LMA Strategies - March/April 2013 - (Page 9)
The War for Lateral Attorney Talent
Within Law Firms
By Raffaele V. Murdocca
T
hroughout the last several years, many law firms were
seeing a decrease in revenue and profits because there
was less deal work, clients were keeping more work inhouse, clients refused to pay for first- and second-year associate
work, and clients were successful at preventing significant annual
rate increases or worked out alternative billing arrangements. As a
result of this shift in legal services, law firms were looking at other
ways to grow revenue. One way to grow revenue and profits
was through the acquisition of lateral partner talent.
The industry averages about 2,400 lateral partner moves a year,
with close to 2,700 lateral moves in 2012. In the “2012 Am Law
Study on Strategic Planning at Law Firms,” respondents were
asked what the firm’s top business strategies were for this year. The
number one response was “growing the firm’s revenue” and a very
close second was “talent acquisition and retention.” If you talk
with law firm leaders, they would say these two go hand-in-hand.
As a result of a shift in legal services,
law firms were looking at other ways
to grow revenue. One way to grow
revenue and profits was through the
acquisition of lateral partner talent.
An ALM-LexisNexis survey cited in the American Lawyer found
that when firm leaders were polled, 70 percent are expecting to
hire more lateral partners over the next five years and 96 percent
said pursuing lateral acquisitions is part of their growth strategy over
the next two years. As one can easily surmise, growth by lateral
partner acquisitions is here to stay for the short and long term.
So what about lateral associates? During the recession, firms cut
their summer associate classes significantly. The National Association of Law Professionals (NALP) reports that the summer
associate classes are much smaller than they were at pre-recession
levels and smaller classes are the new norm. As a result, there
will be fewer first-year associates in law firms. This is due to the
fact that summer programs are expensive when firms would like
to cut costs, and clients do not want to pay to train first- and
second-year associates. This downturn in summer associate hiring
and the reduction in permanent offers started in 2009, along with
many associate layoffs. As a result, there is a lull of associate talent
with three to six years of experience. Therefore, many firms are
now looking for lateral associate talent, for both on-track and
off-track partnership positions, to fill the void.
Now that we’ve established that lateral partner and associate talent is needed, the question is how do law firms find the talent? The
best way to find lateral talent is through an internal referral source.
Partners would like to grow their firm with strategic partner selections and, therefore, will reach out to peers at other firms. The
managing partner or hiring partner at the acquiring firm will also
specifically target certain lateral partner candidates through referrals
and then reach out to potential partner candidates.
On the associate front, many firms give bonuses to their associates
for referring other associates to the firm. Associates will also apply
on their own when they see postings on a law firm website or
ads placed through local bar associations, local legal newspapers
or social media sites. Lateral partners are less likely to apply on
their own, but may reach out to former law school classmates
or peers at competing firms. Firms also acquire talent through a
large merger or acquisition, which happened often in 2012 and
will likely continue in 2013. Lastly, law firms use search firm
agencies to assist with their growth initiatives. Throughout the
last several years, most search firm hiring came at the partnerlevel or with contract attorneys. Considering the lateral associate
market is heating back up, expect law firms to engage search
firms once again for associate searches.
Once you have found the talent, how do you attract them to your
firm? This answer will vary widely depending on the individual,
their experience level and the size of the firm. For partners, they
tend to move for firm cultural/collegiality; firm reputation; practice area expertise and support; geographic locations; cross-selling
opportunities; and compensation and benefits. Of course, every
partner would like a bump in pay, but they are more concerned
about the fit and the platform. Partners are looking to service
their existing client base and develop new business, which in turn
will generate more revenue and pay.
For associates, they are looking for firms where they have a good
opportunity to grow and learn. They would like to obtain handson experience at an early age so they can become an expert in a
desired field. They are interested in good internal training programs that are put on by the partners or outside consultants to
assist with their development. They are searching for firms with
mentor programs and/or partners who will take a vested interest
in their careers. Some are looking for firms that offer more worklife balance. These associates are willing to trade top pay to spend
more time with family or on outside interests.
Meanwhile, other associates are looking for firms where they can
actually still make equity partner. These associates are looking
for assistance with business development training. Associates are
savvy enough to know they need to develop a book of business either by cultivating new work from existing firm clients or
Strategies: The Journal of Legal Marketing, March/April 2013, V15.N02 | 9
Table of Contents for the Digital Edition of LMA Strategies - March/April 2013
LMA Strategies - March/April 2013
Contents
President’s Podium
About This Issue
Competing on Intelligence
Online Competition Is Brutal: Enhance Your Results with SEO
The War for Lateral Attorney Talent Within Law Firms
First-place Media Pitching
Starting on a Shoestring: How to Build a Robust Social Media Program
Law Firm Websites for the iPad Generation
Friendly Competition Sets One AmLaw200 Firm Apart
Movies, Marketing and Professional Development
Ask the Authorities
Dicta: Marketers on the Move
From the Desk of the Executive Director
LMA Strategies - March/April 2013
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https://www.nxtbook.com/nxtbooks/smithbucklin/lma_strategies_20110506
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