I’ve been in recruiting now for a year. As of one year, I have made no cold calls (so if you want my help, you will have to contact me). I have placed lawyers only in firms I admire. As a result, I have passed several opportunities to make placements.

I was recently asked: What is my “sweet spot” for lawyer placements?

It is not the lawyer already generating millions in business unless I coached that lawyer when he or she was a young partner or associate.

I like working with the highly motivated young lawyers who in the right setting are capable of generating more business and feeling more fulfilled in their careers.

When I was coaching lawyers I worked with dozens of senior associates and junior partners in large law firms who now have some clients but could take control of their future and develop much more business in a more entrepreneurial law firm.

 

Over the last year, several of the young law firm partners who sought my help told me they did not feel they were being fairly compensated.

Some time ago while working out I was listening to Daniel Pink’s book Drive. One of the parts I listened to was a discussion of fair compensation both internally and externally.

It’s funny, I never thought about whether I was fairly compensated until I learned what my partners were being paid and when other firms offered me substantially more money to join their firm. They say that ignorance is bliss and that was surely true for me.

Even if your law firm strives to keep it secret, you will learn what your colleagues are making. One way or another you will also figure out what lawyers are making in other firms.

With that knowledge, you will then evaluate whether you are being fairly compensated.

In 2003, the year before I left my law firm, two huge international law firms made offers to me that were more than $200,000 than I was making at the time. You might ask why didn’t I join either of those firms. While the money was great, I believed I would be giving up control of my destiny.

In my year of recruiting, I have never placed a lawyer in a firm where I believed the lawyer would be giving up control of his or her destiny. If all you are looking for is the firm that will pay you the most money, don’t call on me. I don’t want to place any lawyer in a firm they will likely leave just a few years later.

Here are some things you might want to know about a firm you are considering:

  • Does the law firm adjust compensation every year?  If your potential firm adjusts compensation every year, you and several of your new partners will find a reason to feel they are not fairly compensated.
  • Does the law firm you are considering have significant intervals between the levels of partner compensation? If your potential firm’s intervals are as low as $5000-$10,000, you and your new partners might easily get upset about a colleague making $5000 more than you. It is harder to be upset when the difference is $50,000
  • Do you understand the criteria your potential firm is to establish compensation?
  • Is your compensation competitive with other firms that would like to have you?
  • Does your potential firm adequately compensate its junior partners? If not, you will have a problem finding lawyers to help you.).

Do you feel you are fairly compensated in your present law firm? Do you feel like you have the maximum opportunity to choose your destiny, take control of your future, and achieve what motivates you in your career?

Now that I am helping partners select the right firm for them I thought back on how I had selected my last firm.

It was 1996, I had generated $1 Million in business that year (at the time that was considered a significant amount). I knew if I was with the right firm, I could add to that number and serve my clients better. I had just begun working for a client that was submitting a proposal to construct and install the E-ZPass toll collection system in New Jersey and some surrounding states.

When he found out I was considering changing firms, a managing partner of a fairly large firm in the city where I went to law school reached out to me. We had several discussions, during which I learned the firm compensated partners based on tiers. The managing partner said I would be placed in the second tier of compensation.

When he shared with me which lawyers in the firm were in the first and second tiers, I discovered I would be earning more money than any of my law school classmates who had spent their entire career with the firm. I decided, right or wrong, I would likely have a target on my back and some of my former law school classmates would resent an interloper making more money than them.

I moved to Dallas because my clients were working on projects throughout the United States and DFW airport had many non-stop flights a day to those cities. I did research on the large law firms.

 

I knew that the two largest Texas firms would not likely be interested in a construction law practice, even though the size and complexity of the legal work on the large highway construction projects were rapidly changing. Some large Texas firms had what they perceived to be construction law practices, but no one particular lawyer was totally focused on construction.

I made a list of what was important to me:

  1. The firm should be growing not declining
  2. The firm needed to have a platform to give me the opportunity to expand the work I was doing for construction contractors
  3. The firm should be entrepreneurial rather than focused on “institutional” clients
  4. The firm should be collegial and might even have a “no jerks (I used a different word at the time) policy”

I started talking to firms in Dallas. When I met with the chairman of Jenkens & Gilchrist, I didn’t need to go any further. David gave me an assignment. He said:

Cordell, pretend like resources are not an issue. I want you to prepare a business plan for me that will triple your book of business in three years.

I prepared the plan, and still have a copy. And, yes, I tripled my book of business in three years. I’m not sure that would have happened had I not been asked to prepare the plan.

I also met Mr. Gilchrist. He was a special man. As written in his obituary, Mr. Gilchrist was a true Texas gentleman. At a later point when Mr. Gilchrist and I were talking about firm values, he showed me something he had written many years before about the importance of Jenkens & Gilchrist lawyers focusing on their families.

P.S. A year after I joined Jenkens & Gilchrist, in January of 1998, the firm was on the front page of the National Law Journal. I believe the headline was something like: Fastest Growing Firm in the US. I was interviewed and asked why I joined the firm. I found my reply in the article below:

The January 1998 National Law Journal article on Jenkens noted the firm’s rapid addition of practice groups from different firms as the basis for its growth, saying that Laney “inspired these lawyers to dream Texas-size dreams.”

As many of you know, the growth that occurred later, specifically adding the Chicago office, led to the demise of the firm. See: Taxes and Death: The Rise and Demise of an American Law Firm.

Did I choose the right firm? Yes and no.

I believe it was the perfect fit for me to expand relationships with existing clients and provide help in other practice areas. The firm had the platform, and resources weren’t an issue for me. I enjoyed being a part of a firm that was growing.

But, our firm grew in a way that caused its demise. I had opportunites to leave and join two firms that were among the largest in the world. I turned them down and started my coaching work. I suspect that had the firm not acquired the tax practice in Chicago I might still be practicing law in the Dallas Fountain Place office.

 

Ok, I have to confess, here in Dallas we are still distraught over being one pitch away two times from winning the first World Series in franchise history. I couldn’t sleep after game 6 and I couldn’t watch game 7. But, our disappointment cannot be close to the the disappointment the Red Sox fans must be experiencing.

If you are not a baseball fan, you may not know the story. The 2011 Boston Red Sox entered September with a 9 game lead and were thought to be a “sure thing” for the American League playoffs. Then the Red Sox managed to lose 18 of their last 24 games and were eliminated from the playoffs the last game of the season.

In a Harvard Business School article titled: Chasing Stars: Why the Mighty Red Sox Struck Out, Carmen Nobel refers to the Red Sox demise as: “one of the biggest flameouts in baseball history.” The Red Sox had gone out and acquired superstar players from other teams and had the third highest payroll in the league. According to Nobel: “Fans and observers hailed the 2011 Red Sox as potentially one of the greatest teams of all time.”

Isn’t this what frequently happens when law firms go out and acquire lateral partners? My firm grew dramatically by luring lateral partners from other firms. I was a lateral partner. When I was asked, I purposely underestimated the revenue I thought I would generate. At the end of my first year, I exceeded the estimate by $750,000. During the time I was with the firm, I don’t remember many other  lateral partners who exceeded what they represented they would generate.

In the Harvard Business School article, Nobel references Chasing Stars: The Myth of Talent and the Portability of Performance by Harvard professor Boris Groysberg, who with colleagues studied the issue in a variety of competitive businesses. They found:

After examining the careers of more than 1,000 Wall Street analysts, for instance, they found that analysts who were star performers at any given investment bank tended to underperform after being lured to a new bank—foundering not only at the start of the new job, but for years afterward.

I can’t speak for lateral partners in other firms. I can only speak to what I observed in my old firm. Almost every lateral partner underperformed. It might be worth reading Groysberg’s book to get a sense of why that happened.

I appreciate the great interest in the blogs I posted earlier this week 20 Things I Wish Someone Had Told Me When I Was a First Year Lawyer and 15 Additional Things I Wish Someone Had Told Me When I Was a First Year Lawyer. I believe more lawyers read that post than any I have done this year. Jeff, a lawyer I coach, sent me an email saying I should have included staying healthy because our career is a marathon not a sprint. He is right. What do you think I should have added?

A few months ago I read Head Count Drops at Texas Firms. It seems that overall head count at 25 of the 26 largest firms in Texas declined by 5.7 percent in 2009.

Head count is down in firms throughout the United States. It should be no secret that in the down economy it is more important than ever to have a book of business. When you do, you are in high demand and when you don’t, you may be part of the next lay-off at your firm. 

The Wall Street Journal Law Blog recently posted Easy Come, Easy Go: Why the Lateral Market for Partners is Booming that the market for lateral partners is the most robust in 22 years. Clearly it is only robust for lateral partners who have business to bring with them.

If you are an associate, do you need any more incentive than this to start developing your own book of business? It’s your future. It’s your family’s security. 

Most of you who read my blog will never have me coaching you on how to develop business. Even so, if you want to learn from me, you can get a lot of information here. I have a Facebook coaching page where you can be plugged in to things I suggest you read. I have many, many podcasts on iTunes where you can listen to things ranging from how to develop your plan for 2010 to what inside counsel want from their lawyers. Finally, I have posted videos on You Tube I believe you will find helpful. Here is a post that lists "tools for your client development toolkit." Do not wait to learn about developing business. Start now even if you are a first year lawyer.