Firms Put Emphasis on Lateral Hire Integration

Once the wining and dining, the vetting and the negotiations are over, the process of successfully adding a lateral partner to a firm really begins.

"It takes two years for a firm to integrate a lateral partner," says Tim Powers, lateral hiring partner and member of the board of directors for 521-lawyer Haynes and Boone.

The lateral partner needs to learn not only what the practice group is doing on a daily basis, but also about what matters colleagues are working on firmwide, he says. During the firm's annual partners' retreat, senior partners will meet with those partners who joined the firm laterally during the previous two years to talk about what aspects of the transition were successful and which need to be fixed, Powers says.

"The person has got to be happy to thrive," he says.

The Dallas-based firm is one of 18 of Texas' 25 largest firms that participated in Texas Lawyer's Lateral Hiring Survey. The firms are ranked by the number of lawyers in their Texas offices on Texas Lawyer's "The Texas 100" list published in April 2012.

The 18 firms hired 303 laterals during 2012, an increase of 10.2 percent when compared with the 275 laterals hired by the same firms the previous year.

The firms likely increased their 2012 lateral hiring in Texas to keep pace with increased business driven by the energy sector, says firm consultant William Cobb of Houston.

"When done well, lateral hiring is the fastest way for firms to grow," he says.

Counting Haynes and Boone, four of the firms each hired more than 20 lateral lawyers during 2012: Houston-based Andrews Kurth and Bracewell & Giuliani and Dallas-based Winstead. Collectively, the four firms hired 125 lateral lawyers, 28 of them partners.

Firms can grow revenues quickly by expanding services to lateral partners' clients, but that requires effective integration into firm operations and culture, say senior lawyers with each of the four firms.

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Firms Put Emphasis on Lateral Hire Integration

Once the wining and dining, the vetting and the negotiations are over, the process of successfully adding a lateral partner to a firm really begins.

"It takes two years for a firm to integrate a lateral partner," says Tim Powers, lateral hiring partner and member of the board of directors for 521-lawyer Haynes and Boone.

The lateral partner needs to learn not only what the practice group is doing on a daily basis, but also about what matters colleagues are working on firmwide, he says. During the firm's annual partners' retreat, senior partners will meet with those partners who joined the firm laterally during the previous two years to talk about what aspects of the transition were successful and which need to be fixed, Powers says.

"The person has got to be happy to thrive," he says.

The Dallas-based firm is one of 18 of Texas' 25 largest firms that participated in Texas Lawyer's Lateral Hiring Survey. The firms are ranked by the number of lawyers in their Texas offices on Texas Lawyer's "The Texas 100" list published in April 2012.

The 18 firms hired 303 laterals during 2012, an increase of 10.2 percent when compared with the 275 laterals hired by the same firms the previous year.

The firms likely increased their 2012 lateral hiring in Texas to keep pace with increased business driven by the energy sector, says firm consultant William Cobb of Houston.

"When done well, lateral hiring is the fastest way for firms to grow," he says.

Counting Haynes and Boone, four of the firms each hired more than 20 lateral lawyers during 2012: Houston-based Andrews Kurth and Bracewell & Giuliani and Dallas-based Winstead. Collectively, the four firms hired 125 lateral lawyers, 28 of them partners.

Firms can grow revenues quickly by expanding services to lateral partners' clients, but that requires effective integration into firm operations and culture, say senior lawyers with each of the four firms.

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The Legal's Top 10 Lateral Hires of 2012

Each year, we at The Legal take a look back at all the lateral moves in Pennsylvania in an effort to determine the 10 most important lateral hires of the previous year. Complete profiles of the top laterals and details about each move will be included in our "Top Lateral Hires of 2012" supplement, scheduled to be published in The Legal on Tuesday, February 19.

Will Pennsylvania's Sizzling January Lateral Climate Last?

Despite the cold temperatures, January is often the month that the lateral market thaws and attorneys begin to make moves. This year has been no exception, with maybe a little more movement than in recent years. But is the movement among Pennsylvania's firms the typical start-of-the-year burst or is it a sign of things to come in 2013?

In the first month of the year, there were at least six lateral moves plus a large group defection among Pennsylvania firms.

Recruiters and law firm leaders alike expect a similar lateral market to what the industry saw in 2011 and 2012 in terms of activity, with the bulk of Pennsylvania firms looking outside of the state for their hiring needs.

Ballard Spahr Chairman Mark Stewart said he would expect the same amount of movement in 2013 as the market saw in the last few years. Stewart said any increased movement in January is typical of the culture and economic structure at law firms that supports movement soon after the end of a firm's fiscal year.

For Ballard Spahr, lateral acquisitions have been focused in other markets.

"We're rarely talking to lateral candidates in Philadelphia," Stewart said.

That isn't necessarily because the firm feels it has maxed out on attorneys in Pennsylvania, Stewart said, but rather there just isn't as much movement. Aside from the Decherts and Morgan, Lewis & Bockiuses of the world, most of the large firms in the market are on the same playing field financially, Stewart said. Attorneys therefore don't look to move much among those firms. The Philadelphia market is mature and many of the clients are institutionalized in the city, causing attorneys to stay put, Stewart said.

Recruiter Robert Nourian of Coleman Nourian said Pennsylvania firms have reached critical mass in their home-state offices and can service clients from those offices with the people they already have. Similar to Stewart's point, Nourian noted it is also difficult for one firm to woo a group of partners from across the street because there aren't that many differences between the firms.

A Pennsylvania firm talking to laterals in other markets, however, can be an easier sell because it gives those laterals the opportunity to fill out a practice need in a newer office and potentially have more leadership potential or autonomy, Nourian said.

If firms are looking to grow revenue in a lower-demand economy, entering new markets where there is a growing industry base, such as the energy market in Texas, may be the way to go, Nourian said. It might also make sense for firms to open new offices to be closer to a client.

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Wanted: Lateral Hires With Real-World Experience

The fall hiring season has returned with renewed vigor, with some big law firms bringing in as many new fall associates as they did before the economic downturn.

One thing is noticeable: more of the new fall hires have prior professional experience and have been out of law school for a few years, as firms continue to seek candidates who fill specific staffing needs.

"A lot of the hiring is not back to the pre-recession madness, but it has rebounded," said Peter Giuliani, a Weston, Conn.-based law firm economic adviser who works with 100-lawyer-plus law firms throughout the country. "I don't think the salaries have gone up much at all though."

These days, new hires are expected to know more than the average applicant fresh from law school. That means lawyers with strong internships, court clerkships or business experience are in highest demand. "There is a big inventory on the market of lawyers who have experience," Giuliani said.

Day Pitney, with offices in New York, New Jersey and Hartford, Conn., announced it has hired 16 new associates, including eight in Connecticut, which the firm said is its biggest fall associate class ever. Wiggin and Dana welcomed four new associates to its offices in New Haven, Conn. and Stamford, Conn. Shipman & Goodwin brought in eight new associates, including many with useful past-work experience for its growing practice areas, including education and import/export law.

"The talent pool was exceptional in 2012 and many things differentiated these hires," said Karen Staib, partner and chair of the Hiring Committee for Shipman & Goodwin. Worth noting she said, was that "some previously held jobs within industries where we provide legal services."

One of the new hires is a former teacher who has joined the firm's education law practice. Another worked as an aerospace engineer before going to law school. "He will begin his legal career in our import/export compliance practice, servicing some of the world's largest defense and aerospace corporations and manufacturers," Staib said.

EXPERIENCE GAPS

A factor fueling this hiring spree is that many large firms cut back their staffing levels in 2009 and 2010, especially with regard to newer associates, right after the economic downturn began in 2008. Law firms have since realized there is a gap between their staffing levels and their ability to keep clients happy.

"So now the firms are back out in the market, hiring laterally to fill experience gaps," Giuliani said. "That is what may be churning a little action in the recruiting market."