Are You Recruiting Warlords? Or Partners?

The most important factors in recruiting laterals are: (a) that they have a sizable, portable book of business; and (b) that they can start generating revenue from that book almost immediately after coming on board your firm. Right?

Wrong, and wrong.

I've written previously about the economics of lateral recruitment—the piece I cite there actually prompted more reader feedback than most articles in recent memory.    Today I want to propose two counter-intuitive, or at least counter-received-wisdom, beliefs I have about lateral recruitment which live on the fascinating borderline between economics and culture. 

The ideas that follow are my own, and for better or worse I haven't found any "outside" source that I can allude to or cite anywhere in the remaining body of this piece.

Lateral Error #1: You hire them for their portable book.

This premise gets matters off on the wrong foot, both caustic and misguided.  "Misguided" because any partner worth his/her salt will have a practice two, three or five years hence that has evolved substantially from where it is today. (Isn't your time horizon that long?  If not, can we talk?)

But the "caustic" part is the worst part, and the important part:   Casting the conversation in terms of immediate revenue invites the lateral to view your firm as merely in the hunt for a piece of meat, and your incumbent partners to expect the expensive lateral asset to start delivering value post-haste or be viewed as a bad investment.   Expecting this to lead to bonds of loyalty is madness.

Do I, then, counsel ignoring the portable book?   Yes, I do.  The only possible exception is if you're entertaining the possibility of bringing over a small group with a marquee client—then and only then should you give more than a passing glance to the billable's.

Lateral Error #2:  Wanting them to hit the ground running

Is your goal to truly integrate the lateral into your firm?  Specifically, is  your goal to inculcate them with your firm's culture, your firm's "way," your firm's values? 

If so, the worst thing that could happen is for them to seamlessly move over, working on the same matters for the same individuals as they had been at their prior firm the week before, changing only a phone number, an email address, and the particular view out the window.  If this happens, they will bring with them their (unchanged) good and bad habits, their attitudes towards associates and professional staff, their expectations (or lack thereof) about their partners, and their cultural upbringing.  You will have accomplished nothing more than recruiting, as David Maister puts it, a "warlord with a following."

I believe the best thing that can happen when a lateral arrives is that their pipeline suddenly dries up, and they're thrown in together on a matter with some of your veterans.  Face it:  These people may be self-confident or even arrogant, but they're not stupid, insensitive, or unobservant.   I might even take this a step farther and skip the step of leaving it to chance whether the pipeline dries up:  I might recommend you send the new lateral on a brief "meet and greet" road show so that your incumbent partners know them and understand what they can offer.  In the meantime, their clients will just have to be handled by existing professionals, won't they?

They will see how your veteran partners treat their peers, how associates interact, the level of respect the professional staff receives, and the alacrity with which client phone calls and emails are returned.  They will see, and they will learn. And don't forget how motivated they are to succeed on the new team.

When their client does get busy again, that client will not experience being a client of Lateral X; the client will experience being a client of your firm.  We can hope that works out for the best; but if it does not, wouldn't you rather know sooner than later?

So if I think you should trash the conventional rationales about why you hire laterals, do I recommend you eschew them entirely?

Not at all.

Rather, I recommend a different litmus test for lateral recruitment:  Will they add to our "platform"?

Do they bring a skill-set, an industry-specific knowledge, a practice area specialty, that complements and (potentially) builds upon something we already do, but which we could do more effectively, more comprehensively, more thoroughly, for more clients, or with wider geographic reach?

If they add nothing to the platform, take a pass.  Or, as the chair of an AmLaw 10 firm put it to me earlier this month, "we hire to add capability."  What they do not do is hire to add revenue.  In fact, they don't even ask potential laterals about the size of their presumptively portable books—much to the consternation of some people they talk to.

That gets the conversation off on the right foot.

Update (31 May 2007)

Charlie Green of "Trust Matters" writes:

Well-seen and well said. 

Lateral-hiring for their portable book, and to hit the ground running, is like marrying someone else's spouse because they seem pretty good at the job of being a spouse.

There's no such thing as a "good" wife or husband, except in context of the particular husband or wife they're paired with.  Relationships, whether in marriages or law firm partnerships, are particular, not generic. The baggage one brings to either relationship is largely positive or negative not on its own merits, but depending on the relationship one is entering.

Or so it seems to me.