“The candidate wants our position.” Historically, it was thought that a lateral partner would move to another firm because they were disgruntled. This basic premise is false. It is a lot of work to move one’s practice and simple unhappiness is typically not a big enough reason to make a move. Rather, a lateral partner moves their practice to another firm because of the platform; the opportunity to increase one’s clients, expand services to current clients, and increased income.
With a common misnomer of “a law firm, is a law firm, is a law firm” how does a lateral even evaluate a “better fit” or better platform? Many times an interview process consists of both sides putting on shiny faces and discussing or exchanging surface information. On the surface, firms can look similar. By digging a little deeper it is easy to see that not all firms are alike. And, the fact is, some firms are a better fit for certain people than others.
Senior lawyers whose compensation is based on a combination of individual performance and firm performance, whose practices are portable and whose client relationships are strong, need to know a lot more about a prospective opportunity. And it is okay to ask!
After all, the firm where the lateral partner candidate wants to be is one that values lawyers who make important decisions based upon gathered information at the appropriate time. The firm where the candidate does not want to be is one that does not want to provide the information.
The lateral partner candidate does not need to produce a formal questionnaire to get answers to questions. Rather, the lateral partner wants to pay attention to all of the conversations, as to pick up bits and pieces of information along the way.
Some information is time sensitive and the best time to exchange that information is when the firm serves up their Lateral Partner Questionnaire; in a sense an “I’ll show you mine if you show me yours” exchange. In this way, the exchange of sensitive information can seem less awkward and continues the good faith effort and interest on both sides to continue conversation.
Here is the Lateral Partner Checklist; the questions that will ensure the collection of the relevant information a lateral partner will need to evaluate a prospective firm/opportunity:
Firm Governance/Leadership Structure
- What are the committees? How are people elected to the committees and are there term limits? Is the firm organized by practice groups or locations? What and where are the profit centers? What is the firm management structure (in addition to lawyer managers?)
- Ask for information on the number of partners, associates and support staff. How are people staffed on matters? What is the compensation structure including billable hour expectations for associates and staff? What is the attrition rate/longevity of partners, associates, staff?
- What is the firm’s mission? Core Values? Differentiators/uniques?
Growth Strategy/Lateral Hiring
- What is the success rate in hiring laterals? How many has the firm hired? What is the attrition? Why?
- What is the strategic plan over the next 1, 3, 10 years?
- What is the potential/interest in merging?
- What practice areas are targeted for growth?
- What practices are of interest to add or contract within the firm?
Financial Information
- What are the firm’s liabilities? (including debt and leases)
- What is the make-up of the firm’s annual billings – what clients make up what % of the firm’s revenue/billings annually? If there is a short list of clients that make up the majority of the firm’s billings, you may want to ask more questions.
- What are the firm’s billing rates for all lawyers, associates and partners? Review the billing rate differences for practice groups and locations.
- Alternative fee schedules. Is the firm using alternative billings for clients? In what practice groups? With what clients? Do individual lawyers have flexibility to make these decisions in their own practices?
- The following data should be collected for the current year and the last two years:
- Profit per partner
- Revenue per partner
- Average billable hours – partners
- Average billable hours – associates
- Ask for copies of financial statements for the last three years.
Partnership
- What is the partnership structure?
- What is the retirement policy? Is there a mandatory policy? Is there a payout?
- What are the business development expectations? How is business origination allocated (by client or by matter?)
- Is there credit given to administrative duties? Pro bono activities? Marketing activities?
- What is the compensation system? Is it open or closed? How are decisions made?
- What is the timing of payouts to partners (when draws are made, bonuses distributed)?
- Is there and what is the capital contribution? What is the condition of repayment?
- How is succession planning thought of/practiced?
- Ask for a copy of the partnership agreement.
Practice Growth: Marketing/Business Development
- What is the marketing support available? Are their marketing budgets per partner? Is their internal business development support available? Are there examples of marketing/business development success for partners?
- Learn about cross-selling philosophies, practices, success stories.
- Professional Development – What coaching/learning/training opportunities are available/supported?
- What is the pro bono philosophy?
- Community involvement philosophy?
Timing is everything. It is easy to scare off or offend an attractive prospect by coming on too strong too fast. Use your judgment in soliciting information. Prepare for meetings and ask good questions along the way. Everyone’s time is valuable so use each visit, each conversation wisely. With each interaction, you want to come away with more tangible information that you can use to evaluate the opportunity and ultimately make a good career decision.