When Dewey & LeBoeuf closed its doors in 2012, many in the legal industry assumed that its failure would spark a trend toward more conservative approaches to lateral hiring among large firms. Instead, lateral movements have continued to rise. At many large law firms, strategies for expansion through organic growth have fallen well behind lateral efforts.
But history has shown that firm growth accomplished by laterals or acquisitions can be a short-sighted exercise fraught with underlying issues. Even in optimum conditions, successful lateral hiring is a challenge. Industry data show that more than one-third of lateral hires will leave their new firms or they will be let go within five years. Taking into account laterals and underperforming groups that haven’t left their firms, the failure rate climbs above 50 percent. These numbers should scare any firm looking to integrate new talent, and present a very obvious question: What can firms do to increase the probability of successful lateral hires?
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