Table of Contents

  • About The Authors
  • Methodology
  • Introduction
  • Status Quo: Big Hires, Big Opportunities
  • Risk, Reward, and Failure
  • Improving Lateral Hire Success Rates
  • Conclusion
  • About Decipher
  • About ALM Intelligence

Risky Business: Rethinking Lateral Hiring

February 2019 | $0

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

Methodology

The data for the quantitative portions of this report came from a survey conducted by Decipher and ALM Intelligence as well as data from ALM Intelligence’s Legal Compass, which contains information on lateral hiring, law firm financial performance and geographic expansion since 1978.

The ALM Intelligence – Decipher Lateral Partner Hiring Survey gathered data from over a quarter of the Am Law 200. A broad range of firms were represented in terms of size, profitability, and lateral hiring activity (see Figure 1).

Over 50 one-on-one interviews were held with law firm leaders or other thought leaders with experience in lateral hiring. Interviews were held with over 40 Am Law 200 law firms representing a broad range of global, national, and regional firms. Interviewees typically held leadership positions within the firm holding titles such as managing partner, head of talent or lateral hiring manager. Topics discussed included, but were not limited to, lateral hiring strategies, due diligence, risk mitigation, and lateral partner integration.

Access the Study Findings

Complete this form to download “Risky Business: Rethinking Lateral Hiring – 2019 Edition”

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