Our consultant Warren Lefton talks about the current lateral partner market and why it is now very busy.
Partners keep asking me why the lateral recruitment market is currently so strong. The only way for me to answer it is to turn the question back onto those partners who seem open to the possibility of a move. I keep getting the same answers:
Firstly, pent-up demand/ law firms not being as affected by the current crisis
During the first part of 2020, the market was challenging. Most moves (aside from restructuring) were ones which were already well-advanced in a process and seemed very strategic. But, by the summer, law firms realised that the pandemic wasn’t affecting them as badly as other businesses and things started to change. In fact, we’ve seen a number of firms – particularly US firms, which finished their accounting year in December – increase their profitability and revenues. Will this be the case with the UK? I suspect the top 50 firms will post marginal gains or, at worse, be flat. With law firms realising their revenues and profitability weren’t being hampered too much, this gave them the confidence to be open again to seeing lateral partners. Therefore, the number of lateral processes increased from July through to this year, and we’re seeing a huge amount landing.
Secondly, boredom
The pandemic has given partners more time to contemplate ‘where they’re at’ in their lives and what they might want to achieve. Being at home has meant most partners’ lives have become more fluid. This has freed up the time they have to talk to headhunters and deal with other things in their lives. If they get a call with an interesting opportunity, they have more scope to explore it. Even when they have limited push factors. Occasionally I get the comment: ‘I don’t have any push factors’, but we all know everyone has push factors. It’s more about how pressing they are, and I would argue more partners have had the time to consider those more recently. Going through a lateral process tends to accentuate those push factors and, if a partner is tempted to have an informal call, they can end up deciding the grass is greener elsewhere.
Thirdly, cultural issues/fellow partners/strength of their practice
There are always rifts between partners. Especially when a firm has a more meritocratic partnership. This can lead to animosity and feeling hard done by. In addition, I suspect in an environment where no-one can see each other and where business development is more on a 1-2-1 basis rather than in groups, individualistic behaviours become more prominent. Furthermore, as people are working in a more siloed fashion (which is inevitable when they’re not in the office), partners start to feel that their practices are purely theirs. This gives them confidence when talking to other firms about the strength of their client following.
I’m sure there are other factors, as well as the usual attraction of moving to either a more profitable firm, a better platform, or the desire to build something new for a firm. Or even in many cases, the strategic direction of their own firm.
