Reasons for Most Law Partner Lateral Moves
Why do Partners leave your law firm? After speaking with law partners across the United States, here’s my top 10 reasons for law partners lateral moves, or why attorney groups leave your law firm. Often I find law partners leave for more than one reason listed below. Their reasons are usually well thought out. Their moves are calculated, and they are motivated. The last two reasons are personal in nature and do not necessarily reflect law firm leadership choices.
Fear of the Future
Since the Great Recession of 2008 and the collapse of law firms such as Heller Ehrman, Howrey, Dreier, Dewey & LeBeouf, Patton Boggs, Bingham McCutchen, Dickstein Shapiro, Burleson and many others, law partners are paying attention to the decisions of the executive committee and executive staff. The phrase “law partner departures” and “debt covenants” are common place now among informed or concerned shareholders. I find partners are concerned about debt usage, expansion, and a leadership that is lacking courage and vision. I have heard the following comments even recently spoken to me: “I do not know how long my firm will be here if they keep expanding like this” or “The partners in charge have no vision for the future except status quo”.
Law partners leaving your law firm are looking for transparent, courageous leadership with vision.
Poor Succession Planning
Law partners leaving your law firm are looking for senior partners who value their contribution, take action, and mean what they say about passing on the baton.
Lacking Incentives and Competitive Compensation
See my post on Law Partner Compensation: An Overview for further reading.
Many law firms in the United States have a standard compensation system of Eat What You Kill (EWYK). Client origination and credit for new client business is closely tied to law partner annual compensation. Again, a compensation system will influence law firm culture. Client possession or protection can become a priority if predatory behaviors among partners go unchecked. Law firm leaders who permit and reward this “hunger-game-like” sharp-elbow behavior can drive out key partners and clients.
Law partner, leaving your law firm are looking for a collegial, collaborative environment for their practices and clients to thrive.
“I have national clients but my firm has only one office”; “I am loosing large cases because our bench appears small”; “I could get $1m in additional annual client billings if my firm had X type of practice area”; “They would rather pay themselves more than reinvest in strategic opportunities.” Growth is a wonderful fact of life, and yet it is challenging for anyone in leadership. Unfortunately some law firm leaders do not anticipate the growing demands of a partner’s practice and his/her clients. Eventually these partners are forced to consider their options or have their client base eroded by the competition.
Law partners leaving your law firm are looking for law firms that will accommodate their client demands as their practice grows.
Growing Client Conflicts
Law firms are supposed to be a safe place for clients and the partners who represent them. The following are two main reasons why client conflicts exasperate: 1) Firm growth 2) Controlling clients and weak executive committees.
I’ll start with the last first. I have seen lateraled law partners blind-sided by aggressive, controlling clients suing who they wish and dictating law firms actions because they are a “huge client”. The lateral was taken through a conflicts check and was assured his/her clients were welcomed to the firm. But he/she quickly learned that the executive committee was “helpless” to the client’s actions. I know of another group of attorneys that were faced with client hostility because the firm leadership gave other partners a thumbs up to start taking opposing cases without informing the group.
In regards to growth, with any firm fortunate to have 300-1,000 attorneys, the law of diminishing returns kicks in unless the leadership of the law firm is aggressive with their focus, conflict checks and targeted client base. In today’s competitive legal environment, clients are tired of signing waivers and turning a blind eye to “exceptions”. Again, these law partners are forced to either move or lose their clients to friendlier homes.
Law partners leaving your law firm are looking for the best long-term platform for their clients and their team.
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