The rise in lateral hiring among law firms reflects a parallel willingness among lawyers to shift jobs but the real challenge for lateral hires in law firms is performance and retention. Instead of relying on outdated on-boarding programmes which focus on welcoming the executive to the organisation, Heidrick & Struggles has developed powerful assessment and transition processes and tools to help new lateral hires and their law firm, understand the challenges linked to better transition and take equal ownership for hiring success.

Not without risk

Hiring lateral talent does not come without risk. Risk is linked with both retention, but equally important if not more so, is the challenge for high performing ‘stars’ to replicate their performance once they have changed firms. Seminars run by Heidrick & Struggles and a joint study with Winmark have revealed it takes between 18 and 24 months for lateral hires to perform to a desired standard. However, people want to see signs within six to 12 months of people thriving in their new environment. The attitude is “we paid you a lot of money, now it is up to you to prove you are worth it”,  leaving it up to the individual to make it work and underestimating the crucial role of the firm in making the new hire  successful.

Keeping up the same level of performance

Through our leadership consulting experience, we understand it can take a long time to get up to speed as these new hires often overestimate their own contribution in previous successful performance and underestimate how much that success is down to exploiting company assets, which they cannot take with them when they move on.  Boris Groysberg, Professor of Business Administration at Harverd Business School, refers to  this as ‘nonportable human capital’ (colleagues, internal networks, processes and systems, firm’s reputation) as opposed to ‘portable human capital’ (technical competence, personal qualities, leadership skills, external network, personal relationships with clients). According to Groysberg, in the absence of this capital,  individuals struggle to achieve the same level of performance and that in some circumstances it may be as much as 5 years before a new hire achieves the previous level of performance. However, our own research reviewing our portfolio of placements over the past five years identified eight risk factors impacting the failure rate when moving into another job including company, country, level and scope. Company type, culture, category-industry and function are also factors that increase the possibility of failure for lateral hires.

Law firms need a talent strategy

In our experience, firms’ approach to lateral hiring tends to be too opportunistic – only about one in three law firms follow a talent strategy that supports the business strategy. Most firms tend to focus on technical ability and fail to articulate non-technical skills such as culture fit let alone their Employee Value Proposition (EVP). The ‘war for talent’ also affects the hiring process. Despite record levels of unemployment, the war for talent means the pool of quality candidates is smaller than it used to be - attracting, developing and retaining capable talent remains a constant challenge for law firms.

At Heidrick & Struggles we found that some HR structures within firms can work against the effectiveness of the entire process;  some firms’ approach to recruitment is more ‘process’ driven based on checkbox exercises and logistics. They tend to be less candidate centric, too inwardly focused and assessment information is seldom exchanged between internal stakeholders.

Creating the right environment for performance

In our view, firms need to create an environment which provides the best possible chance of performance for new partners. We recommend firms adopt a holistic approach when recruiting new lateral hires and base their decisions on risk mitigation and pragmatism in order to avoid the pitfalls and huge costs involved in getting it wrong. It is costly with regards to reputation and the expense of hiring another executive, therefore the following practical solutions could help mitigate risks linked to lateral hires:

1 Understanding the talent strategy

Good lateral hiring starts with understanding the talent strategy of the firm so more proactive hiring rather than opportunistic hiring takes place. Firms are encouraged to focus on portability of talent to establish whether the people you need would fit within your strategic talent needs.  Opportunistic hiring will continue and the quality of your hiring decisions, in such time pressured circumstances, should not be hampered provided that you have taken a proactive approach to articulating your talent strategy, culture and your employee value proposition.

2 Risk assessments

Implement in-depth risk assessments so hiring decisions are not purely based on competencies and experience, but also on risk factors linked to culture. The immediate benefit of this is that you have a more detailed understanding of the culture fit and stick factors that may alter the final hiring decision. For example a profile which technically fits the bill better may turn out to be riskier in terms of cultural integration and hence a less good business and commercial decision. Secondly, it helps final package negotiations as it will highlight push and pull factors. It will also help to establish the psychological contract between the two parties as it lays the foundations for a transparent onboarding plan once the deal is signed. 

3 Tailored on boarding

 To ensure that the new hire has got all the equipment to be able to be productive from day one, tailored professional on boarding programmes are an essential part of the hiring process. It should be based on intelligence gathered during more rigorous and targeted selection. Firms should consider setting up an on boarding team who will support the new hire, consisting of a coach, a senior HR representative, the managing partner and practice head.
Firms are often enticed by the fact they can attract a successful partner from a first tier or rival firm with the value of the client portfolio they might bring with them.   However, the importance of a successful onboarding and in-depth risk assessment cannot be overstated. Good on boarding programmes are based on the results of the in-depth risk assessment and support the equal responsibility of the firm and individual to be successful. Firms are urged to go over and above the more generic and very impersonal induction processes and employ more conventional in-depth assessments in which the technical and leadership capabilities are profiled in terms of potential, strengths and development needs. Heidrick & Struggles suggests complementing this with a targeted assessment of the eight risk factors linked to the lateral hiring process.

4  Think more before

In summary, more thought upfront would help identify the type of hire that would most likely fit best for your firm.  This would allow your firm to work on a more proactive attraction strategy by refining your EVP.  Meanwhile, professionalised acquisition processes would manage expectations better, ease pressure on new hires and bring more reality into the hiring process.  In turn new partners would feel supported with their emotional and intellectual integration into their new roles, enabling them to much faster meet the business’ expectations regarding performance.

Marc Bartel is the EMEA Managing Partner of the Functional Practices at Heidrick & Struggles  as well as the Global managing partner of the law firm practice and is the EMEA leader of the Global Legal, Risk & Compliance Practice. Caroline Vanovermeire is a Principal in its London office and is a member of the global Leadership Consulting practice.