Opportunities and risks law firms face in the lateral hiring markets.
This report, conducted in partnership with Decipher, provides a clear-eyed picture of the opportunities and risks law firm face in the lateral hiring space. The data collected diagnoses many of the primary problems firm face when hiring partners in the lateral markets. It also provides straightforward, implementable, steps to address those problems.
The traditional methods just aren’t working.Findings highlight how the allure of increased revenue and profitability has dulled firms’ senses to the immense risks inherent in the lateral hiring process and finds that the cost of acquiring lateral partners is incredibly high as are the failure rates – close to 50%! Beyond these financial considerations, firms face significant risks from issues related to malpractice, workplace harassment, and conflicts.
Highlights from the report include:
- Lateral Hiring Market: ALM Intelligence estimates that between 2014 and 2018, the total book of business moving between Am Law 200 firms due to lateral movement was $17.1 billion.
- Nearly Every Firm Hires Laterally: 97% of Am Law 200 firms made a lateral partner hire in the past five years. Slightly more than half averaged at least one lateral every two months over that period, and one-quarter averaged at least one lateral per month.
- Low Rate of Retention: 40% to 50% of lateral hires do not last 5 years at their new firm.
- No Promise of Book of Business: 62% of lateral partners underperform in delivering their stated book of business.
- Inconsistent Due Diligence: The scope of what constitutes due diligence varies widely from firm to firm and candidate to candidate.
- Use of Human Intelligence: Confidential third-party source interviews can shed light on a candidate’s personality, potential cultural fit, and business development skills, and can