A lateral move requires discreet investigation

Nancy Crotti, The Daily Record Newswire

Thinking of making a lateral move to be a partner at another firm? Prepare to do a lot of research, because the grass is not always greener under another firm's shingle.

Your research topics should include the firm's financial situation, compensation, culture, staffing, integration of new partners, diversity of clients, marketing and professional development. Be especially mindful of the ethical issues involved in leaving and bringing clients with you, or your old firm may haul you to court.

Roy S. Ginsburg, an attorney coach and consultant, offered plenty of advice on how to decide whether this move will benefit you, your career and your family.

Ginsburg recommended talking to as many recently departed partners as possible about the above-mentioned topics:

- Compensation: Every firm has a compensation formula. Find out how that formula is composed and it will tell you something about the culture at the firm.

A firm that bases compensation on billable hours rewards hard work, productivity and teamwork. A firm that promotes business development pushes business origination and relies less on teamwork. The formula will tell you a lot about the firm's culture, Ginsburg said.

Is the compensation system open or closed? In an open system, every attorney knows how much the other attorneys earn. As an equity partner, you will be an owner, and will find this information helpful.

"Lawyers get far more upset if they find out someone across the hall is making more money than if a competitor is," Ginsburg added.

How does the firm reward other forms of work, such as pro bono representation, serving on firm management committees, and bar association involvement?

- More culture: Does this firm promote itself as family-friendly? If they tell you they expect 2,000 billable hours but the former partners say it's closer to 2,300, that's not family-friendly.

- What is the firm's financial condition? Ask about long-term liabilities, debt and debt service, client diversity, and whether the firm relies on cyclical practice areas, such as bankruptcy law. How much will you, as an equity partner, be required to contribute? Will that money be used to pay for retired attorneys' pensions? If you would bring a big book of business, you won't want any surprises that might make the move temporary.

Some large law firms have such high overhead that they have to borrow money to stay afloat, Ginsburg said.

Read up on the 2012 collapse of prominent New York City law firm Dewey & LeBoeuf. The case highlights the importance of asking about a firm's financial condition and makeup. Ginsburg believes that many attorneys who joined the combined firm would have done well to inquire about its financial condition first.

Two Wall Street firms, Dewey Ballantine and LeBoeuf, Lamb, Greene & MacRae, merged in 2007, creating a firm with a whopping 1,300 lawyers, the New York Times reported.

Three executives from Dewey & LeBoeuf went on trial in May, accused of defrauding its lenders by using accounting gimmicks. The Times story reported that an attorney for the firm's chairperson accused "disloyal partners (who) took clients with them, and they rendered the firm unable to survive. They picked up their marbles and ran."

- Staffing: How is your work going to get out? What kinds of human resources and technology systems does the firm have in place?

- Marketing: A 200-lawyer firm with one marketing person probably doesn't really believe in helping its lawyers with business development. If the marketing department is well-staffed, you can assume that this firm is willing to help the lawyers do what they think they should be doing.

- The integration process: Does the firm have a formal integration process for laterals, or does it make things up as it goes along? Existing laterals at the firm may have something to say about their transition and integration.

- Professional development: How much does the firm pay for continuing legal education and other training, or provide it in-house?

- A few more words of advice: Know that asking questions could raise eyebrows and hackles. Ginsburg warned would-be laterals to be careful about how they seek information about the firm.

"You're not sure how well-received it will be when you start probing," he said. "It's a balancing act."

Published: Thu, Aug 13, 2015

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