There’s no debate about the lateral market – it’s hot. Demand for legal services is not growing at the same rate as law firm growth. The growth of the past ten years has been directly linked to lateral acquisitions.
But when companies rush to compete for top talent, they risk making wrong decisions. There are the obvious ones, like paying too much or not doing proper due diligence, which can result in hiring someone who is not culturally or strategically wrong. Bad lateral integration can be just as problematic.
According to DECIPHERSM Competitive Intelligence, 48% of lateral entrants leave their new company within five years, 62% of lateral entrants do not bring in their promised business books and 35% of lateral entrants do not fit into their new companies. A failed cross partner is extremely costly for companies – and is the exact opposite of the original goal of increasing sales. Based on their research, DECIPHERSM estimates the costs per company size for replacing a failed lateral partner as follows:
- Am Law 151-200 Law Office – $ 715,500
- At Law 51-150 Law Office – $ 1,509,300
- Am Law 50 Law Firm – $ 4,039,200
How do you increase the chances of a successful lateral entry? The answer is integration. Major Lindsey & Africa’s Lateral Partner Satisfaction Survey 2020 found that effective integration is the best single indicator of lateral success. Making a plan before your new partner walks in the door increases your chances of success.
And don’t forget the impact a forward-looking plan can have on one partner’s decision to choose your business over another. Show them that you will support them from day one.
Your new partner may have a large volume of business, but making sure the company can capitalize on it and deploy your new partner with existing customers is key. Failure of a side match is detrimental to both the attorney and the law firm, so it is in the best interests of both that this new match is successful. As a law firm marketer, you play a major role in this process.
When a new lateral partner arrives they have a lot to do in HR, accounting, and IT, but make sure to meet them in the first week to meet them. For most of the new partners, their schedules will be shorter while files are being transferred from their old companies. Make a note of yourself on their calendar as they get used to the new surroundings.
It is important that all of your partners, sideways or already, know what your role is and how you can help them. Find out as much as you can about your new partner’s practice and let them know how you can work together. You might ask:
Who are your current customers?
Who are your goals?
Do you bring a new area of knowledge or new skills?
How do they fit in with your existing partners – overlapping practices? overlapping customers?
Do you have a business plan? (If so, request a copy.)
This meeting is vital for you as a law firm marketer to develop a marketing integration strategy for your new partner.
Business development planning
Your company may not have a formal business development coaching program, but providing a few coaching sessions for your new partner can be an excellent investment.
A business development coach can help your side refine and update an existing business plan if they have one, or develop one if they don’t. Putting goals and actions on paper is one of the most important ways to ensure that you can achieve the actions you want.
A business development coach can also help your new partner think about creative ways to reach potential customers.
In addition to integrating your new partner internally, you need to rename them in the eyes of the outside world. This is especially important for high profile partners.
Find out about their experiences with media:
Are you comfortable speaking to reporters – on file, in the background?
Do you prefer to write articles?
Is speaking your preferred way of approaching people?
Knowing a new partner’s media experience and preferences can help you figure out how best to support them. First, think of the low-hanging fruit. What events or opportunities does the law firm currently have that you could involve your new partner in? What can you develop to connect your new partner with another, better known partner in the firm?
No two law firms are alike when it comes to lawyers or clients. In your first conversation with your new lateral partner, you will discuss their customers and possibly some of their goals. Research who else in the company is working with these customers and make sure your new partner gets in touch with them.
Help your new partner think about messages they can use when speaking to existing partners to get customer introductions. Nobody wants to introduce their customers to someone who is an idiot. A big red flag is when a new partner tells you they don’t need marketing, business development, or public relations; they just want the company’s rainmakers to introduce them to their biggest customers.
Can you imagine how that usually turns out? Bad. Your new partner needs to bring something that encourages them to get to know each other. Do you have a new strength that you can offer the customer?
Initial investments pay off
It may seem like a big investment in time to go through all of these steps with a new lateral after it took months or maybe even years to woo them and get them in the door, but it is necessary. Keep in mind that any failed cross-connect will cost your business at least $ 715,500 and potentially more than $ 4 million. It is in everyone’s interest that your new page is successfully integrated.
Don’t skimp on marketing efforts after getting your employees on board. The investment of time and money that you make now increases the chances of a successful integration and reduces costs in the long term.