And yet, firms spend an incredible amount on lateral hiring, from the time investment of key partners, firm leaders and professional staff, to the money — lots of money. ALM Intelligence estimates the all-in cost of hiring a lateral partner in today’s market averages $2.3 million, with the most coveted partners costing well over $5 million when it’s all said and done.
Law firms who play the game of lateral hiring (which is just about all of them), stand to gain quite a lot when it comes to strategic growth. Most often, the decision to hire a lateral senior associate or partner is driven by the firm’s desire and expectation to develop a new area of expertise, gain access to new clients and/or grow in strategic markets.
With so much to gain — and a less than stellar industry success rate — what can law firm leaders do to increase the likelihood and eventual realization of these benefits when hiring and onboarding laterals?
“It is vital that the firm has systems in place to make internal connections and build relationships inside and outside of your practice,” says Ellisen Shelton Turner, a lateral hire with Kirkland & Ellis LLP. He says that lateraling to a firm of any significant size can be daunting, especially for one the size of Kirkland.
But there are things firms. In fact, the report indicates four key factors for a lateral’s success or failure:
- The hire’s longevity at the firm
- The hire’s integration into the firm’s culture
- The amount of realized revenue that the lateral assists in bringing into the firm
- The lateral’s impact on the firm’s profitability
We explore these leading and lagging indicators of success with a particular focus on how business development best practices play a role in each factor.
GIVING LATERALS A BOOST IN BUSINESS DEVELOPMENT BEST PRACTICES
Most law firms have embraced the notion that there is strategic value in providing associates with fundamental skill building in business development topics such as personal branding and networking. And plenty of law firms invest in high-potential partners by offering them tailored, individual business development coaching.
Law firms who play the game of lateral hiring (which is just about all of them), stand to gain quite a lot when it comes to strategic growth.
But what about the growing group of lateral attorneys who join firms as senior associates or partners? Consider that their training and support needs for business development are slightly unique. They have an opportunity to marry where they have been and what they have been up to with where they are now and the new opportunities available to them and their clients. We believe there are three distinct business development areas around which laterals should prioritize their time and energy when joining a new firm:
- Targeting and defining their go-to status and brand
- Creating headline messaging and refined value proposition
- Building authentic relationships internally and externally
It’s an investment that can pay off, according to Tara Gorman, Partner at Loeb & Loeb. “As a recent lateral, my new firm’s willingness to invest in the support to accelerate my exposure to the external market while also providing me the latitude to ramp up introductions and opportunities has been invaluable,” she says. “I was thrilled when my new firm provided me with a business development coach who valued not only my legal skills but my ability to make true connections with clients and potential clients and teach me concrete techniques to turn those skills into business.”
TARGETING AND DEFINING YOUR “GO-TO” STATUS AND BRAND
Your firm hired and courted laterals for a reason. You undoubtedly appreciated their personality and saw them as a good cultural fit. But they were also hired because they have something that firm leaders believe is additive to the current state — be it their current book of clients/business, their specialized area of expertise or some other potential that meets a strategic growth target of the firm’s.
Getting clear on that bigger vision and set of expectations is their starting point. How does your lateral’s yesterday translate into their tomorrow? Most laterals underperform in bringing over their stated books, because it’s not only about current clients; it’s also about their (in)ability to grow new relationships and clients under the new platform.
For laterals, it’s vitally important that they learn about their new firm, the partners and specialties, and understand how their legacy target markets can be amplified by what is now available to them. Furthermore, how can the lateral hire be an amplifier to others at the firm?
Most laterals underperform in bringing over their stated books, because it’s not only about current clients; it’s also about their (in)ability to grow new relationships and clients under the new platform.
This has been a vital component for Turner. “From the day I arrived, Kirkland’s leaders have been providing opportunities for me and my new colleagues across all of the firm’s practices to get to know each other. We quickly identified where my intellectual property strategy and litigation expertise could add value for existing firm clients and we began to set up client meetings accordingly.”
To help your laterals define their target markets and establish a go-to status, have your laterals ask themselves the following questions:
- “Who do I help?”
- “Who do I want to help?”
- “What are my competencies and values?”
- “What are the characteristics of my ideal clients in terms of things like business size, industry, geography, maturity, affiliation or situation?”
As they answer these questions, have them get clear on a handful of specific targeted markets/client types. With these as their guidepost, they can begin credentialing themselves. Internally, have your laterals educate your partners on how they can best help firm leadership and their clients. Paint a targeted picture so the partners don’t have to guess or misfire when introducing them. Externally, raise your new lateral hire’s profile in target market circles through relevant thought leadership and networking.
“I also learned about the many ways that the firm could support my business goals and my prior clients and contacts,” says Turner. “The firm’s dedicated business development group also meets with me regularly to help find and create new opportunities and synergies. As a result, within months, I already felt well-integrated into the firm’s IP practices and also cross-developed multiple matters with our private equity practice.”
Law firm leaders should work to clear the path and help new laterals gain access to practice areas and firm leaders who can collaboratively work with the lateral in defining new target markets, taking the best of what has been and bringing it into a new, and improved platform for the firm and its clients.
CREATING HEADLINE MESSAGING AND REFINED VALUE PROPOSITION
Once targets are defined, a lateral must have relevant headline messaging and be well-versed in communicating how they bring value to each type of stakeholder, including partners, existing clients, prospective clients and referral partners.
Essential to their new messaging is being clear on how the stakeholders identify, define and measure value. Have the laterals create key messages that align with what people care about and how their areas of specialty helps them solve problems or achieve goals.
There are three types of headline messages laterals should have at-the-ready when they start at their new firm. Encourage them to answer each of these:
- Quick Pitch: Answers “What do you do?” in a way that helps the receiver understand the types of problems you solve and for whom. Be sure to incorporate your new firm’s platform.
- What’s New Messaging: Answers “What’s new?” in a way that actually informs people of your news in a positive and memorable way.
- Stories and Proof Points: Addresses “Tell me more” in a way that paints a picture for people with examples and stories about how your work has helped people.
Joining a new firm creates myriad opportunities for your laterals to proactively reach out to contacts and share their news. They need to be thoughtful about how they will explain why they joined this firm — why will this move/platform be good for them and for their clients? What about this firm is aligned with their values and goals and those of their clients. Additionally, laterals should help the partners construct their “What’s new?” messages about the firm’s newest employee and what their expertise means for them and the firm’s clients.
Law firm leaders should also create a clear and compelling message that communicates what this addition of new talent means strategically for the firm, its partners and clients. This message should be communicated at all levels, and partners should be coached in communicating it outwardly to their clients as a proactive way to cross-sell the lateral’s expertise.
BUILDING AUTHENTIC RELATIONSHIPS
The ALM and Decipher report states that 74% of law firms have cited “cultural fit issues” for being a reason why laterals often don’t stay past five years. There’s nothing more critical to finding “fit” than for the lateral to quickly integrate and build authentic relationships with their new partners. Firm leaders can create conditions for positive integration by proactively and strategically matching people up, raising awareness across the firm and being intentional with checkpoints and follow-through.
A lateral’s ability to build authentic relationships will make the difference in their long-term success, whether these relationships are internal to the firm or external. One way to do this, is to have your laterals maintain a Top 20 list of strategic relationships consisting of partners, clients, prospects and existing or possible referral sources. This can help them stay true to their intentions and focused on their priorities. They can update this list every time you connect with someone so that you are aware of your activity and plan your outreaches accordingly.
Being in touch on purpose and with purpose, means reaching out, connecting with people in a way that they value and appreciate. With every interaction, take measures to get to know people as people — learn what motivates them, what worries them, what they care about and value and what their preferences are. Doing so puts you in a better place to stay connected on an emotional and personal level. This is the level where long-term relationships are created. And again, these best practices apply to key relationships inside the firm as well as outside; laterals should strive to treat their new partners as their clients.
GETTING IT RIGHT
We have found that law firms who are getting lateral hiring right focus on more than just onboarding a new partner. In fact, they place an acute focus on retention. While the concepts are similar, there are nuances between the two that impact the mindset and tactics used to generate success. Onboarding tends to focus on a finite period of time — typically the first 90-days — of joining a law firm. But retention focuses on the long-term picture with an eye toward growth. Such a long-term focus requires structure and discipline, and when done well, can move the needle.
A lateral’s ability to build authentic relationships will make the difference in their long-term success, whether these relationships are internal to the firm or external.
Eversheds Sutherland, a Global 15 law firm with over 3,000 attorneys, recently launched an upgraded lateral retention program. In an effort to improve lateral hiring and retention success, the firm took a hard look at its past approaches. With a critical eye and feedback collected from recent laterals, firm leaders from all administrative departments discussed and documented a 100-step lateral retention process.
The firm’s revamped (and amped up) process is managed by a single point of contact and is heavily focused on relationship building objectives and tactics intended to drive retention and revenue generation over time. For Eversheds Sutherland, the documentation of the retention process was critical, as was having a single point of contact — notably a business development professional — for ease and efficiency for the lateral.
“Business development planning and support is really critical to lateral retention, because ultimately, whether a lateral move is working — both for the lateral and for the firm — is going to be judged based on whether the work materializes,” says Eric Gruis, Senior Client Service Manager at Eversheds Sutherland. “Making the right connections early, both internally and with the firm’s and lateral’s client bases and having a strategy for how to leverage those connections, is essential.”
Their 100-step process runs the gamut from strategic introductions of colleagues and key client contacts to the minutia of onboarding a new hire, like IT setup, streamlining conflicts and ordering business cards. Additionally, the firm’s process pairs the lateral with a key partner who serves as a formal mentor and is someone who can cut through tape and aid in securing critical introductions and meetings. The program also includes regularly scheduled check-ins to proactively solicit feedback at critical milestones. The firm anticipates using this data to not only make improvements to the program in real-time, but to later mine their data for trends and insights about culture and how laterals can achieve even greater success at the firm.
HEADS OR TAILS?
Definitely heads. Finding, hiring and keeping good talent is one of the most important things law firm leaders will do. Flip the lateral failure trend to one of long-term success by giving new laterals the support, tools and skills needed to realize their full potential and feel fulfilled and accomplished in their new firms — your firm will reap the benefits.
“This process doesn’t happen overnight. Too often, firms expect magic to happen immediately and the reality is that it takes time, effort and support on all sides. I love being on a team that understands the importance of this support,” says Gorman.