Factors Law Firm Partners Should Consider When Moving Laterally

July 26, 2022 – Making a sideways turn as a partner in a law firm is both exciting and scary. Most law firms have formalized their process of due diligence on potential candidates with the Lateral Partner Questionnaire, but what information should you consider when doing your due diligence with them?

Weighing the risk versus the reward of moving companies should be done thoughtfully, and there are several factors to consider. Keep in mind what prompted you to explore the new business in the first place, as well as how your current business compares to each of these factors.

Convenient adjustment

Ideally, a new business will have more opportunities for you than your current business. You want to think about how your current practice will translate to a new practice.

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Serve current customers. Transitioning from your current practice is a big part of being successful with a lateral move. As you evaluate the new opportunity, consider whether you think your customers would go with you if you were to take a step. Does the company have the reputation and capabilities that your customers need? Will you have the additional supportive practices you need to get the job done?

Side partners often face conflicts or rate issues for some or even all of their current customers. This doesn’t necessarily mean it’s not the right practice for you, but you should consider how it will ultimately affect your practice and your success in your new practice.

Opportunities for new customers. Moving to a new business isn’t just about keeping what you have; this is the opportunity to expand your practice through new opportunities. As you navigate the interview process, think about who in the new business you could introduce to your existing clients, whose client relationships you could help develop, and who you could collaborate with to succeed in attracting new business.

Does the new firm have additional practice areas or strengths that would be attractive to your clients, allowing you to expand the relationship and increase your builds? Although a company may not be interested in a potential side who is only looking to serve the company’s existing customers, there may be opportunities to be part of a team working with a particular clientele or for you. to sell your expertise and expand the relationship.

You should also think about what it would be like to present new work from the new company. Will the new company’s reputation, team, and capabilities give you a greater chance of success than where you are now?

Support. What will the new business associate, marketing and administrative support do for you?

Your practice group. Depending on your area of ​​practice and where you are in your career, you may have different visions of the ideal size of your practice group. For some, being part of a very large group offers the greatest opportunity because you can use their resources and reputation to build credibility and get more quality work. Others may prefer to be part of a smaller team that is less crowded and has less competition for opportunities. Think about what it would be like to work in this group and how you would fit in.

Your office. Both large and small offices have advantages for potential candidates, and you want to think about what that means for you. You should know the company’s long-term growth plan for the office and understand the commitment to the geographic region. You should also consider what other practice groups there are in the firm, which groups they are working to expand, and how that will work for you and your practice. Another consideration is the company’s stance on remote work.

When thinking about corporate culture, don’t just look at the national or practice group level. Companies strive for a consistent culture from office to office, but regional differences, variations in office size and leadership, and other factors usually cause slight differences from office to office. the other.

Your shape. Ultimately, all of these factors add up to your fit with the company. Is there a unique opportunity for you because the company needs someone with your specific skills at your career level? If so, drill down into the details and identify who you would work with to pursue these opportunities in the new business.

Financial situation of the company

Understanding the finances of the business before committing will be crucial. Many companies will let you get a detailed look at the books if you sign an NDA, and someone should be able to answer any questions you have about the company’s finances before you accept an offer.

A business that is objectively more profitable may not be for you.

While it’s important to look at financial metrics, know that depending on your practice and the opportunity, you might still be better off at a firm that’s lower in the AmLaw 200.

•What is the firm’s strategic plan for the next five years? Do they plan to open new offices or hire laterals to strengthen current practice areas?

•What does it bring to the partners? Paying top associates means a chance to work with stronger talent, but how will that affect the rates you charge for their work?

Compensation

Of course, the amount you will earn is an important factor in changing careers. However, numbers shouldn’t be the only way to think about compensation.

Compensation is in many ways what drives the culture, so listen carefully when the new company describes its compensation package. Is it an open or closed compensation system? Does it work on a formula? Is there a compensation committee? If so, who is on it? Understanding all of this will help you determine how your contribution to the business will be assessed.

It is rare for a letter of offer to provide guarantees beyond one year and the rest of the year at start-up. Understand how your compensation will be calculated once you enter the regular compensation cycle. Try to figure out what your compensation will look like in five and ten years based on the best, most likely and worst case scenarios.

Equity vs Unfairness

Many two-tier businesses often use laterals as non-capital partners. If so, understand what the equity parameters and criteria are and when you would be eligible if that is your goal.

Stock deals often include the requirement that the new partner obtain a loan to cover their stock buyback. Some companies instead have your equity payment subtracted from your salary. Either way, a company normally only does it one way, and you’ll want to understand how that will affect your compensation.

Personal factors

Although many factors in the decision are objective, the subjective factor should not be discounted.

Often partners are energized by the opportunity to work with new partners they like, which leads to their success in a new venture.

•What need do you fill for the potential new business? What does this mean for you and the opportunity you would seize?

• Do you like your potential new partners?

• Does the corporate culture suit you?

•What is the company’s position on remote work? How does this work for you personally and how will it impact associates working on your cases?

You should be able to get the answers to many of these questions during the interview process. For those that are still pending once you receive the offer, you can increase them after the offer before accepting. Ultimately, how much weight you give to each of these factors in your decision is up to you, but think ahead about what matters most and could be the deciding factor for you.

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The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and non-partisanship by principles of trust. Westlaw Today is owned by Thomson Reuters and operates independently of Reuters News.

carol morganster

Carol Morganstern is an associate in Major’s Partner Practice Group, Lindsey & Africa, working in both San Francisco and Palo Alto offices. She places partners, attorneys, high-level government attorneys, and groups in firms and helps launch new offices. She can be contacted at [email protected]

Denise W. Whigham