I believe the explanation is one part psychology and one part desperation necessity. Consider:
- From the Reagan/Thacher era at the latest, and arguably starting even earlier, BigLaw as a whole was indeed on a growth tear. For perspective, the largest law firm in the country in 1965 had 125 lawyers; in the most recent NLJ 350 tables, Firm #350 was within a dozen of the same number.
- The consequence is that virtually anyone above junior associate level has experienced that growth run first-hand and shelves of behavioral economics literature would tell you this has conditioned them to set their expectations for more of the same.
- We as human beings and as organizations find growth dynamic, exciting, vital. It’s more exciting to launch a new brand than to reconfigure an old one; to open a new office than to strengthen an existing one; to land a new client than to win a greater wallet share from an existing one; and to hire a new lateral than to cultivate home-grown talent. Having an affair is a thrill; strengthening your marriage takes actual commitment and follow-through. Managing partners and hiring partners are exempt from none of this.
- Lawyers by predilection, training, and selection are insecure. Validation as evidenced by success at an external courtship is a powerful narcotic.
We need to break the habit, to “just say no.”
You’re going to tell me we benefit from the rejuvenation of incoming immigrant blood with fresh perspectives. As a native-born New Yorker, I resoundingly agree. But look at corporate America, where top-level turnover in the form of de novo recruits from outside the company is actually relatively rare; promotion from within is always preferred, and the default question when a vacancy occurs is whether anyone already on the team can fill the gap. Fresh perspectives are great; but is that really what any of us think lateral partners bring? Of course not; the last thing we’re expecting (or rewarding) is temerity. We’re looking for revenue, pure and simple.
Or you’re going to tell me laterals make sense when they’re moving to a better “platform.” (I think of “a better platform” as the incessant and pounding refrain in that catchy and well-known Hollywood musical composition, The Headhunters’ Chorus.)
A better platform is indeed a valuable goal—the one time in 20 it’s actually true. I file talk of better platforms in the same mental space I reserve for vows to quit smoking and lose weight: Great idea, but good luck with the execution, pal.
Finally, I mentioned “necessity.”
I’ve written, and Bill and Chris evidently agree, that BigLaw has moved into a phase of fighting over market share. I needn’t dwell on this, or on the twin disruptions of disaggregation and substitution assaulting our citadels. If you regularly read Adam Smith, Esq. you can fill in the here-truncated analysis on your own.
So managing partners, practice group leaders, executive committees, and noisy gorillas in general, agitate for lateral partner hires: Because it’s a known lever that’s readily to hand and which has worked in the past. It shows we’re doing something, dagnabit.
Is it even possible for a lateral recruitment strategy to make sense? Well, of course.
One of the scarcest of commodities in our world is the gifted partner who can actually forge a bond with clients, become that welcomed adviser, and provide such superb service that considerations of price and alternative suppliers drop off the radar. A rare talent indeed – perhaps even more rare in Law Land, where every custom and experience between college and making partner seem to be militating in favor of turning out people who are on hair-trigger to challenge everything they hear, come it from the mouth of friend or foe, who have such a powerful sense of urgency that they tend to rush through every human encounter to get to “the answer,” and who lack all grace and resilience when faced with setbacks. Still, there are such people, and another way of saying they’re scarce is to say that there aren’t enough to go around. So:
- If your firm has a well thought out strategy that involves how it can actually differentiate itself in the eyes of clients in the marketplace;
- If targeted laterals – a few a year – can “I swear on the Bible” advance that strategy in ways you can explain in 25 words or less, without reference to “book,” or “revenue;” and
- If you can actually segregate the wheat from the chaff in the crucible of recruiting and interviewing
then and only then would I tell you to proceed.
This is hard work; virtually no one seems to be doing it. Instead we’re following the pack, something we do exceptionally well (and are exceptionally comfortable doing).
My attribution of this to the late, great Peter Drucker may be mistaken, but I hope he would forgive me if they’re not his words: “The only business strategy worse than not having one is borrowing your competitor’s.”
Of course, to avoid doing that you might actually have to think—different.