Ed. note: This is the latest installment in a series of posts from Mainspring Legal’s team of expert contributors. Michael Allen is the CEO of Mainspring Legal. He is based in the Los Angeles office and focuses exclusively on Partner and General Counsel placements for top firms and companies. Prior to founding Lateral Link in 2006, he worked as an attorney at both Gibson, Dunn & Crutcher LLP and Irell & Manella LLP. Michael graduated summa cum laude from the University of California, San Diego before earning his JD, cum laude, from Harvard Law School.
From cars and watches to wine and shoes, we are all brand conscious. The same goes for law firms, which we rank in terms of profits, size, leverage, offices, and the like. At some point, however, senior associates may want to really think about their next steps because they oftentimes face an important decision in this stage of their career that will shape the remainder lives as legal professionals. The decision is usually threefold: i) make a run for partner at my current mega firm (albeit outside your control); ii) look for partnership elsewhere (likely “under top Am Law 200 firms”); or iii) go in-house (which is a timely process, and you may not have all that much time remaining).
1. There is a Vibrant Market. There are approximately the same number of opportunities within the top “Am Law 200” and “under the Am Law 200.” Courtesy of Leopard Solutions, here is the “Lateral Report” by practice area over the prior rolling 12 months for firms ranking under the Am Law 200. As you can see, there is a lot movement in the firms ranking under the top Am Law 200. Of importance, there were around 1,200 lateral partner moves. My first point is that there is a market to explore. The next several points address the why.
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2. Bill Rate Flexibility. Firms are businesses, and the billable hour is their source of income (unless on contingency of course). Firms expect their partners to remain productive, and by that, they want to see them bring in their own work and staff it with an associate or two when possible. Senior associates at mega firms who have rates above $800 / hour and who haven’t made partner have a great story to tell to their contacts if they go to a firm with lower and flexible rates. g., say a Cravath senior associate isn’t going to make partner and he moves to a firm where he could bill out at $400 / hour. That’s a great pitch to capture the clients who the Cravath-trained attorney did a great job on billion-dollar deals (and reposition their value to source the middle market work at a discount).
3. Referral Work. We see it all the time. Senior associates who leave their Am Law 200 firm to go to a non-competitor oftentimes receive referral work from their former colleagues. A lot of work gets turned away because either the client doesn’t want to pay the big rates for less complex work, or another way to say it, the firm prices itself out of the market. And there are always conflict reasons too. Either way, we see senior associates make this source of referral business a primary one to start their practice. My advice: stay in the good graces of your former colleagues. They will take care of you if you move to a firm seen as a non-competitor. If you move to a peer firm, you shouldn’t expect much in terms of referral work from you former colleagues.
4. Lower Threshold to Earn the “Partner” Title. Although titles aren’t everything, they are very important to generate business. It’s a chicken and the egg dilemma. At a major Am Law 100 firm, you shouldn’t just expect to make “partner” unless you’re in a good situation (such as hot practice area with few others in your class vying for the spot, succession planning, you brought in a big client or a major firm client really wants you on their work, your uncle is head of a sovereign wealth fund, and the like). It’s an uphill battle for “senior associates” at major Am Law firms to win business given their title. You have to explain away who else is supervising the work even though you’re likely the one who handling it. A title matters in the legal profession. It signals credibility, recognition, and ability.
5. You Have No Choice. This last reason isn’t a bad one. It’s just reality. If you want to build your own practice, the best way to achieve success is out performing your peers in the market and maintaining a solid reputation (and all at a good value). Say your firm no longer needs your services and you are asked to leave. The next step is to figure out where to go: in-house or another firm that values your contribution. Say you pitch yourself as a Cravath-trained attorney but now with a partner title and a LinkedIn bio that explains pedigree all at half the price from your former colleagues. Most of the Am Law 200 firms understand who they are and their position in the market. They look for talented senior associates with fire in the belly who have potential to bring in $500-750k in their first year or so and will make them partner.
My colleagues at Lateral Link are great at pinpointing opportunities and knowing where they exist for senior associates looking to make partner at firms under the Am Law 200. It’s actually a great feeling when you can build a practice, control your career, and leverage all your prior achievements and experience to maintain a stable and profitable practice. Feel free to reach out to one of my colleagues in your region to discuss strategy.
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