Recruiters also have some questions to answer here. Yes, firms make the final decisions on hires and it is their responsibility to do the calculations, but what are recruiters doing to make sure hires stick around?
One could argue that it is in fact against the recruiter’s interests that a hire lasts. If someone only lasts two years in post, not only is it not the recruiter’s responsibility but when the partner does leave, they may well get the candidate back and the post to recruit for once again – a nice win-win-win. With churn like this it is little wonder the legal recruitment market in London is saturated with players eager to join the free-for-all.
Firms need to ask themselves whether their suppliers have a genuine conflict of interest or whether this is just a quirk of the system they have to live with. Firms might also quiz recruiters more carefully about what they are doing to overcome this and what they can do to ensure that not only are they finding suitably qualified hires, but hires that will endure, before parting with the eye-watering sums often associated with a search assignment.
A few months ago, I moderated a panel of hiring partners here in New York in front of an audience of recruiters, and one particularly experienced, emphatic, and blunt panelist decried the lack of professionalism and seriousness about engaging in prior due diligence that he found with far too many recruiters. Memorably, he exclaimed, “Sometimes I get the distinct impression this person is calling me from their dining table, in a robe and fuzzy socks.”
Take note: This is not something anyone, most assuredly including you, should pursue with a “fuzzy socks” mindset. There’s data out there, it tells a story, and you can do better than average if you apply yourself.
Quote: “You don’t pay your partners with revenue, you pay them with profits, and every firm that’s ever failed has been collecting respectable levels of revenue up until the day the lights went out and even beyond.”
Old phone chatter, revisited: “In MLB, you can do stuff because it has TV and a league. Imagine running teams (firms) without that…”
Quote: “If luck determined outcomes, there would be NO VARIATIONS across practice areas or reflecting the “nationality” of the arrival and destination firms (US or UK, and US or UK, producing the four permutations).” [emphasis mine]
I’m not sure this is an accurate statement. For example, if it is a pure coin flip (i.e. pure luck with a 50% success rate for any individual hire), then you certainly wouldn’t expect every subset to have a 50% success rate, you would only expect the most common success rates to be near 50% and success rates deviating from 50% to be ever less common the more they deviated.
If you won’t offer a guarantee, then doesn’t the lateral assume all the risk of a failure in portability, and doesn’t that make the lateral more vulnerable to a general downturn – easier to throw out the last guy in if you’ve got no financial commitment to him? Laterals also, it seems to me, have less connection to the existing “insiders,” so they’re also more vulnerable to any subjective component to an existing compensation system.