What Does a Law Partner Lateral Move Look Like?
The lateral move of a law partner from one law firm platform to another tends to be more art than science. Here’s a framework for making this process effective and time-efficient.
Nobody wants to waste time, especially in an industry where your time is money. Many lawyers are peppered by prospect firms and recruiters; in some markets like New York, lawyers are inundated. What partners need is a simple system to make decisions quickly and minimize distractions.
Do not “candy coat” the lateral process in your thinking. Partners that engage law firms in discussions will experience a drain on their time and emotional capacity. Typically this process will take 3-12 months depending on several variables. And I have seen them go even three years. So if this not the “season” or time of your career to consider a lateral move, then communicate a professional “no” and get back to client development and billing.
A partner candidate will be best served by having the following information when approached by prospects and opportunities: 1) The right questions 2) Your wants 3) Your numbers.
Your goal is to determine if this opportunity is your time. There are numerous questions you can ask, but here are five to keep handy for when you are approached.
- Why should I leave? I am happy and content?
- Why would this law firm be a step up for me?
- How would it create synergy for my clients and practice?
- What is the compensation culture at this firm?
- How does management function and what is their philosophy and vision?
A knowledgeable representative or recruiter will know the answers to these questions and/or get your answers quickly. Be sure to take notes and confirm facts.
Streamline your decision-making process by knowing what you want. Know what you want in a different platform or what you would change about your current one. Ultimately, your want has to be big enough to cause you to move. If you do not know your want, you will waste your time and the prospective law firm’s time.
You will want to know the following information:
- Your historical (3-5 years back), current and anticipated Compensation
- Billing rate
- Realization rate
- Hours billed by your clients vs. other partner’s clients
- Client originations
- Portable book of business
Your “book” is what you originate in client business and what you can actually take with you to the right law firm platform. You have no reason to disclose this information unless it helps your decision-making process.
For the conversation to go to the next level, the recruiter or prospective firm will be looking for economic, cultural and maybe strategic fit. The quicker you can achieve understanding, the sooner you can get back to client development and billing. If your curiosity has been piqued in the initial conversation and you would like to have the next discussion by phone or face-to-face with a partner of the prospect firm, then you will begin a vetting process and initial due diligence.
When moving into this phase, be sure to identify and align with a partner of the prospective firm who will push for your candidacy and sees your potential contribution to the partnership. This partner tends to be the practice group chair, office managing partner or an executive committee member. When you enter due diligence, take ample time to get to know this individual and become friends.
The “due diligence dance” is the most timing-consuming part of the process. You can expect lots of meetings, a conflicts check, and the LPQ (Lateral Partner Questionnaire).
Partners will likely have three major meetings with the prospect firm. You will meet with the practice group leader, the office managing partner and the leaders of the firm such as the managing partner or an executive committee member. Expect also to meet with groups of partners from the local office and practice group. This is all about a “culture-fit” evaluation. Do I like them, and do they like me? Can I see myself practicing law and putting my capital in with this potential new team of lawyers? It’s important during this time to be asking questions, fact-checking and taking diligent notes.
Second, according to ABA Ethics Opinion 09-455, a conflicts check is required. It states, “Any disclosure of conflicts information should be no greater than reasonably necessary to accomplish the purpose of detecting and resolving conflicts and must not compromise the attorney-client privilege or otherwise prejudice a client or former client”. In other words, provide a list of clients and nothing else. The sooner the better in this process. Client conflicts tend to rule out opportunities for a lateral move more than anything else.
Finally, a critical part of this process is the LPQ – Lateral Partner Questionnaire. This form varies from 2 to 25 pages of questions. I see many partners get discouraged and lose steam when they start this. It is a necessary evil that will justify your compensation and build a case for your candidacy to the partners of the prospective firm. My advice is to find a quiet space, grab a strong caffeinated drink and knock this out in an afternoon.
After completing your LPQ and the three major meetings, expect an offer shortly unless, of course, the law firm has additional layers of approval.
Between the initial phase and due diligence, you will already have a general idea of what the compensation will be. Most partners do not even start the due diligence phase if they do not have comfort that they will be reasonably compensated.
Offers tend to be soft first and then hard after a partner vote. Meaning a key partner of the prospective firm will present the offer verbally for feedback and potential reiteration. From my experience, prospective firms put their best foot forward in an offer and generally I do not see large adjustments to them once given verbally.
Other matters to consider in the offer process are: the capital contribution requirement, are you starting as an equity or non-equity partner, any funded or unfunded retirement benefit, will you be K-1 or W-2, etc.
If you survived the process and ended up receiving an offer, congrats! You now need to respond quickly and confidently. Prospective firms do not wait and will want an answer within one week and not longer than two weeks; there are always exceptions to this rule.
In the jungle of the law firm ecosystem, partner lateral moves are not for the faint at heart. Many times an effective move involves numerous meetings, several months, more than one law firm being considered and plenty of emotions. You will be better prepared if you understand how the process works and can anticipate the next steps.
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To learn more about lateral moves, Amazon now carries Chris Batz’s book: Lateral Moves: A Guide for Partners and Law Firms.
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