Insight & Advice

Insight: Moving as a Partner

As the market starts to improve, and the legal landscape continues to evolve, more and more lawyers are seeking our advice on a fundamental issue: they want to know whether or not they are at the right firm and if it’s right to make a move.

Partner lateral hiring has now become a key part of a law firm’s business growth strategy and opportunities abound for successful lawyers to make the move at this senior level. There are a wide range of reasons for considering a move: you may be hoping to get a foot on the equity ladder; you may be concerned about the direction your current firm is taking; or you may simply want to know if the grass really is greener on the other (law firm’s) side.

Whatever your reasons for contemplating a move, we recommend that you look carefully before you leap. Take the time to review your current situation and think about what you might gain – and what you might lose – by changing firms.

In this first instalment of a three-part series, we provide a checklist of the issues that partners should consider before taking one of the most important decisions of their lives.

1. Equity

Is equity obtainable at this firm?

Some firms are notoriously tight with their equity. Rather than spending years knocking at a door that may never open, you need to find out now about your firm’s approach to sharing equity. Do not take assurances at face value – what is the partnership’s actual record in this area?

Do I really want to be an equity partner?

Becoming an equity partner has long been presented as the Holy Grail for solicitors. However, some lawyers have found that they are better off as a salaried or fixed-share partner. If a firm is not profitable, or does not have a clear long term strategy, do you want to invest a large capital sum to gain less than your current package? Do you agree with the partnership structure and way in which the profits are divided? No longer is a lockstep structure commonplace; a meritocratic assessment is gradually becoming the norm and this may or may not suit you.

Do I want to be an equity partner at this firm?

Often requiring a substantial capital investment, do you want to commit your long term future to this particular firm? One partner came to see us to discuss the fact that he did not agree with his firm’s long term strategy yet he was coming under pressure to accept equity. It became clear that whilst he wanted to become an equity partner, his current firm’s ambitions did not match his own and it was right to consider a move elsewhere.

2. Client fit and practice potential

Does my practice still fit at this firm?

Law firms change over time. What may once have been a great fit may now be less than perfect. Your practice may have developed in a particular direction. Does your current firm offer the right platform for your clients?

Would my practice fit better at another firm?

Moving, for example, to a bigger firm or a firm with a stronger brand might mean that your current clients will instruct you on larger transactions. It may also open up panel position appointments giving your practice increased opportunities. Alternatively, your practice may now need support in other areas which your firm cannot offer. On the other side, your clients may now not fit with your firm, if charge-out rates have increased and your clients are becoming less important to your firm. We have recently assisted a partner whose firm’s new strategy was to only work with clients with a specific level of turnover and charge out rates were increased. This partner’s practice did not fit with the new strategy and so we assisted him with a move to a smaller firm where the partner’s clients would fit more easily into the new firm’s profile.

Is my practice getting the support it needs/deserves?

Your firm may not be as committed to your practice as you are. This may be because the firm has practices which are considered more key than others, or simply that your practice is not given the recognition it deserves. If so, your practice may never reach its full potential. We have recently worked with a partner whose particular practice was only ever seen as a support function for the firm and so building it through the necessary recruitment of associates and an additional partner was never going to be achieved if she remained at the firm. A key part of our role was to identify a firm which understood and supported her specialism, thereby allowing her to reach her long term career ambitions.

Has my practice outgrown my firm?

If your practice has significantly expanded since joining your firm, is your firm still the best place to meet these new needs of the clients? Does your firm offer all of the expertise that your clients now expect to be serviced? A lawyer we recently advised had clients whose businesses required a range of corporate, commercial and property services over a range of jurisdictions. His current firm had a domestic focus and did not have enough capability to offer teams who could handle projects on such a large scale. His decision to move was based on moving to a firm which would continue to match the expanding nature of his client’s businesses.

3. Strategy

Does my firm’s strategy support my practice?

A change in strategy could leave your practice high and dry. If, for example, your practice is built around entrepreneurial clients, you would have every right to be concerned if your firm suddenly declared that it wants to be a corporate powerhouse.

Is my firm considering a merger or link-up?

Numerous law firms are currently looking for a merger partner or a link-up with different firms, such as joining with a US firm or even a domestic tie-up to bolster its core business areas. If your firm is one of them, you need to think long and hard about where such a move would leave you and your practice.

4. Culture

Is this the firm I joined?

We regularly hear the complaint that a firm’s personality has changed. A merger or a rash of departures is bound to impact on a firm’s culture. Just how many partners have joined your firm within the last five years? How many have left? And how long do lateral-hire partners stay? Do you enjoy the new culture?

Is this firm as collegiate as it claims?

Every law firm claims to be collegiate. But what’s the reality? In particular, how does the firm behave when times are tough? Is the partnership still a partnership with likeminded individuals?

What are the partner politics?

Differences arise in the most united of partnerships. Nonetheless, excessive rowing, the evolution of cliques and the concentration of power in the hands of a tiny minority are all grounds for concern. An example of this is a partner who came to see us who had backed a losing candidate who had stood for a management position at his firm. The contested process had left his firm deeply divided and he felt it made his position at the firm untenable, as someone who had clearly backed the losing candidate. He chose to move to a firm where he would not be associated with a partner who was out of favour with the new management team.

5. Remuneration

Am I being paid what I’m worth?

Your pay should reflect your practice’s performance, its value to the firm and the strength of your contribution to the practice. Is your remuneration package fair? Does it accurately reflect your contribution to the partnership? We speak to firms on a daily basis and can provide an objective assessment on whether your package is in line with market rate and if you could obtain a better level elsewhere or if you are better to stay put.

6. Career progression

Do I want to head my own department?

What are your prospects of becoming a head of department at your current firm? How long is the line of succession? But be careful what you wish for: while being in charge has its benefits, you may not enjoy committing so much of your time to management and administration. Alternatively, you may want to develop your skills further and oversee the development of your team from the top.

Do I want to develop my own practice?

If you have an independent streak, you may be better suited to a more entrepreneurial law firm, where you can have a high degree of autonomy and flexibility. Alternatively, you may relish the challenge of building a new team and practice from scratch.

7. Location

For a number of reasons, location is becoming an increasingly important consideration. Are you spending too much time commuting? Or would a move in location work better for your clients? Or are you intending to relocate in the next few years?

So, should I stay or should I go?

There are a wide range of considerations to think about before deciding if your current firm is the right home for you and platform for your career.

At RedLaw, we are well versed in providing a fully consultative service, working with you to analyse if a move will help you to achieve your objectives. Whilst we are in the business of moving partners from one firm to another, it may therefore surprise you to learn that we often tell partners to stay where they are. It may be because a partner’s ambitions can be fully realised at their current practice, or that it is better to build up a practice further before considering a move. Market timings can also be crucial to consider.

We are professional advisers and, as such, our role is to provide you with the advice and guidance you need to make the right decisions for you and your career. So, if we think you should stay put, we will tell you so.

While this may cost us a fee in the short term, we believe that honesty and integrity pay dividends in the long term. We have built a reputation for providing impartial advice and in giving the right guidance, so that if you choose to make a move now or at any time in the future, you will put your trust in us. We would never sacrifice that reputation for the sake of a fee.

For an individual consultation to discuss your career in the strictest of confidences, please contact one of our highly experienced partner consultants: Jonathan Benjamin, Director on 020 7842 0941 or Amy Hambleton, Director on 020 7842 0942.