Five Keys to a Successful Lateral Hiring Strategy

Many law firms’ strategies to increase revenues and strengthen practice areas are dependent upon a program of laterals.  For some firms, the strategy is incredibly successful in its ability to provide work for under-performing lawyers and rapidly increase capability in targeted practice areas.  Unfortunately, for a large number of law firms, the lateral hiring strategy never quite fulfills its strategic objectives.  But the problem is frequently with the execution, not the strategy.  The following is the outline of a lateral hiring strategy that works, especially for firms that are not already market leaders.

1. Set the bar high enough.  It makes no sense to hire a lateral who will be an under-performer coming in the door.  Calculate your firm’s average revenues per equity partner (divided gross revenues by the number of equity partners).  Absent some unique circumstance, laterals must have portable billings of at least your firm’s average revenue per partner.  Don’t allow yourself to be convinced that a partner with a career history of having billings of $500,000 is miraculously going to become a multimillion dollar performer simply by joining your firm.
2. Identify top candidates.  You don’t need a headhunter to find potential lateral candidates.  Legal communities, even in larger cities, are surprisingly small.  Use your partners to create a target list – collectively they know who the viable candidates are in your city.
3. Do your research.  Use some paralegal hours to do a deep dive into the candidates’ practices, client base and relationships within their current firm.  It’s amazing what you can learn from court records and a Google search (don’t just look at the first page of the Google results – the most interesting stuff is on the last couple of pages).  You’re not just looking for dirt – you want to deeply understand what makes your candidate tick before you make contact.
4. Make direct contact.  If you were the candidate, would you be more likely to favorably respond to an invitation to lunch from the managing partner or practice chair of a competing firm, or to a cold call from a headhunter?  Besides, you’ll save paying a big placement fee to a recruiter.  If direct contact seems somehow unseemly, consider engaging a recruiter on an hourly basis.  There are some good recruiting firms that will happily act as your surrogate, just to make the initial contact.
5. Scratch their itch.  The best lateral candidates won’t be moving for short-term money.  They will seek to solve a problem: a conflict within the firm, a broader geographic platform, stronger marketing support, or early partnership consideration for their star associate.  Figure out early what their issue is and figure out a way to solve it.