Rainmakers Consider Lateral Moves in ‘Flight to Quality’
Rainmaking partners who lose confidence in their law firms are evaluating whether to jump to better locales in a “flight to quality.”
Increased compensation isn’t the only consideration for these partners, writes Dan Binstock, managing director of the Washington, D.C., office of BCG Attorney Search, in an article for Legal Times.
“I’m hearing many more partners asking questions about a firm’s stability, its overall business model and its ability to weather the storm,” Binstock says. “One or two years ago, the idea of making 20 percent more income (at a firm with comparable billing rates and a comparable platform) was often enough to justify a lateral move. Today, many partners are much more reluctant to jump ship for what might be only a short-term spike in compensation.”
Partners scrutinizing the financial health of their own law firms are paying particular attention to unproductive partners. The sentiment has been expressed this way, Binstock writes: “We need to stop carrying all this dead weight, or we’ll all be dead weight.”
More than 2,500 partners at large law firms jumped to new firms last year, a record number, according to survey results by American Lawyer. One reason for the uptick, the story says, is that many lawyers are looking for more money or more financially stable firms. Another reason is that many partners are being forced to leave.
Binstock’s article lists factors that partners considering a move to a new firm need to consider. They include: debt levels, dropped or delayed partner draws, loss of key partners, client base and client ability to pay, historical revenues, rate structure, the presence of countercyclical practices, flexibility and a viable strategy.
