Choosing laterals over homegrown talent may be shortsighted for firms
Posted Feb 13, 2013 05:42 pm CST
Wooing experienced laterals, and often pillaging entire practice groups, has become the norm for law firms in search of revenue growth.
In fact, lateral recruitment grew 9.7 percent in 2012, the American Lawyer reports. However, in contrast, the more profitable Am Law 200 firms reported fewer lateral hires.
This paradox prompts the question: Are firms foregoing long-term success by failing to invest in the training and management of its associates and junior partners?
The immediate revenue stream gained from lateral hiring overlooks the greater value of building lasting client relationships and law firm leadership over the long term, says American Lawyer reporter Robin Sparkman in a blog post.
“As mandatory retirement policies are abandoned, and even firms with formal policies waive them for high-powered partners, client succession becomes more of a concern,” says Sparkman, who identifies ways firms can nurture organic talent for future success.
“The message sent to the client is that only this senior partner can do the work—so we need to keep him on rather than move the work to younger partners. The more firms can actively manage this delicate process—and reduce the risk that the client will leave when that senior partner does retire—the better.”