Are law firms spending too much time and money branding the firm? We argue that in the age of the portable professional, strategies for promoting, retaining and attracting lateral partner talent — similar to the investment services model — is the path to long-term success.
How does a firm attract top lateral partners with large portable practices and at the same time retain its rainmakers? The solution is the same for both—demonstrate to potential and existing partners that the firm is focused on their success.
Wall Street clearly gets this. When Goldman Sachs reportedly paid out more than $16.5 billion in bonuses, The New Yorker explained, “talent is the most precious commodity on Wall Street; it’s what they sell, so it’s also what they have to pay for.”
At law firms, like all professional service organizations, talent is everything. But consider the difference in how much firms spend branding the firm versus what they spend branding the powerful business generators that are their individual partners.
Firms with genuine respect for their partners—and clients—never lose sight of the fact that clients hire the lawyers they trust, as opposed to law firms with letterhead they recognize. To this end, firms likely to succeed in today’s fluid market are those that view themselves as “brand marketers” rather than the “brand.”
Think of the way the Coca-Cola Company markets Coke, Diet Coke, Sprite, Dasani, or how Apple creates marketing campaigns for iPod, iTunes, and Mac. Just as General Motors bestows a hefty budget to its premier brand, Cadillac, the lateral that has been heavily wooed should expect, upon joining a new firm, to receive marketing dollars devoted to significantly increasing their value during their first year there.
Working with new laterals to develop and implement strategic, sophisticated marketing campaigns enhances their likelihood of success—and sends a clear message to other potential laterals that the firm is dedicated to helping its professionals grow their practices.
Law firms spend millions in branding campaigns in attempts to attract and institutionalize clients. Down the hall, the recruiting department, operating under the assumption that lawyers and their books of business are portable, has little or no marketing support devoted to recruiting partners.
Free agency has created a strong sellers’ market for laterals. Consider that The American Lawyer reported that between October 2005 and October 2006, 2,429 partners changed firms among the AmLaw 200—an average of 12 partners per firm!
This situation exists because clients control the state of play. As long as clients agree, lawyers are free to move as often as they like. To some extent, the legal market has always operated this way. Time and time again, in-house counsel say they hire lawyers not law firms. To avoid this attrition and client instability, firms must recognize where client loyalty lies. The key to obtaining and keeping top clients is keeping their lawyers happy.
When clients say they hire lawyers not firms, we know that practically speaking, what clients really mean is they hire great lawyers who work for “safe” firms. But what makes a firm safe? Safe means a firm with an established reputation for success; a reputation obtained by the results its individual lawyers achieve over time. By devoting marketing dollars to helping laterals solidify and expand their reputations, firms will find that clients come and stay too.
Smart firms should demonstrate to highly sought-after laterals that when they join the firm, an aggressive, sustained, customized marketing campaign will be immediately initiated on their behalf. This is an appealing commitment that’s hard to ignore.
Savvy candidates understand the importance of marketing support, and include marketing expectations in negotiations. They ask questions such as, “how many seminars will you help me produce this year?” And “how will you position my practice in the media?” And, “what will my personal branding budget be?”
Though the acquisition of lateral talent represents a significant investment in time and resources, oddly, many firms fail to engage in much business strategizing at the outset of the recruitment process. Firms frequently do not provide recruiters with enough guidance on the type of candidate likely to add true value to a firm’s current service offering.
In considering potential laterals, firm managers should carefully examine their long-term marketing plans, and identify and select candidates based on these needs. Procter & Gamble would not have purchased Gillette without a strategic marketing plan in place to leverage it. Smart firms ask difficult questions such as: “Where is our practice going, and what talent do we need to make it stronger?” “What will the debt market look like in five years, and who do we need to capitalize on that?” “What business could we get with partner ‘X’ that neither of us can get on our own?”
In an era of free agency, talent is everything. The firms that do the best job of articulating why lateral superstars will fare best with them—and then back up their plans with strategic, focused marketing support, will find they are able to successfully institutionalize the talent they need to attract the clients they want.