Let’s Talk

By Andrew Maloney

As law firms aggressively recruit laterals into 2025, don’t be surprised tosee more hiring misfires, too.

Law firms are committed to a “growth mindset” for the foreseeable future, and they’ll likely make more internal promotions as well as more lateral hires because of it, industry consultants and analysts say. “That said, not all these lateral hires will work out,” say the authors of the 2025 Citi Hildebrandt Client Advisory.

A portion of Big Law laterals aren't successful in any given year, to be sure. But those hiring fails may rise even higher in 2025 amid an aggressive hiring market, several analysts say, just as there were hiring mismatches during the 2021 demand surge and related hiring fallout.

Phil Flora, director of sales at Leopard Solutions, tracks industry hiring.He said job openings and moves are on the way up and expected to continue "across the board" in 2025. "So with the rise in hiring, I would imagine there will be [an] increase in failed hires, so firms will rush to hire attorneys to fill holes and perhaps not do their proper due diligence on the hiring or properly integrate the hires," Flora said in an email Monday.

Success Rates

Flora said Leopard considers a failed lateral hire to be one in which the lawyer moved on quickly after he or she was added to the firm.According to data from Leopard, about 6% of partners hired by Am Law200 firms over the last two years had already moved on.

According to the client advisory survey of firm leaders this year, the percentage of lateral hires deemed “successful” or “very successful”over the last five years inched downward relative to last year, from 64%to 63%, and the proportion of those deemed “break-even” or“unsuccessful” went up from 33% to 35%. A fifth category, “What were we thinking?”, came in at 2%.

Those aren’t huge changes, of course. And the 63% "successful" lateral figure is the same as it was in a 2019 survey, when the authors noted it was “the highest figure since Citi began surveying firms on this issue.”The figure went down to 61% in 2021 before climbing again.

Some industry sources said it can be tricky to get firms’ honest assessment about lateral success, and in certain contexts at least, the success rate can be lower. But regardless, as the industry ventures further into a “new frontier” in recruiting, some fall-off is expected.

“As partner compensation guarantees have jumped to higher levels, achieving a return on investment has become less likely. Client relationships are not always as portable as lateral candidates might think,” wrote the authors of the 2025 client advisory, published last week.“We believe there is a high likelihood of an uptick in the number of recently hired lateral equity partner departures from firms in the next couple of years.”

Brad Hildebrandt, one of the authors of the report and founder of Hildebrandt Consulting, said in general, firms are doing better due diligence on their hires than before, and the long-term trend is that lateral success has gone up. But it still trails the success rate for internal partner promotions, which clocked in at 74% this year. Hildebrandt said he didn’t think lateral success was necessarily poised to increase.

“Because like any business, you’re taking a risk. Some of these moves have very high-level people with very strong personalities, and they don’t always fit,” he said.

What Is Lateral Success?

Gretta Rusanow, head of advisory services for Citi’s Global Wealth atWork Law Firm Group and another author of the client advisory report, noted that for purposes of the survey, firms’ definition of success is up to them. Some firms might think in terms of revenue exceeding expenses, but that can also be a shorter-term definition, she noted. A partner might be bringing in new clients and their business may become accretive over a longer time, for instance. “So that’s why we sort of make it all about the firm and how do they measure success,” she said in an interview last week.

Some firm leaders think in terms of retention rates, while others have noted that laterals from government or certain practice leaders may be brought on not just to generate revenue, but for other intangibles: to create momentum in a practice or potentially entice other laterals.

Jon Lindsey, founding partner of recruiting firm Major, Lindsey & Africa, also noted the myriad definitions of “success” in this context. But he said even just looking at revenue, some firms use a kind of portfolio approach, in which they look at (among other things) the total revenue generated by new partners over some time period relative to what had been projected for those laterals when they joined.

Like an investor, it involves looking at the value of the overall strategy rather than each individual move. “It’s easy to say, ‘So-and-so was a bust. That’s unfortunate.’ But clients come and go, things happen. And ‘how is your lateral hiring doing?’ is a very different question from ‘how did any individual lateral hire do?’ Lindsey said.