Choosing a Recruiter for Your Lateral Partner Search

BCG does quite a bit of work with partner candidates. The market continues to be strong for lateral partners nationwide.

Partner searches are different from associate searches, and it is important to find a recruiter who understands your objectives. I recently wrote an article on Choosing a Recruiter for Your Lateral Partner Search, highlighting important qualifications in a recruiter on partner searches. If you have a talented recruiter on your side, then your search will be much more pleasant and (hopefully) successful.

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Analysis of Law Firm Failures - Early Warning Signs

There has been a great amount of discussion lately about the implosions of Heller and Thelen, and the effect that the economy had on these firm failures. As many firms are courting lateral partners (it’s a brisk lateral partner market!), these partners are analyzing the stability of potential firms.

A new study from Hildebrandt International should provide an interesting base for such an analysis. In a recently-released white paper entitled The Anatomy of Law Firm Failures, Hildebrandt discusses a study of firm failures between 1998 and 2004. Hildebrandt concludes that “failed firms typically exhibit one or more major fundamental flaws, and the flaws usually fall into three primary categories:

Below average financial performance - often including excessive financial leverage, significant deferred obligations, low productivity, and poor realization;
Internal dynamics - primarily involving leadership issues, partners with incompatible goals, differences over compensation philosophy, and lack of succession planning; and
External dynamics - primarily involving competitive pressures related to the firm’s historical client base, access to new clients and desirable work, and inability to recruit key talent.”

Hildebrandt states that certain triggering events brought these flaws to light.

“Four types of triggering events were the most common: (i) overexpansion that weakened the firm over an extended period of time, (ii) the unexpected rapid or gradual defection of significant partners to one or more other firms, (iii) a breakdown in merger efforts for a firm that was already in serious financial distress and barely surviving, or (iv) the impending expiration/renewal of the firm’s primary office lease.”

Lateral partners, especially those contemplating their first lateral move, should consider these fundamental flaws and triggering events when formulating their diligence questions for a potential suitor!

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Math for Lateral Partners

The lateral partner market is a flurry of activity right now. We are currently working with a number of lateral partner candidates. The most frequent concern among partners conducting a search? How to value their book of business in strange economic times. My colleague, Dan Binstock, just wrote a fabulous article on this very issue. In We Were Told You’d Bring Billables, Dan addresses the most effective way to value your book so that you are representing yourself in an honest, accurate and marketable way.

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Who Wants Partnership Anyway?

A law firm strategy consultant at Altman Weil talks about a new generation of lawyers who are largely uninterested in partnership. At the same time that equity partnership has become less attainable at many firms, it is also considered undesirable by many associates. And attaining the brass ring is no longer a guarantee that you getto keep it. Partners need to continue to contribute to their firm’s bottom line if they want to remain in the partnership.

Ironically, though, it is partners with portable billings who have the greatest amount of mobility. This is particularly true in our current economy where demand for lateral associates is very low at the moment. (See Lateral Market is Officially Flooded).

But things can change quickly. My own personal prediction is that the second half of 2009 will be booming with litigation and demand for litigation associates.

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High Demand Should Motivate Partners To Move Now!

Even in these tough economic times, there is increased demand by law firms for partners with business. Why would any partner decide to move to another law firm in such a tumultuous economic market?

First, firms not equipped to withstand this extreme economic downturn will not be able to stabilize and survive. Therefore, it is imperative that partners assess whether or not their current firm is financially sound and will provide the best environment for their clients during the next few years of recovery and beyond. If a partner’s current firm is rapidly declining and is experiencing a high level of attrition and movement at the associate and partner levels, it could be exactly the right time to make a move.

Second, firms are expanding and diversifying their practices to better service their regional, national and international clients, so it is an excellent time for partners to seek out new opportunities at firms that are well positioned for continued growth and expansion and which would provide additional cross selling capabilities, and services to their clients.

Finally, although some firms are downsizing and closing their doors, other firms are expanding, merging and have recently launched new offices. Additionally, many firms are launching new and innovative niche practice areas. Thus, if you are a partner with niche expertise in areas that are or will likely be in high demand during this tough economic cycle, you could take advantage of these new opportunities and actually lateral to a more prestigious firm with a better platform.

Now is the time for partners to evaluate their current position. There are opportunities in every market, whether the economy is good or bad. Partners who can seize upon new opportunities in this down market will have better control of their careers and be in a better position to respond to their clients’ needs.

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Do I Really Even Need a Business Plan?

Yesterday, my colleague Jamie Bailey, encouraged partners contemplating a move to draft a business plan. The most common response I get when I suggest the same is–”Do I really need a business plan?” The answer is an unequivocal yes!

Some things to keep in mind:

1. A business plan can be even more important than a CV/Resume. No one ever puts up a fight when asked to draft a resume. We all assume it’s a mandatory part of the job search process. However, when I utter the words “business plan,” it’s quite a different story. Ironically, I can think of more than a handful of firms where a copy of a partner’s law firm bio will suffice in lieu of a formal resume. I can’t think of a single firm that would turn down the opportunity to review a partner’s business plan. For an established partner with significant portable business, a business plan lends immediate credibility to the nature of the portable business. For an up-and-coming partner with little to no business, a business plan is the best way to sell a prospective employer on your potential. In either case, a business plan can be even more important than having a detailed resume.
2. A business plan does not give away all your secrets. One of the most common objections I get to the idea of drafting a business plan is–”I don’t want to share confidential information that the firm can then use to its advantage.” But keep in mind–a business plan does not have to give away all of your secrets. With careful drafting and a well-reasoned approach as to what will be included in the business plan, you can definitely convey the necessary facts without spilling your secrets.
3. What does a business plan say about you? It tells the prospective firm a number of essential facts: (1) that you understand the economical/business aspects of practicing law; (2) that if the firm hires you, you are going there to be a productive, contributing member of the firm; (3) that you have given thought to your practice and how it fits in with the firm’s existing practice; (4) that you are confident enough in your skills and abilities to give them a snapshot of what you have to offer; and (5) that you care about where you end up.

Once candidates get over the initial reluctance, they tend to find the exercise of drafting a business plan incredibly helpful. Often times, drafting a business plan goes a long way towards solidfying what you are looking for in your job search and it helps you prepare to advocate for yourself during the interview phase. There really isn’t a downside and, in the end, is really is quite painless!

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