with John Jameson, the Jameson Group
When growing your firm through lateral hires, prepare a due-diligence questionnaire for the recruitment process. This Lateral Partner Questionnaire (LPQ) identifies all the main issues that you want to address with the candidates. Here are some of the sections an LPQ should include:
- General information: This is where the candidates will share resume information, including personal info, education, job history, and professional associations.
- Practice: Here, ask the candidates to briefly describe their practices. If they’re litigators, specifically what kind of work they do? If they’re trial lawyers, what type of experience do they have, and what kinds of cases have they tried? They should give a more detailed description of their work but still keep it brief.
- Business data: At this point, you start to get into the nitty-gritty of what the firm needs to be looking at when it’s considering a potential lateral hire. The most important information for the purpose of the LPQ tends to be the financial data—billings, collections, and hours over the past three years. Ask for a three-year history of what the candidates have done—what they have produced and what they have generated.
- Projections: You also want to ask for a one-year projection of what business the candidates will bring with them and the business that they’ll generate. What do they think they will produce in the first year? Ask for both their minimum projection and their most optimistic projection. For the minimum projection, they could just say zero, but we’re talking realistically—looking at the clients the candidates have, their relationships, and the history of matters they’re dealing with, what do they believe is the minimum amount of business that they will be able to bring to the firm over the next year? What do they think is going to happen assuming everything stays essentially status quo? For the optimistic projection, ask them to look again at where their relationships are, what kinds of matters they’re dealing with, and the strengths of the new firm, and estimate their best scenario going forth with the new firm.
Tip: Very often, lateral hires do not generate as much business as they think they will. You have to give them sufficient time to reach their projections, and there are always transition costs, etc. A lot of major firms take candidates’ minimum projected scenarios and subtract 25 percent and take that into account when making their hiring decisions.
- Billing rates: What are the candidates’ starting billing rates, what are their effective billing rates, and what kind of collections history do they have? Ask for a three-year history on hours billed as well as nonbillable work.
- Compensation: When asked about desired compensation, most candidates are smart enough to say, “I want to fit into the firm’s system,” so you don’t get a lot of benefit out of asking what a candidate’s looking for. But historical information is certainly helpful, so ask for three years of compensation information, both base and bonuses in total.
For a sample LBQ, email John Jameson at email@example.com.
For more tips, check out our marketing seminar “Growth Through Lateral Partners.”