As the last quarter of 2014 nears its end, the ingredients for the lateral hiring stew are being added. Firm and individual lawyer performance on the year, bonus expectations and realization, internal law firm management and politics-all will be factors in determining individual lawyer contentment. The same factors, viewed from management’s perspective, will drive an examination about the firm’s “keepers” for 2015 and its future. These respective points of view will flavor the free-agent recipe. Content lawyers seldom leave-dissatisfied lawyers are always potential departures. And money talks.
Two recent articles suggest that 2015 could be a year in which law firms see an uptick in lateral movement. Debra Cassens Weiss’ Has the BigLaw Recovery Arrived? notes the widening gulf between the top 21 revenue producing law firms and the remaining AmLaw 200. Her view that the gap gives these top firms an advantage in the lateral market is hard to dispute.
Michael Allen’s The State of the Legal Job Market details expected lateral movement after the New Year and predicts, after years of mostly gradual movement, a much more active first quarter of 2015. Mr. Allen’s study notes that some firms historically have been more active than others, but even if all the top 21 firms are not seeking lateral talent in the marketplace, he predicts a lot of movement in early 2015.
Regardless of a firm’s ranking in law firm revenue per lawyer metric, aggressive activity by the firms most able to pursue laterals will stimulate lateral hiring activity by the remaining firms in the AmLaw 200 and beyond. Faced with these predictions, and the dynamic that law firms are at their most active or vulnerable during the three months either side of New Year’s Day, law firm management should prepare for the upcoming lateral rush in at least five key ways:
Update or Develop a Growth Plan That Ties to Your Strategic Plan. Growth for growth’s sake is a losing proposition. Not many law firm leaders will admit to such a strategy, but if proposed lateral hiring is not in furtherance of an imperative in a firm’s strategic plan, it should not be pursued. A reactionary pursuit of lateral hires because a competitor might otherwise hire the target is mindless growth to be avoided. If your firm intends to pursue acquisitions, only target lawyers that further your strategic plan objectives.
Assess Your Vulnerabilities. Lateral movement is a two-way street. Just as you are identifying targets to hire, some of your most valuable attorneys may be checking out opportunities at other firms. Don’t be blind to what goes on around you. Analyze which of your lawyers may leave and then work on a retention strategy. Keep your key assets as you seek valuable lateral additions.
Work on Deferred Maintenance. If your firm is in danger of departures, it is probably because unresolved issues at the firm make some of your producers unhappy. Likewise, a sloppy firm will not impress lateral candidates. Get ahead of the game by curing deferred maintenance. It may help save someone nearly headed out the door and improve your ability to impress lateral candidates.
Build Firm Momentum Independent of Lateral Additions. It is critical to end every year on a positive note. Yet we all know that not all years end up with record profits and bonuses. While positive spin sometimes can be tough to generate, leadership must attempt to excite the firm’s lawyers about the future. They will help excite the outsiders looking in.
Be Disciplined. You can have a growth plan, a strategic plan, a retention plan and a profitability plan. But if discipline is lacking in implementation of any of the plans because leadership has the bug to hire a new lateral to create some buzz, the firm suffers. It is imperative that discipline guide leadership in the upcoming free-agent season.
Baseball has its seasonal “hot-stove league” when players get traded and teams seek improvement through building a new roster. The functional equivalent for law firms is getting ready to start. Is your law firm ready?