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Easy Come, Easy Go: Why the Lateral Market for Partners is Booming

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  • Easy Come, Easy Go: Why the Lateral Market for Partners is Booming

    Once upon a time, it was in law as it was in the rest of corporate America. Men (and they were mostly men) joined companies or law firms and stayed there, come hell or high water. And once they made partner, there was no chance they were leaving. Partnership conferred a sort of tenure hard to find elsewhere in the working world. In exchange for one’s hard work and loyalty, he got a lot of money, security, and, well, pretty interesting work.

    Oh how times have changed. Partners are increasingly making like associates and bolting at the first whiff of greener pastures.

    This notion — that making partner at one firm is only a stepping stone to partnership at another — is given the full treatment by the National Law Journal on Monday. In a wide-ranging interview with editor-in-chief David Brown, three BigLaw chairmen and one recruiter sat down to chat about this new era of lateral movement. It’s a good interview, partly because the chairman give what appears to be fairly candid (though not entirely un-self-serving) takes on what’s going on within their own firms and elsewhere.

    At the outset, recruiter Lynn Mestel summarizes what’s happening like this:
    The market for lateral partners is the most robust it’s been in 22 years. The downturn has caused lateral hiring to become the most direct and possibility the only source to increase revenues. That’s because organic growth for your own client base is just not happening. . . [W]hat’s happening is that the firms are pushing down their bottom producers. . . . The second thing is . . . you have a lot of people who are looking at the valuation of their shares to see what the next valuation of shares is going to be. And then, finally, [partners] are deluged with calls from headhunters. . . . The associate market is now dead, and all of those people in the headhunting community are looking to make a living, and they are cold calling partners, partners, partners. So your partners probably get four to five times more calls today than they ever have.

    In other words, insecurity has seized the industry. Strong firms are desperate to grow their client bases, while lawyers at weaker firms are desperate to jump ship before things get worse.

    But moving isn’t easy, especially if you lack a robust book-of-business. Says Mestel:
    There are some people who have no books of business, and it becomes almost impossible unless they just have a coveted skill set and an excellent reputation. Truly, there’s a lot of tragedy going on right now. Unemployed very excellent practitioners spent decades working God-knows-how-many hours at the practice, and now they can’t get a job.

    All the more reason, rising associates, to learn how to grab your slice of the pie — and grow it. Do that, and you’ll never be without a home, says Mestel:
    If a lateral has somewhere between a half a million to a million dollars of the business, there’s always a place for them. That’s sort of the good news about the entire legal market. It’s very, very wide and it’s deep and it can handle a lot of these people.

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