuses mainly on partner and group placements. Gloria leverages her vast network of partner and executive contacts to help partner and group candidates make lateral moves. She also assists law firms with their partner hiring needs. Gloria earned her J.D. from Harvard Law School and went on to practice Corporate M&A for 10 years in Manhattan and Miami. Through her vast legal experience, Gloria has extensive knowledge of the inner-workings of the legal market.

For those of you considering a lateral move in 2017, here is your “to-do list” to put you in position to make the best possible move:

A. Carefully Assess Your “Sustainable” Portable Book of Business: It is important for a partner to assess his/her sustainable portable book of business. The key words are “sustainable” and “portable.” With regards to sustainability, carefully look at the platform that will benefit your clients. While some law firm platforms may seem attractive, they might not be the types of platforms that will support your client base. The portability of your business centers on your client relationships. The stronger the relationship, the easier it will be for you to port your business. Here are some suggestions for the assessment of your book of business:

1. Client Names and Business Generated: Firms are looking for historical metrics with respect to the business generated and collected from your significant clients. Three years of historical metrics are preferred.
2. Billing Rates: Carefully assess your billing rates for each of your clients. Take note of any blended rates or alternative fee agreements.
3. Realization Rate: Firms are very particular with regards to a partner’s realization rates. In the recent financial reports of the Am Law firms discussing the firms’ performance in 2016, many firm chairpersons discussed the importance of the realization rate. Thus, it is crucial for partners considering a lateral move to carefully look at this metric. If your realization rate for a particular client is lower than your average realization rate, make sure that you note the reason for the disparity.  In addition, if your firm’s collection practices are impacting your realization rate, it is important to note that as well.

B. One-Page Business Plan: Many of the Am Law firms are looking for a “one-page business plan” in order to determine if the prospective lateral partner is a good fit. The one-page business plan differs from the LPQ and the standard business plan in that it combines the most vital parts of each document into a one-page summary, offering a snapshot of the prospective lateral partner’s potential. The one-page business plan does not replace either document, but it saves time in the early stages of lateral inquires for all parties. What should a one-page business plan consist of?

1. The Narrative of Your Professional Experience: The first part is telling your “professional story.” For example, if you are government lawyer, address why have you decided to (re)enter the private sector at this time?  If you are a law firm partner with fluctuating historical metrics, explain in your own words what has caused the fluctuations. It is your professional story; control the narrative.
2. Metrics/Clients or Contacts: It is vital to focus on “real” contacts. The relationships with these contacts are crucial for the law firms. Law firm contacts are important because partners give work that is conflicted out of their firm to friends who will not steal their clients. Important metrics to list include: billings/collections; originations; realization rate; billing rate; and billable hours. You should list for the last three years if possible.
3. “Road-map in the Firm”: Part three should be a paragraph about your plans for client development and/or business generation at the new firm (with the new platform). In essence, it is taking some of the “key” contacts or clients listed above and describing an action plan.  You know your practice better than anyone else in the beginning of a lateral move. Describing the best way for a firm to integrate you and your practice into the firm is very important to starting a dialogue so that you can make an informed decision.

C. Lateral Partner Integration: The key to making a successful lateral move for partners is the firm’s lateral partner integration system. There is a huge difference from one firm to another in the system (if any) they utilize to integrate lateral partners. Understanding the various types of lateral partner integration is essential for any partner considering a lateral move.  This is why working with a legal recruiter that is knowledgeable about firms’ lateral integration systems is essential.

D. Selection of the Right Legal Recruiter: Selecting a good legal recruiter can be difficult in this saturated market, but it is also imperative. A bad recruiter will lead you astray for a quick buck, but a good and knowledgeable recruiter knows that the industry is built on relationships and trust. What should you look for in your recruiter?

1. Access to Law Firm Intelligence: Law firm intelligence is not freely given and good recruiters spend years building and fostering relationships with firms to get access to intelligence that will help their clients. This information can make or break a lateral move; it can help you find the best platform for your business, can inform you of potential leadership opportunities, and more.
2. Guidance Through the Process: The process for a lateral partner move from conception to execution is long, often taking over six months. Your recruiter should be a part of the entire process, not just the submission. There are many avenues for errors in partner moves from client conflicts to lateral integration to salary negotiations; deals can fall apart quickly. Your recruiter should be with you throughout the entire process. If they disappear after the submission, it’s time to find a new one.
3. Compensation and Integration: Perhaps the most tangible value a recruiter can add is in compensation negotiations. A good recruiter will have a breadth of knowledge of partner compensations from their past deals. This allows recruiters to benchmark your offer and leverage their intelligence to get you the best possible offer. Once an offer is accepted, your compensation package is only one part of your eventual take home. In the long run, proper integration will have a lasting impact on compensation — and it is an impact that is sustainable. Focusing on the compensation package alone is short-sighted; the key is integration because it will lead to the expansion of the lateral partner’s client-base. A good recruiter will use their insider knowledge to help you plan your integration to grow your business.

It always pays to keep the number of a good recruiter in your phonebook, and if you are thinking of making a lateral move, your first call should be to a reputable recruiter. If you are considering a lateral move or would like to discuss the market, I’d love to chat. You can reach me at [email protected].

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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.