When you ask law firms about their growth strategies, lateral hiring is often top of the list. In fact, in a new UUֱ report on the ways in which law firms grow organically, 40% of firms said lateral hiring is a top priority for the coming months and years.
It’s no surprise: lateral hiring is a powerful talent management strategy, but, in the era of the Great Resignation, where firms are increasingly busy and the legal talent market is hotter than ever, bringing people on board with the right credentials and relationships in place to hit the ground running is an attractive prospect. For lawyers, it enables them to take advantage of high demand by moving to firms that best suit their short - and long-term professional and personal goals.
Even those firms not immediately looking at talent acquisition can’t help but be aware that other firms may be reaching out to their lawyers, even if they aren’t yet reaching out to theirs.
As well as strengthening existing practice areas, many firms use lateral hiring as a way to expand into new ones, or even to open new offices in different cities or overseas.
According to Sir Nigel Knowles, Group CEO at DWF, “In some cases you are just underweight and need to employ more people, or, in other cases, you may have some skills gaps which you need to fill.” For DWF, lateral hiring is also a way to take advantage of any interest from exceptional candidates. “When you’re growing like we are, I don’t think there’s an office or practice group anywhere in the world where, if we found the right person, we wouldn’t have a meaningful conversation.”
The UUֱ organic growth report revealed that small law firms tend to favour lateral hires as an alternative to full-scale mergers, enabling them to expand without sacrificing their current culture. However, in some cases lateral hires can act as unofficial ‘mini-mergers’, especially when a new fee-earner brings their entire team with them, making cultural change difficult to avoid entirely.
While lateral hiring can be a key tool in the organic growth arsenal, it does involve taking a (often expensive) risk. That’s why it is vital to hire thoughtfully and for the right reasons, do your due diligence and ensure any lateral hires are a cultural, as well as a strategic, fit.
Vicky Brackett, CEO, Business Legal Services at Irwin Mitchell, says that, while lateral hiring is a strong part of its strategy, in the past the firm has found it to be somewhat hit-and-miss. “Historically, some lateral hires have worked brilliantly and others really haven’t”, she says. “When I started in my role, I paused all lateral hires to allow us to really understand what we want the firm to be for our clients. The truth is that too many lateral hires kills opportunities for the next generation. Now our strategy is two-fold: do they provide a skill we need because a client is asking for it, or do they align with a client type we want? That way, we gain acceleration but we don’t put noses out of joint within the business.”
At Taylor Wessing, Managing Partner Shane Gleghorn is employing a similar two-track strategy. “We use targeted lateral hiring together with pretty aggressive promotion of young talent.”
Firms seem aligned that, in today’s competitive law firm environment, lateral hiring often is a necessary component for long-term success – but to avoid losing existing talent, don’t sacrifice internal development for the sake of external stars.
Download the report on organic growth opportunities here.
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