Ask partners in management at the nation’s leading law firms about what worries them most these days, and you won’t hear them express fears of a market downturn; they’re not losing sleep wondering when the current boom might bust, nor fretting about their strengths in recession-friendly practices like bankruptcy and restructuring. The number one concern I hear from these firms is that they lack talented young junior partners capable of carrying on their legacies.
The future of any law firm depends on the youthfulness of its partnership, and recruiting young partners could be the best strategy for achieving a sustainable competitive advantage. As a recent Zeughauser Group report in The American Lawyer noted, in a field now crowded with competing service businesses, increasing market share is the surest way for law firms to achieve profitable growth. By extension, the surest way to increase market share is to bring on junior partners and empower them to prove themselves as rainmakers, practice-group chiefs, and firm leaders in their own rights.
I’m not suggesting dramatic turnabouts along the lines of HBO’s Succession, but—like the patriarch depicted in that series—senior partners at AmLaw 200 firms have afforded scant attention to who will succeed them. Even at the venerated Wachtell, Lipton, Rosen & Katz, profiled earlier this month by Bloomberg Law, the management vanguard (Ed Herlihy, 71, and Dan Neff, 65) seems like an old guard, having been behind the wheel for twelve years. According to a 2017 American Bar Association report, close to 65 percent of equity partners will likely retire within the next decade. So why aren’t firms doing more to recruit young blood?
Since the financial crisis hit in 2008, firms have been so consumed with regaining lost ground, succession planning has been a blind spot, but that’s only part of the answer. Many equity partners dislike the risks inherent in long-term investments. They’re also reluctant to cut profit distributions to cover the cash outlay
Here’s the good news: The market is packed with young candidates who have impeccable credentials, flourishing business contacts, and boundless potential. While these lawyers might not have the instant credibility of more traditional lateral partner hires, they are nimble and hungry for opportunities. Having survived the crash and matured amidst radical shifts in big law firm economics, they’ve also got grit and stamina. I suggest firms consider bringing them on as partners. Regardless of whether such partners have instant portable business, their chances of success will increase if they’re afforded wide latitude in recruiting, a generous client development budget, and a meaningful voice in the firm’s business strategy. Otherwise, how can they shape the firm’s future?
By investing in young lateral partners, firms can help bridge the gap between Boomers and Millennials. They stand to improve their responses to client expectations concerning technology-driven innovation,alternative fee arrangements, and across-the-board increases in diversity and inclusion. Along the way, they might also find the lawyers who will carry their firms forward.