Law Firm Partner Hiring: Insights, Strategies, and Challenges for Lateral Moves
Over my 25-year career, I have learned some important lessons about how law firms hire partners laterally. Law firms rarely hire partners for a specific opening; instead, they create opportunities in response to your business, cross-selling potential, partner-level work for institutional clients, or other partners' inability to independently service large books of business.
Partner-Level Transitions
Transitioning to a new firm as a partner is a distinct and complex process compared to the associate-level job search. Partners essentially make a business proposition, showcasing how they can contribute to the firm’s profitability and strategic goals.
This article explores the dynamics of partner-level hiring, strategies for partners with and without portable business, and common challenges.
The Unique Nature of Partner Hiring
Most law firms do not post specific openings for partners. Instead, they assess whether a partner can enhance the firm’s business model. Partners are viewed as potential business assets. Firms provide them with offices, staff, branding, and other resources in exchange for a percentage of their collections. For partners without portable business, firms offer a platform to generate business and work on existing clients’ matters.
Partners with Portable Business
The most common path for partners seeking new opportunities is to bring portable business, typically ranging from $250,000 to over $3,000,000, depending on the firm's size and type. Portable business is the lifeblood of law firms, driving profits, supporting overhead, and enabling cross-selling opportunities.
Benefits of a Portable Business
Having a portable business makes partners highly marketable. Law firms are usually more interested in accommodating partners with portable businesses, as they are self-sufficient and reduce the firm’s risk. When partners evaluate firms, they are effectively shopping for a platform to support their business, which is a much better position than merely seeking an employer.
Evaluation Criteria
Law firms consider several factors when evaluating a partner:
Revenue Generation: Firms assess the partner’s portable business volume and its consistency over the last three years. They prefer candidates with a pattern of increasing business.
Junior partners generally need less business but must show potential for growth.
Senior partners typically require a more substantial and consistent book of business.
Larger firms and firms in major markets demand higher revenue generation compared to smaller firms.
Billing Rates: Firms analyze historical billing rates to ensure compatibility. Partners with lower rates may face challenges at firms prioritizing high-revenue clients, while those with higher rates need firms where clients can sustain such costs.
Client Relationships: Firms value long-term client relationships and want reassurance that clients will transition smoothly. Length and revenue history of these relationships provide additional security.
Potential Conflicts: Firms carefully review potential conflicts with existing clients to avoid ethical or business issues.
Compensation Expectations: Most firms follow the "rule of thirds" for partner compensation: one-third for the partner, one-third for overhead, and one-third for other partners. Exceptions exist, particularly in fully remote firms or those with alternative business models.
Examples
An attorney with $30 million in business received a $7 million annual guaranteed base salary at a major city firm.
An attorney with $700,000 in business in a mountain state received offers between $300,000 and $450,000.
Growth Potential at a New Firm
Partners often switch firms to:
Access a better brand or broader practice areas.
Avoid conflicts of interest.
Align with firms offering lower billing rates for clients.
Common Scenarios
Smaller Firm to Larger Firm: Partners may move for better resources, branding, and cross-selling opportunities. Larger firms often attract partners whose current firms struggle to support their clients due to limitations in staffing, expertise, or other resources.
Larger Firm to Smaller Firm: Partners may seek smaller firms for better autonomy, lower billing rates, or opportunities to grow their practice without the constraints of large-firm structures.
Cultural and Work-Style Fit
Law firm cultures vary significantly. When hiring laterally, firms emphasize compatibility with their culture, compensation models, and work style. Partners also prioritize cultural fit to ensure they feel valued, supported, and aligned with the firm's operational style.
Search Strategies for Partners with Business
1.) Proactively Target Firms, Not Specific Job Openings
Unlike associate-level candidates, law firms rarely set aside partner applications due to a lack of openings. Instead, they evaluate these applications carefully, as they represent business opportunities rather than traditional job requests. Partners should focus on identifying firms whose culture, compensation models, available work, and support systems align with their professional goals.
Every partner’s objective is to find the right “home” – a platform that maximizes their success. This requires meeting with firms, understanding their offerings, and assessing mutual compatibility. Firms are particularly interested in partners who can generate immediate and future revenue, leading to multiple offers for those with a strong portable book of business.
2.) Detach Your Ego from the Process
Many lateral partners hesitate to approach firms out of concern for their reputation or the perception of vulnerability within the legal community. This is a mistake. Transitioning as a partner is akin to selling a business; it’s a transactional process focused on value and potential. Law firms assess whether your business aligns with their strategic goals, making the process entirely objective and unrelated to personal pride.
Understanding this dynamic can help you approach the search strategically, recognizing that offers or compensation structures reflect the firm's risk-reward evaluation rather than personal judgment.
3.) Evaluate What You Receive Versus What You Give
When joining a firm, partners essentially exchange a percentage of their revenue for access to the firm's resources, including brand strength, office quality, support systems, and cross-selling opportunities. This trade-off varies widely between firms, with each offering distinct benefits and challenges.
As businesses, law firms aim to minimize costs while maximizing profitability. A thorough understanding of the firm’s infrastructure, reputation, and market positioning is critical when evaluating potential partnerships.
4.) Explore Underserved Geographic Markets
Partners with national or portable client bases may find greater success in smaller markets where their expertise is in higher demand. Firms in these areas often lack attorneys with sophisticated experience, creating opportunities for partners to expand their practices. Transitioning from larger markets to smaller ones can lead to untapped growth potential and less competition.
5.) Challenges for Solo Practitioners
Solo practitioners face unique challenges when considering moves to law firms, primarily due to overhead and profit-sharing adjustments that reduce take-home income. For instance, a solo generating $600,000 annually might retain only $300,000 after joining a firm. However, some solos value the reduced administrative burden and expanded resources that firms offer, even at the cost of lower net income.
Despite these advantages, many solos ultimately prefer independence unless the firm's platform significantly enhances their earning potential and work-life balance.
Final Thoughts
Navigating a lateral move as a partner requires careful planning and a clear understanding of the hiring process. Whether you have a robust book of business or are seeking a platform to grow, aligning your goals with a firm's expectations is key to a successful transition.
If you’re interested in a partner-level move and would like representation, submit your details here: https://www.bcgsearch.com/resume_submit.php.
