More than ever, law firms are relying on lateral recruiting as a primary growth strategy for increasing revenue. Unfortunately, many lateral hires fail to meet law firm expectations. Studies show that up to 38 percent of lateral hires leave within five years, and an estimated 41 percent are “unsuccessful,” according to a global lateral hire risk mitigation study by Decipher and Citi Private Bank Law Firm Group as reported by ALM.

In a competitive and crowded market, how do you determine whether a lateral candidate's promised book of business is truly portable? What can you do to ensure a lateral partner hire is accurately representing his client relationships, and how can you assess the likelihood the business will follow? There is no magic formula. The whole process is a delicate balance between trusting a candidate's transparency and taking a calculated risk, but by incorporating these five simple best practices into your recruiting process, you increase your likelihood of predicting a lateral candidate's potential for success.

Expand Your Data Analysis

The majority of law firms rely on the Lateral Partner Questionnaire (LPQ) to gather information about a candidate's background, practice, billing rates, originations and collections, clients, etc.  While this provides a snapshot into a candidate's past and current practice and clients, it does not enable you to analyze the strength of existing relationships or the likelihood clients will follow to a new firm.

The key is to ask the right questions. If your current LPQ does not focus on client relationships, consider adding a few questions that allow you to dig deeper into these relationships and assess the strength of each. Focusing on the past three years, ask:

• Has your book of business increased or decreased, and by what percentage?
• Which clients are new within this timeframe?
• What percentage of growth stems from new matters with existing clients?
• What percentage of growth stems from new matters from new clients?

The answers should help you get a more accurate picture of the overall value of a lateral's portable business, provide you with insights into his business development activities, and identify potential synergies as you move to the next phase of evaluation.

Identify Client and Business Development Synergies

After an initial evaluation, you need to expand the scope of your due diligence to include a review and analysis of the candidate's business development and marketing activities, strategies, and skills.

• How does the candidate remain engaged with existing clients and attract new ones?
• Is this approach consistent with your firm's culture?
• Are there opportunities to leverage the lateral's existing relationships within the practice group to grow the business?
• Are there any potential conflicts with your firm's existing clients?

All of these factors will help to ensure a smooth transition once the hire starts at your firm.

Leverage Technology

Available technology can assist recruiters and law firms in their efforts to vet potential lateral candidates and the portability of their clients. For example, Monitor Suite—a business development software application that helps analyze legal data such as litigation, billing, case and prospective customer trends—enables you to evaluate the portability of a lateral's book of business. This type of business intelligence can provide critical information on how ingrained a particular client is with a given attorney. This analysis can help you determine how critical the candidate is to the client and vice versa. Questions to consider:

• How much business has the client done with the current firm?
• How many matters has the client had with the attorney over the past few years?
• Has the client used other lawyers at the candidate's current firm?
• Does the client leverage the services of other practice groups at the firm?

These factors will help you to determine the level of loyalty an existing client may have for either the candidate or the firm for which the candidate currently works. The more ingrained the client is with other attorneys and practice groups, the less likely that client will be to move with your potential hire.

Understand Lateral Hire Motivators

Laterals are typically motivated by specific reasons in their search to switch firms; it's your job to understand why. Compensation is often the primary driver, but other factors, such as lack of commitment to a practice area, brand decline, ineffective management, lack of loyalty and/or conflicts, may be the root cause as well. Understanding the lateral's “why” is important. If it seems he is running away from a situation rather than seeking out your firm for specific qualities, raise the red flag. It is very important to ensure the candidate's primary motivation for moving aligns with your expectations and goals, and that you discuss these motivations and expectations at the start of the hiring process.

Learn From Your Past Successes and Failures

As all law firms know, not all lateral hires succeed. To minimize risk, it is important that your firm tracks the performance of lateral hires to identify the factors that have contributed to both success and failure. Review past and present billable hours, revenues, billings and collections, production, profitability margins and business development hours. These performance indicators can help identify trends that can be used to predict future lateral candidates' potential for growing their books of business.

Recruiting successful lateral hires is a key growth strategy for many law firms in today's legal industry. While there are no guarantees that the attorney you hire will grow your firm's revenue, several key factors can help ensure success. While the value of a lateral's portable business may drive the initial stages of the recruiting process, dig deep into the details of relationships and client metrics, and don't be afraid to ask tough questions. The more knowledge you have about the candidate's practice and depth of client relationships, the less risk you are assuming and the sounder the decision to hire will be.

Jessica L. Gangjee is the director of recruitment and professional development at Burns White. She leads the firm's talent management initiatives including all aspects of attorney hiring, integration and assimilation, as well as the advancement and implementation of professional development programming. She also partners with senior management to support various firm committees including the diversity and inclusion committee and the women's initiative committee, and leads initiatives focused on mentorship, leadership training and strategic planning that allow the firm to recruit and retain the most talented attorneys to support the firm's strategic agenda.