April 2006
Law Firm Partners — To Stay or To Go?
by Karen A. Andersen
By February, most parents are officially midway through the ski-lesson season, basketball is winding up, and Little League tryouts are looming. After a rain-soaked January, we must admit we are officially into 2006. 2005 law-firm revenue and per-partner profit numbers have been calculated and are making their way out into publication. Law firm partners are confronted with the annual decision: Do I stay or do I go?
Because many law firms back-end load their partner distributions, paying out disproportionately larger sums in January (plus or minus a month or two), law firm partners who switch firms typically try to orchestrate such moves to occur soon after these distributions are made. And since a typical lateral partner-hiring process takes two to four months to complete, the math (and history) indicates that partners contemplating a move need to do their serious thinking right about now.
So, how do partners decide whether to consider alternatives or stay put for another year?
Making an informed decision
First, let me start with a fairly obvious disclosure: I'm an interested party. If every partner in town chooses the "stay put" option, I might have to go back to being a lawyer again (smile). Second, another obvious statement: A decision to continue at your current firm is a decision. As such — except for that group of mostly senior partners who have made the understandable decision to finish their careers with their present law firm — the decision to stay should be an informed decision.
The Seattle legal market today looks nothing like it did in the 1990s and nothing like it did in the dot-com days of 2000. Remember when you felt like you could keep a pretty good handle on what was going on in the legal market by staying in touch with friends at Perkins, Bogle, Preston, and Davis? Now add to that mix DLA Piper (formerly Piper Rudnick Gray Cary, formerly Gray Cary), Wilson Sonsini, Orrick, Dorsey, Heller Ehrman/Venture Law Group, and boutiques such as Summit Law Group, Susman Godfrey, and Corr Cronin that have opened or merged offices within the past decade. Remember when everyone touted their ties and focus on the Pacific Northwest? Now many local firms are nationally and internationally focused, and many are seeking to improve their Am Law numbers to be attractive to lateral partner candidates in New York, San Francisco, and Los Angeles. As a result of these changes, gaining an understanding of the alternatives to staying at your current firm has become much more difficult. In order to decide whether staying at your firm is better for your career and your clients than any of the available alternatives, you can:
• Educate yourself about all the firms that could represent viable opportunities.
• Come up with criteria that narrows the field of viable options to a number that you feel capable of personally conducting adequate due diligence on. If, for example, you focus on antitrust litigation, and it is critical to your clients that they have access to a Brussels office, you could relatively easily identify the handful of firms that meet that key criteria and (not as easily) educate yourself about those firms and the opportunities they might present for you.
• Establish a relationship with an experienced recruiter who studies the legal marketplace for a living and specializes in advising partners about the various options. If you decide to go with this option, please read on.
Using a recruiter
Bias duly acknowledged, a good recruiter can:
• Provide an overview of the market as a whole, and the various options that might be available to someone with your experience and client base.
• Based on the criteria you outline as important, help narrow the list of options, and then provide more detailed information about that more refined list.
• Help you gather and package relevant materials, such as a résumé (although web bios are a common and acceptable substitute these days), business plan, and a compilation of practice statistics.
• Give you immediate and credible access to key decision-makers at target firms, ensuring that your inquiry is initially reviewed on a "need to know" basis (key to maintaining confidentiality).
• Help manage the timing of the various stages of meetings with firms so that you maintain momentum but also do not get put in an awkward position because the process at one firm progresses much more rapidly than at others.
• Serve as a trusted adviser throughout the interview process on the myriad issues that arise, including client conflict issues, fiduciary obligations, when and how to withdraw from discussions with a particular firm, and when and how to ask for the sensitive information necessary to gain a more complete financial picture of a target firm.
• Help get to the right (not necessarily most lucrative) compensation package, including advising on how to approach such things as amount and duration of guaranteed payments, "bridge bonuses" (sometimes provided to compensate for money being left on the table), or issues relating to capital contributions that often arise because of different "payback" and "pay-in" schedules.
The list could go on. The bottom line is that most partners change law firms once or twice in their careers — not enough to become experts on the topic. An experienced recruiter will have walked dozens of partners through the transition process. That experience results in wisdom that can prove very valuable to the partner considering a change.
What about the cost to the firm?
The cost to the acquiring firm of the recruiter's fee is, I believe, a nonissue. As I tell every partner I work with, if you were to call up a target firm and ask — "Should I send my résumé over to you directly or should I approach your firm through a recruiter?" — it would be a rare firm that would choose the recruiter option. I believe, however, that the question misses the point. The correct questions to ask are:
• Do I think the recruiter will add value for me in the course of the representation? (If no, stop reading and delete the names of all recruiters from your Outlook contacts list.)
• Will the acquiring firm view my candidacy less favorably, or pay me less, if I am represented by a recruiter?
The marketplace for lateral partner talent has never been as competitive as it is today. Recruiters with a track record of success in partner placement are buried with requests from law firms seeking lateral partners, including requests to search for desirable partners on a retained-fee basis. Firms do not — and cannot afford to — view candidates less favorably if they are represented by a recruiter. Additionally, recruiting fees are not out of the norm for most firms, as many routinely pay recruiters for associates as well as paralegals and legal assistants.
The informed decision is yours
Should you stay or go? In the end, only you can make that call. Make it with as much information and insight as possible.
Karen A. Andersen heads the Seattle office for the legal recruiting firm Major, Lindsey & Africa. Andersen was formerly with Davis Wright Tremaine and Summit Law Group. She specializes in counseling law firm partners about possible lateral moves and providing in-house legal search expertise for large and small companies.
