Editor’s Note: The authors of this post work for executive search consulting firm, The McCormick Group.
By Stephen Nelson, Managing Principal, and Ellen Dougherty, Consultant, of The McCormick Group
Recent surveys indicate that while lateral partner hiring remains as robust as ever, a large number of managing partners question the overall efficacy of such efforts. In particular, this year’s Citi-Hildebrandt Client Advisory reports that managing partners when asked responded that only 54 percent of laterals reach a break-even point five years after their hire. And that percentage has steadily declined over the past three years.
A variety of reasons are given for such uneven results, including failure by firms to do proper due diligence with regard to lateral candidates, failure of “promised” portable business to transfer to the new firm, and inadequate lateral integration programs.
We have found in a series of meetings with partners and recruiting professionals, that very few law firms have embarked upon, let alone completed, a program to measure the impact of their lateral recruiting efforts. This contrasts with the very sophisticated analytics other professional services’ firms use in their hiring, strategic growth and retention programs. Indeed,a recent report by Deloitte Consulting indicates that “companies that build capabilities in people analytics outperform their peers in quality of hire, retention, and leadership capabilities, and are generally higher ranked in their employment brand.”
These studies can serve to test the typical conclusions that are merely based on anecdotal evidence. Firm leadership often tends to recall one or two great successes or one or two abysmal failures, and draw a set of conclusions based on that episodic, but skimpy evidence.
This is a great time for law firms to distinguish themselves from the competition. There has been such an explosion of resource data that has recently come to the legal market. Products such as Leopard Solutions, ALM RivalEdge, Thomson Reuters Peer Monitor, and Bloomberg Law Business Intelligence all provide significant detail on who’s moving and how firms are doing, at least with regard to sheer numbers. Yet sometimes forgotten is the most valuable data; the data that virtually every firm keeps with regard to who has been interviewed, who has been hired, and how well each hire has done. While firms generally have substantial data on their lateral recruiting efforts, very few have ever chosen to implement the kind of analytics that can provide important details about how an individual law firm’s recruiting and integration program is working, including:
- A profile of successful lateral candidates.It may be that some firms may do better with a strong up-and-comer with little portable business, than with the so-called rainmaker, who is always (hopeful and) promising millions of dollars in business. This is where successful firms can emerge as the real market leaders. Not only do they seek the right candidates for their firm, they respond to these laterals with the same kind of decisiveness as they do in their client representations — with clarity, focus and a strong command of the facts.
Yet sometimes forgotten is the most valuable data; the data that virtually every firm keeps with regard to who has been interviewed, who has been hired, and how well each hire has done.
- Why firms might miss out on “key” candidates.Details as to why certain candidates that have been interviewed at your firm and decided to go elsewhere, or stay at their present firms can remain a mystery unless the hard questions are asked inside and outside the firm. The process may point to weaknesses of the firm’s interview process or some reputational issues in the legal market. Firms need to know what others perceive — right or wrong. That way, firms can get out ahead of the market.
- Details as to why a firm didn’t even get on the radar screen of certain desirable candidates. Again, this may point to negative perceptions of the firm in the legal marketplace. But it also may signal a failure to use legal recruiters effectively.
- A comparison of the firm’s success in direct outreach to candidates, versus those presented by legal recruiters. Direct outreach by partners is often a successful way to tap potential candidates, but firms need to be sure that those outreaches are done effectively. Analytics can identify which approaches have been successful. Moreover, a comprehensive study can determine which legal recruiters have been the most successful at bringing the firm quality candidates that fit, and why.
- Percentage of success by practice group.While this may point to the relative attractiveness of certain practices versus others, it may also point to the relative number of attractive lateral candidates in particular practice areas. For example, a study is likely to find that many more white-collar litigators have changed firms than food and drug lawyers. As a result, a firm might decide that it might need to be more flexible in its approach to hiring in the latter area.
It’s important to remember that analytics and metrics can be used to inform your strategy, but not act as the basis of your strategy. That said, having a good sense of what separates success from failure at your firm is an important starting point in designing a legal growth program.