Over the past decade, California law firms have added 7,741 partners to their headcounts, according to Rival Edge, an ALM service. With an average investment of $600,000 in each partner recruit, that represents an industry investment of nearly half a billion dollars by California law firms trying to grow revenues through lateral partner acquisition. That doesn’t count all the attorney hours, nonpartner hires, staff time and expenses associated with deals that didn’t materialize—altogether another sizable investment. And, of course, that’s just California. Nationally, that investment is in the tens of billions of dollars.

One would expect that after 10 years and billions of dollars in investment that the process would have significantly evolved and become more efficient. After all, lateral partner recruiting has been one of the top growth strategies used by law firms for the past several years. Were firms truly running as businesses, you’d expect to find a finely-tuned due diligence process in place, one which accurately projects the clients that will come with the partner. And you would expect to see benchmarking and monitoring systems, which guide and constantly refine the lateral recruiting, integration and client acquisitions processes. And there would be some evidence that returns on the investment in laterals was increasing.

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