Are Law Firms "Buying Money"?
An Unsustainable Practice of Hiring Lateral Partners for Revenue
By Rob Green
In recent years, a troubling trend has emerged in the legal industry: law firms are increasingly focused on hiring lateral partners solely for their client base and guaranteed revenues.
This practice, often referred to as "buying books of business," has become a dominant strategy for many firms looking to boost their bottom line quickly.
However, this short-sighted approach is fraught with risks and potential pitfalls that can harm not only the firms themselves but also the lateral partners they hire and the legal profession as a whole.
This article will explore six key reasons why the obsession with hiring lateral partners based primarily on their existing client relationships and revenue potential is detrimental and unsustainable.
We'll examine how this practice affects firm culture, long-term growth, client relationships, and the overall health of the legal industry.
1. Erosion of Firm Culture and Cohesion
One of the most significant drawbacks of prioritising revenue-driven lateral hires is the potential destruction of a firm's carefully cultivated culture.
Law firms often pride themselves on their unique ethos, values, and working environments.
However, when partners are brought in solely for their client books, with little regard for their cultural fit, the firm's identity can quickly become diluted or fractured.
These lateral hires may have vastly different working styles, ethical standards, or approaches to client service that clash with the existing firm culture.
This dissonance can lead to internal conflicts, decreased morale among long-standing employees, and a breakdown in teamwork and collaboration.
Moreover, when existing associates and partners see that the path to success is simply bringing in business rather than embodying the firm's values or excelling in legal practice, it can create a mercenary atmosphere that prioritises short-term gains over long-term stability and growth.
2. Neglect of Talent Development and Succession Planning
The fixation on lateral hiring often comes at the expense of nurturing and developing in-house talent.
When firms constantly look outside for "ready-made" partners with established client bases, they send a discouraging message to their associates and junior partners: that their path to partnership is blocked unless they too can miraculously produce a substantial book of business.
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