The Rise of Group Lateral Hires in Law Firms
In the lateral attorney market, the rising trend of group lateral moves has continued to grow. Polsinelli’s recruitment of 47 partners from Holland & Knight to open a Philadelphia office in 2024 was a headline grabbing move. Paul Weiss addition of 13 private equity partners from Kirkland with reported salaries of $20 million for the group leaders raised eyebrows throughout the industry.
While these news making moves are still outliers, firms are increasingly embracing the benefit of group moves. Not all group moves make headlines, what has become more common in the industry are smaller groups of partners who realize they are stronger moving as a team and market themselves together to firms.
Why Are Group Lateral Hires Gaining Momentum?
Client Retention is Higher with Groups
While individual lateral partner hires will always be more prevalent than groups, there are inherited risks with the process. If a lateral partner is leaving an established group at their prior firm, there will likely be disputes over client ownership. While the new firm may attempt to conduct due diligence through the lateral partner process, the ethical rules limit partners abilities to solicit clients until they have provided notice. There is always a risk that clients will decide to stay with the prior firm. Alternatively, with a group move, there is a higher likelihood of client retention because multiple partners who work with a client are moving together.
Integration is Easier with Groups
Cultural integration is key to the success with a lateral move. With groups, firms know that a working team dynamic already exists between the lateral attorneys. When you go to a party it is always easier if you come with a friend. The same is true for group moves, it is easier to integrate when you already have an existing support system. Firms also see the willingness of a group to move together as an indicator that the partners foster a positive relationship with their team members. In fact, sometimes a partner with a large book who doesn’t bring a group can be a red flag that either the book is inflated, or the partner is hard to work with.
Ability to Expand into New Markets
Moving into a new market can be exceptionally hard. In many cases, firms who want to open an office in a new city are only interested in groups. Trying to gain a market presence with one or two partner hires can be hard to build on. While firms can open with a handful of partners from different firms joining at the same time, this can open the door for integration and cultural issues. Having an established group helps with culture. Additionally, from the group perspective office openings can allow the group to maintain independence while still having the support of the larger firm.
Growing New Practices and Industry Focuses
Many practice areas require various specialties to be successful. Groups aren’t always the partners with the same exact practice but rather can be complimentary practices that cross sell between each other. This expands the options that partners can consider when weighing different firms.
What Attorneys Should Consider Before Making a Group Lateral Move
The decision to move as a group or an individual partner is not an easy one. If you are a lateral partner making a move on your own, the only decision maker in the process is you. When you go with a group, you may be pushed towards an opportunity that isn’t as strong of a choice for you to support the group.
Before gathering a group internally, consider the clients you work with. If your work is intertwined and there is a high likelihood of a fight for clients, it may be better to move as a group. Alternatively, if your clients are different, then you have a higher risk of conflicts trying to move as a group.
Consider the personalities of the group and reputations in the market. While a positive reputation can help you, a partner who is not well liked may cause you to get cut simply through the association.
Economics should play a major role in the decision. In many cases, one partner will have a larger book than the rest of the group. Firms vary drastically in how they decide compensation and the offers can vary depending on the priorities of the firms in areas such as originations, billable hours or seniority. When moving as a group, the compensation priorities and models must be considered to avoid situations where some partners are unhappy with the offer presented. While firm compensation models are important to consider, many firms will offer larger packages to groups, because the risk of failure is lower.
The Future of Group Lateral Hiring
As competition for lateral partners escalates, group lateral hires will remain a key growth strategy. Law firms that can attract and accommodate the needs of groups will continue to capitalize on this trend.
Whether you’re an attorney considering a group move or a firm exploring this growth avenue, understanding the dynamics and benefits of group lateral hiring is critical to maximizing success.
