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Resources Newsletter Archive Great Expectations: Lateral Integration (April 2010)

Great Expectations: Lateral Integration (April 2010)


 

Beyond The Billable Hour™


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Great Expectations: Lateral Integration

Issue 59

April, 2010
 
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It looked like a match made in heaven to Steve and the firm that brought him aboard as a lateral to grow its transactional practice. The firm was attracted by Steve's $2 million book of business, and the firm's deep and broad bench of talent across practice areas that could serve his clients made the appeal mutual. In order to bump his practice up to the next level, he needed the kind of prestige, visibility and reach that this firm could provide.

All went well initially. Steve found a well-located office, an experienced assistant and full IT support awaiting him on his first day. He spent his first few months transitioning clients and marketing his practice in ways he had done successfully before: chairing industry groups, speaking across the country and maintaining his high profile as the go-to attorney in his field.

So Steve was stunned when he tried to open a matter for the first new client he brought to the firm. No sooner did he get the paperwork going than he got a call from a member of the management committee informing him that this was not how the firm operated. The potential matter would have to be evaluated by the MC first, and he didn't mean conflicts checks. He meant that the matter would need to be valued above a threshold for the firm to agree to take it on.
Steve was dumbfounded.

First of all, his practice consisted of many small matters. He functioned as the de facto outside counsel to many clients that ran every decision past him before taking action. But in a fast-paced industry, waiting several days for the MC to decide was completely incompatible with the needs of his clients. Also, while many of these matters were relatively small, in aggregate they created the book that Steve had been courted to bring to the firm.

Steve met with the MC at his request, explaining the needs of his practice about which he thought there'd been a pre-nuptial understanding. Members of the MC agreed that they'd understood this before bringing him aboard. But according to their vision for his practice, now that Steve had newly expanded resources available to him, he would more aggressively market to the large corporate clients the firm preferred to serve.

A funny thing happened when Steve brought in the first matter that fit the MC's criteria: An older partner insisted on the origination credit because he had done corporate work for the client 10 years ago.

Not a Unique Story

Although the details vary, Steve's story is anything but unique.

The recruiting firm Major, Lindsey and Africa published two surveys of lateral partner satisfaction, one in 1996 and one 10 years later.1 The firm found significant improvement in satisfaction over the 10 years. However, it also found that considerable numbers of lateral partners were dissatisfied with their firms' integration efforts.
In particular, the average lateral partner responding to the survey was least satisfied with the support provided by the new firm to take his or her practice to the next level, the primary motivation for lateral moves. Similarly, The American Lawyer magazine's February 2009 Lateral Report found that lateral partner turnover varied widely from one firm to another during the first two years post-transition. In these days of legal industry readjustment, given estimates that a firm invests at least $600,000 in hiring one lateral partner, this is hardly chump change.2

There is no paucity of "best practices" in lateral partner integration available to interested firms. But the poor economy and downsizing of the industry have not left firms predisposed to invest in human resources budgets. Even in firms that follow best practices, including having one or more powerful partners who take ownership of the lateral's success (making introductions to firm clients, giving the lateral platforms for informing the current partnership about her or his practice, and creating opportunities for partners to socialize with their new potential collaborator), too much falls between the cracks.

Real integration requires much more than providing current firm partners and clients information about a lateral partner's practice skills and value proposition. As much as attorneys and firms might like to believe that this is a rational, cognitive process, it is far more determined by irrational and emotional factors. Bookstore shelves are now filled with volumes about how our business and political decisions are driven by our emotional reactions.

Despite the enthusiasm of partners invested in recruiting a lateral lawyer, there are always others who perceive their new colleague as an opportunity to lose far more than gain. After all, a lateral partner has just divorced his old firm and taken valuable assets with him. Who's to say that won't happen again?

These concerns have only become intensified during the economic slowdown. Partners worried about filling their own plates are even more reluctant to share their client contacts with someone they have no particular reason to trust.

As one lateral partner and rainmaker recently told me, "I keep on bringing in new matters and inviting other partners to work on these with me, but after six months I have yet to have another lawyer here ask me to work with a client of theirs."

Because I happened to know another partner at her firm whose practice had many potential synergies with that of this lateral, I asked if she'd had an opportunity to connect with him. As it turned out, neither partner was aware of the other's practice. Since I introduced them to one another, they have planned several joint client pitches together.

Did Anybody Hear Me?

The point is that firm leaders often make the mistake of believing that just because a message is sent, it is actually heard.

The arrival of a new lateral partner is typically heralded with much fanfare. Press releases are sent, marketing staff get busy creating buzz, and the new partner presents an overview of her practice at the firm's retreat.

Was everyone at the retreat, though? Was everyone there actually listening?

It's an informal rule of thumb in the corporate world that if you want employees to hear a message, particularly one involving change, then you must repeat it multiple times and across multiple channels. How many e-mail announcements does it take to ensure that people are informed? There will never be enough, since so many partners will not read past the third line.

Furthermore, people listen only to information they perceive to be relevant to them. Fundamentally, it is up to the lateral partner to help his partners understand the relevance of his practice to them, to assuage the concerns of cynical colleagues and learn the unspoken assumptions and rules of the firm, all while learning to open files, record time, send out invoices, operate the computer and the phone, and of course, make rain.

Planning and executing an internal marketing campaign is no small feat under the pressure of the great expectations of managers who have invested so much time and money to bring a lateral partner aboard. Research in psychology demonstrates that a person's efforts to prove herself can backfire.3 Heightened vigilance about others' perceptions can narrow focus, block creativity and impair problem-solving ability. Since we tend to perceive what we expect, it's easy to take others' negativity personally. Even worse, others can pick up on our efforts to manage impressions and feel manipulated.

Being oblivious or insensitive to the reactions of new colleagues is also unlikely to help the integration process. A coaching client of mine recently offered to introduce a new lateral partner at her firm to a client of hers. After the introductions, and unbeknownst to my client, the lateral opened the matter the three of them had discussed under his own name. My client was understandably furious. She's been at the firm for a long time and has a broad and strong network. She's not the only partner who won't be cross-selling his expertise.

Cognitive neuroscience and social psychology teach us that we cannot effectively communicate our message to anyone who doubts our honesty.4 Our brains have an internal security guard that snaps to attention immediately upon encountering any new person or situation. The job of this mental gatekeeper is to detect safety or danger, friend or foe. If a new lateral can't get past this gatekeeper, he'll have no chance of demonstrating to his partners the value of cross-selling him to their clients. There's also no faking our way past the gatekeeper: It is highly sensitive to inauthenticity.

Real Relationships Required

In order for a lateral partner to successfully become integrated into a firm, she needs to build real relationships, one person at a time.

Certainly, firm support makes a huge difference. Probably the most effective thing a firm can do is to have a compensation system that rewards partners for collaborating. A system that tracks efforts to cross-sell, bring a lateral onto matters and plan joint pitches, and which holds partners accountable is far more potent than simply touting the new lateral's rainmaking record.

But no firm can build relationships that create glue among strangers. A new lateral must treat every incumbent partner as she would a prospective client. Efforts to convince others of the value of our contributions tend to be thwarted by the other person's guardedness or lack of interest in taking us seriously. So, a new partner who leads with a sales pitch is unlikely to build an alliance. Self-advocacy tends to be ineffective until the lateral has really taken the time to get to know her partners.

A wise lateral partner will stand in his colleagues' shoes and look at things from their perspective. Perspective-taking is vital for enabling a new partner to develop the genuine respect and positive feelings for others that might otherwise be inhibited by distracting concerns about success.

Active listening is crucial. A lateral partner would do well to let his colleagues regale him with their war stories and to inquire about their families. Understanding the successes they have achieved and the concerns and goals that now preoccupy them will go a long way toward helping them take the risk of sharing information and opportunities. Developing a sincere appreciation for another's perspective and contributions helps clarify expectations, and puts you in a position to both influence and benefit from collaboration.

Certainly all of this takes time and a long time frame, which is difficult to maintain in the face of short-term scrutiny and great expectations. But thinking this way can make the difference between becoming happily integrated into the firm or needing to go back to the recruiter.

Obstacles Can Be Overcome

The process of integration is rarely smooth. I had the pleasure of successfully coaching a lateral partner who overcame what threatened to be an overwhelming obstacle.
Soon after starting at her new firm, she ran into the problem of client incompatibilities. Although both she and the firm had cleared all conflicts during the due diligence process, some had not risen to the surface. She found herself conflicted out of the majority of her business after coming on board.

A senior partner in her practice group insisted that an important client would protest the firm representing potential competitors. No work-around satisfied the senior attorney; he was not interested in any solution other than having the lateral partner relinquish her business.

After going through the difficult process of detaching from her old firm and entering a new one in order to leverage the latter's capabilities and expertise, she found herself unable to retain the clients she'd hoped to better serve. Instead, she essentially had to start from scratch to re-define herself in the market and build a new book of business. Perhaps the firm could have intervened, but this would have alienated an influential partner, a move that would likely not have facilitated this lateral's integration.
Recognizing that this senior lawyer felt threatened by her, she went to great lengths to try to build a collaborative relationship with him, but to no avail. His chilly reception combined with the need to relinquish much of her book of business could easily have sent her packing, but she was not to be deterred.

She took the initiative to develop the internal network she needed to get the information and support necessary for her success, one relationship at a time. She cemented her bonds with those key players who had brought her into the firm and reminded them of the need to reinforce the strategic case for her success, not only immediately after she came to the firm but repeatedly over time. The initial expectations of her productivity clearly had to be re-negotiated given the recently surfaced conflicts without her making apologies. The strong support of a very influential senior partner enabled her to shift firm expectations and redefine the criteria for her successful integration more realistically.

With this support, she began to demonstrate her value and earn trust. She wrote and began implementing a new business plan, consistent with the firm's strategic goals. Traveling from each office to the next, she spent time listening to her colleagues' business goals and understanding their strengths. She recognized that no amount of information about the value she could bring would substitute for her demonstrating her genuine interest in the firm.

Through repeated personal discussions she came to fully understand the interests resistant partners were protecting. She then collaborated with them to write articles and make firm pitches. She created opportunities for others with each new matter she brought to the firm. She went out of her way to make sure that management was well aware of the contributions of partners to her achievements, whether they referred work to her, pitched in to help her deliver service or to bring in a new client.
Only after earning their trust were her colleagues willing to introduce her to their clients. And only after she had built broad support did she begin to push hard for the resources and structural changes necessary for the firm to be a great platform for her practice.

Most fundamentally, she stopped relying on the firm to integrate her and integrated herself. Although the firm had much to gain from her success, she decided that no one would be more invested in it than she was.

The firm has indeed benefited from her achievements. Her practice has been extremely profitable for it, but she has added value in other ways. Having experienced the challenges she faced as a lateral partner, she has become a resource for all of the firm's women hoping to develop their own practices. Firm members were so taken with her business development success that they asked her to sit on several powerful firm committees.

If the measure of successful lateral integration is that other partners can't recall when the lateral was not part of the firm, then she has been enormously successful. In her particular case, the commitment of a few key players provided the lateral partner with enough support and sense of belonging to cultivate her determination and loyalty.
Ellen Ostrow is a psychologist, certified coach and founding principal of Lawyers Life Coach, a firm providing professional development, career and executive coaching to attorneys and consultation to legal employers.

Endnotes:
1. Lindsey, Jonathan, "Lateral Partner Satisfaction: A Decade of Perspective" (Major, Lindsey & Africa, 2007).
2. Hellerman, John, "'Lateral' Should Mean Up Not Sideways" (Law Practice Today, American Bar Association, 2008), available at: http://www.abanet.org/lpm/lpt/articles/mkt05083.shtml.
3. Dutton, Jane E. & Ragins, Belle R., "Exploring Positive Relationships at Work" (Lawrence Erlbaum, 2007).
4. Goleman, Daniel, "Social Intelligence: The New Science of Human Relationships" (Bantam, 2006); Rock, David, "Your Brain at Work" (HarperBusiness, 2009).


 

A version of this article was published in the New York Law Journal February 1, 2010.

Copyright 2011. All rights reserved. New York Law Journal Online.

© 1998-2012 Lawyers Life Coach, LLC.  All rights reserved.



 

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