Photo: Shutterstock.com

Despite proclamations of doom for the lockstep model and the growing consensus that money is king, partners seem to place compensation quite low on their priority list when deciding where to go when making a lateral move, according to Major, Lindsey & Africa's lateral partner survey.

Anticipated compensation was the sixth most important factor in choosing a firm. No. 1 was practice area support followed by firm culture, personality of partners and firm financial health.

"I think the cliche is that lawyers only care about money. I've been doing this for almost 30 years, and I can count on the fingers of one or two hands partners who came to me and said, 'Put me in the firm that pays me the most,'" said Jon Lindsey, a founding partner of MLA and author of the report.

Rainmakers like Ethan Klingsberg and Erica Berthou occupy the top 1% of 1%, Lindsey said, and do not represent the typical lateral moves, even in Big Law. Further reinforcing the point is the fact that respondents did not show any measurable increase in satisfaction when offered a compensation guarantee.

But that's not to say money doesn't play a factor. A decrease in compensation after a move is correlated with a decrease in satisfaction, while the converse also holds true. Highly influential factors like practice support and firm financial health are related to increased compensation.

"What will flow from that is higher compensation," Lindsey said. "Nobody is doing this for charitable reasons, but it's not the first factor."

MLA reached out to more than 120,000 law firm partners for the survey. The firm received 2,278 responses, of which 1,376 were lateral partners. Respondents included partners from more than 30 practice areas and more than 60 cities. MLA has published three other partner satisfaction surveys—in 1996, 2006 and 2014.

What Makes a Lateral Happy?

The single most reliable predictor of lateral partner satisfaction is integration into the partnership, which can take a variety of forms and is intrinsically connected to firm culture. Will the lateral partner be brought to pitches? Is there a culture of hoarding clients? Distinct from the business side: Do the partners know each other's significant other?

Firms have been steadily improving their integration efforts, as evidenced by past lateral partner surveys, Lindsey said, especially as more firms have come to realize that lateral acquisitions are a central component of firm growth.

"It's expensive to get it wrong, and so if you don't integrate people they'll be less likely to be satisfied. They want to make sure they're cross-selling, that they're integrating people socially and they feel like they're a part of the firm and just not renting space," Lindsey said.

Partners also reported feeling dissatisfied when their new firms fail to meet expectations. Reality fell short most often in practice support, compensation and their new firm's client base.

Additionally, the report found a "shockingly inadequate" lack of due diligence on the part of the lateral partner. Just 29% of all respondents reported reviewing their new firm's financial statements, leases or loan documents before joining—down nearly 10% from the 2014 report. Even more egregious, Lindsey added, is the fact that a little over half of respondents, 55%, said that they read the partnership agreement.

"Back in 2014, I think people still had Dewey [& LeBoeuf] in mind as well as the recession," Lindsey said. "Less than half read the partnership agreement. I found that both surprising and disturbing. You think of lawyers as being conscious and thorough."

Furthermore, the report found evidence that due diligence can affect lateral satisfaction. While the length of search did not have an effect on satisfaction, the quality of due diligence "appears to be far more critical to success," Lindsey wrote.

Additionally, partners who reviewed their new firm's critical financial documents such as lease and loan documents before joining were nearly ten percent more likely to be "very satisfied" with their compensation.

Diversity

Demographics also played a factor in their searches. While diversity ranked relatively low as a priority when respondents were asked what factors were important to joining a new firm, female partners, younger partners and minority partners were more influenced by a firm's diversity or lack thereof.

Minority partners also reported lower satisfaction among a wide range of indicators. Female lateral partners and partners of color were significantly less likely to feel they had obtained adequate and accurate information on their firms than were male and white partners, respectively.

Female partners were far more likely than males to report that their firm had been "very ineffective" in integrating them into the partnership (12.7% female; 6.1% male), and were less likely to be "very satisfied" overall (50% for females, 55% for males).

Regarding compensation, female partners reported a higher frequency of a small pay raise—between 1% and 10%, though they were far less likely than male partners to see a compensation increase of 30% or more. A higher percentage of black partners said they were "not at all" satisfied with their compensation, reporting an aggregate dissatisfaction of 37.8% as opposed to their white counterparts, who reported 16.9% dissatisfaction.

Read More:

Lockstep Model Is Doomed, Says Recruiter Behind Cleary Rainmaker Move