Will the latest recruitment trends help or hinder your lateral move?
A second year of research from Motive Legal Consulting shows that firms are losing about a third of their lateral hire partners within five years.
But while the research may point to continuing problems with retention strategies in the legal profession, they also hint at broader changes in the recruitment landscape. But what are these changes? And what do they mean to potential movers, such as you?
1. Taking on teams
This year’s research includes an interesting new angle: the hiring of multi-partner teams. According to Motive’s managing director Mark Brandon, this is now the preference of many firms when it comes to lateral partner hiring.
And it makes sense. Team hires may come about through acquisition – a popular pastime among law firms in these days of market consolidation. But even without merger, the team hire is a popular way to quickly gain critical mass and win new clients in a particular practice area.
Statistics from Motive’s research also suggest that teams of lawyers are easier to retain, at least in the short term. For example, 10% of partners hired as part of a team in 2010 had left by 2012, compared to 13.5% in the general sample.
However, there are dangers with the team approach. The most obvious is a cultural mismatch. With an individual, cultural differences might be just about manageable. But a whole team that has a particular way of working that doesn’t accord with the rest of your firm? That’s a legal horror flick in the making.
It may be no coincidence, for instance, that Motive’s research showed that after two years team-hire partners are slightly more likely to leave than other partners. The reality of the team hire may often not live up to the high expectations.
2. It’s all about the clients
Related to the team hire is the increased desire to recruit partners with benefits – that is, partners with clients in tow. Team hires may be more likely to bring clients with them, but individuals can still wield considerable power if they have an assured client following.
In recent years of economic uncertainty, legal recruiters have reported increasing numbers of firms expressing only an interest in recruiting partners who have a client following. Such a following can ensure that a lateral hire hits the ground running, which can at least offset or completely cover the considerable costs of recruitment.
There are, however, dangers here too, most notably a failure to clarify exactly what is meant by a client following – which can lead to early disappointment and a ‘failed’ hire.
Another problem revealed by Motive’s research is that many lateral hire partners will leave within five years. If they brought clients with them, then firms have to assume that they’ll also leave with them.
That is unless firms can institutionalise the clients – making them belong to the firm rather than the lawyer. This continues to be the aim of many firms today. If successful, though, those firms also have to accept that hiring partners with a built-in client base might not always be an option.
And what is the meaning of partnership, if future partners cannot ‘own’ their clients?
3. The alternative to partnership
The majority of firms still recruit within the confines of the traditional partnership model. This means considerable time and money is spent attracting partners who must then stick around if they are to offset the costs of their recruitment and integration.
But such a strategy may well be unsustainable.
For instance, the Motive research found that of the 2007 lateral hire partners polled, more than 50% have now left their firms. This may not be entirely surprising. With the impact of the credit crunch, many of the recruits for that year may have found themselves out of a job. But of those hired in the far more careful recruitment landscape of 2008, 37% have still left.
The fact is that just as law firms are lateral hiring a-plenty, so are partners wanting to move on to enjoy these burgeoning levels of opportunity.
In addition, where firms can’t offer job flexibility at partnership level, lawyers are choosing to ditch any ambition for partnership altogether.
For law firms this presents two considerations:
- The long-term viability of the traditional partnership model. Does it really fit with a modern view of a successful career?
- The alternatives. Some firms have introduced new roles as an alternative to partnership – for example, counsel. But if they are to continue to attract and keep future talent, this trend is only the beginning of what is needed, which is a radical overhaul of the traditional partnership model. Alternative business structures will likely lead on this.
Retention in a changing world
Conversations with legal HR teams confirm that talent retention strategies are a key priority for the year ahead. But law firms are unlikely to resolve their retention issues until they face the fundamental and long-term changes happening in the career landscape.
Short-term recruitment objectives (we need new clients) will at best only produce short-term results.
In the long term, it is the firms that are truly prepared to modernise – even at the expense of the partnership model – that will be most successful at maximising the potential of future talent, for however long it sticks around. CP