Lateral hiring normally makes the top 5 list of priorities for law firms desiring growth. Some firms follow a process for lateral hiring and believe that preserving their culture and values are paramount in these transactions. Other firms believe that it is more important to break down entry barriers and seek laterals at an expedited pace.
Regardless of a firm’s approach to lateral hiring, a process that is too rigid will scuttle most deals and a process that is too loose normally ends in unmet expectations or worse. To temper these extremes, we help firms create a lateral hire analysis process that includes the creativity of art and the discipline of science.
The components of our process includes and analysis of the following factors:
A firm with a strong history of successful results is likely to maintain its dominance in a lateral transaction, but even these firms may benefit from the thinking of lateral hires. Firms that are most successful are those that are open to incorporating the ideas of lateral hires into their culture. Having just evaluated the firm from a buyer’s point of view, lateral hires are positioned to provide a firm with valuable external market insights. We ensure that these ideas are included in the process.
It is important to understand how a lateral transaction is supposed to be accretive to the firm. Some firms believe that laterals must contribute actual profit to the firm while others are satisfied with help covering fixed overhead. Laterals may also add value in terms of new client and or new practice area opportunities. We help our clients evaluate the time to cover direct costs, overhead and profit contribution. We develop a full financial analysis for our clients to ensure that the economic attributes of the proposed transaction are fully considered.
Firms that are actively seeking laterals are more inclined to engage the services of a recruiter while firms that are in a more passive mode are more likely to be patient and work through their existing network of contacts. Regardless of whether a firm is in an active or passive mode, it is essential that a clearly defined approach exists to engage lateral opportunities. Any ambivalence or ambiguity on the part of the firm will likely scare laterals off. We frequently consult firms regarding their lateral strategy and posture. We help our clients develop clear expectations for use with recruiters and direct lateral contacts.
It is essential to incorporate laterals into the mainstream of the firm as soon as possible. As with a new client procurement, consistent execution is what promotes long term success. A well-executed implementation plan is the best way to ensure success and to encourage previously recruited laterals to engage in the courting process for future laterals. Clients trust us to help them create an implementation plan and expect us to periodically follow up to ensure the implementation plan is working.
There is much to be learned from objectively reviewing the results of a lateral transaction. Skipping this process is a missed opportunity to improve future transactions and to make adjustments to the current situation if necessary. A predefined evaluation process and system for making adjustments will remove the emotion from these decisions and will have the added benefit of encouraging laterals be more candid about their expected future performance.
We understand that lateral hiring will never be without risk and the consequences of a bad deal may include economic loss, morale loss and damage to the firm’s reputation. We work very hard to create a process that considers these attributes helps increase our clients’ likelihood of successful transaction.
PerformLaw helps clients to become market aware and fiercely competitive. We are focused on planning, development, analysis & improvement of your firm. We specialize in these areas and are committed to providing outstanding critical services that will protect and grow your firm for years to come. Our expert staff have provided successful solutions to address the unique needs of each client we engage.