Collateral Damage

January 23, 2024

Reading time: 3 minutes

A stormy sky with a warning sign saying collateral damage.

The prospect of adding a new attorney to the mix is exciting – for your firm culture and potentially your bottom line.  While a prospective candidate might look great on paper and interview well, it is crucial to properly vet them to ensure their arrival does not prompt a legal malpractice claim or result in unintended financial losses for the firm. 

Lateral hiring, rather than bringing on new associates who require extensive training, can prove to be profitable and a great way to add the legal talent you need to serve your client base.  The days of an attorney staying at one firm for their entire career are long gone.  According to a recent Thomson Reuters report, nearly 25% of large law firm associates left their firms in 2021.  With so many attorneys now on the move, the applicant pool is full of potential candidates.  So, what are the risks?  The latest Ames & Gough 2022 survey showed that conflicts of interest continue to be the most significant cause of malpractice claims largely due to the inappropriate handling of lateral hires.  According to Eileen Garczynski, senior vice president and partner at Ames & Gough, “…[T]here are no shortcuts for addressing conflicts; firms should be proactive in their efforts to anticipate, avoid and manage potential conflicts, including implementing sound procedures for recruiting, interviewing, engaging, and training lateral hires; flagging any issues, and communicating effectively – both internally and with clients.” 

Hiring a lateral attorney can also result in increased costs to the firm if they do not stay as promised or deliver the business they anticipated bringing.  Nearly half of recently surveyed firms reported that their laterals underperform when it comes to bringing their stated book of business which ultimately results in yet another move and negative financial impact to the firm.  While lateral attorneys can be one way to grow your firm, hiring laterals is not without risk and, quite frankly, doesn’t always pan out like you may have hoped. 

So, how can your firm avoid the potential casualties of hiring lateral attorneys?  Consider these rules of engagement when flipping through resumes and scheduling interviews:

  • Conduct the necessary due diligence – Do not underestimate the value of fully vetting each applicant before offering them a position.  In the race to grab the seemingly best candidates, firms are failing to actually validate the candidate’s practice areas and professional relationships, especially as they relate to their purported book of business. Studies show that law firms are also less interested in a candidate’s personal background which may reveal certain professional conduct issues, questionable social media content, or even tax liens.  Checking a candidate’s social media accounts and looking for any personal or professional red flags should be part of your due diligence protocol.  Be sure to take the necessary time and steps to thoroughly research a potential candidate to fill the need at your firm, including evaluating any potential conflicts.
  • Strategize your needs – It is easy to get caught up in simply filling a position to satisfy your immediate needs, but it is important to consider your firm’s growth strategy, long-term plans, and the client-centered services you have committed to providing.  Keeping your firm’s goals in mind may help you easily pass on someone you are initially drawn to in favor of a candidate that fits in the bigger picture of the firm in the long run.
  • Consider the “it” factor – There is simply no substitute for the gut feeling you and your partners may have about a candidate.  Follow it!  Check yourself against each other’s feedback, but chances are, if the candidate has “it” and you are confident in your due diligence, you have likely found the lateral hire that best fits your firm culture and needs. 

With a proper hiring protocol in place, you will be well-equipped to hire the best lateral candidate for your firm – and avoid collateral damage.

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