FROM COURTING TO CROSS-SELLING: SOLVING THE LATERAL INTEGRATION PUZZLE.

• Author: Brumbaugh, Jocelyn
• Position: Cover story

Law firms have been opening their checkbooks in an unprecedented way of late in an effort to fuel growth through lateral acquisition. It is no longer unheard of to court top talent with up to $9 million in annual salaries. But without a process for vetting and integrating laterals, firms are watching their investments walk out the door.

An ALM survey reported that 96 percent of managing partners see lateral hiring as a key part of their strategy. As recruiters collect up to 30 percent of base salary, a $350,000 lateral quickly approaches $500,000 in hard costs, not to mention firm leaders' billable time lost to a seemingly endless interview process.

With management increasingly looking to laterals for growth, smart firms are taking a hard look at their lateral process--examining their selection criteria, identifying gaps in their integration process and holding their laterals accountable for delivering new business.

Law Firms' Growing Problem

Any way you slice it, the lateral market is on fire. On the law firm merger front, Altman Weil reported that the first half of 2015 saw 48 mergers--the most active period since they started keeping score.

The American Lawyer counted more than 2,736 lateral moves in the AmLaw 200 last year, a 7 percent increase over the previous year, and not far from its all-time high in 2009 in the midst of the financial crisis. But when ALM asked managing partners about their laterals' success rates, only 28 percent say their past laterals have been effective. Put the lateral moves and success-rate stats together, and it is a good bet that 2,000 of last year's big law laterals did not work out.

The reasons for this are twofold: First is the problem with firms' lateral selection process, and the second is how they manage their laterals' first 90 days.

Re-Envisioning the Courting Phase

With so many rounds of interviews with each lateral, management is often loath to add in another layer. But involving the chief marketing and business development officer can be key to assessing a laterals' strengths, cultural fit, the portability of their book of business and potential cross-selling opportunities.

Coordination is the key to managing the process.

"Having a single resource bringing together marketing, business development, professional development and other areas is essential," says Rebecca Bradley, director of legal recruiting at Foley & Lardner LLP. "This can help firms stay on top of the lateral pipeline and ensure all...