Changing jobs is quite a bit more complex for lawyers than for other professionals. Besides all the usual challenges of onboarding and adapting to a new company culture, lawyers also have to navigate a variety of professional obligations to their clients and firms. It’s a situation that can often lead to stress, conflict and litigation.

Bringing a new attorney into your firm as a lateral hire comes with a number of risks for the firm, as well, from a high rate of failure to potential malpractice claims. Here’s what to know about avoiding lateral hire risks and setting new hires and your firm up for the best chance of success.

Challenges Faced by Firms Hiring a Lateral

The failure rate for lateral attorneys is surprisingly high — lateral hires fail in as many as 50% of cases.1 Part of the challenge of successfully integrating a lateral attorney into a firm comes from the fact that lateral hires come to a new firm already molded with prior professional and personal experiences.

Firms will hire laterals for their experience, as well as for their clients or specialization in a specific area of practice. However, the lateral’s experience may also clash with the culture of the new firm. Difficulties working with support staff or other colleagues can occur. Even differences in the amount of staffing available at the attorney’s prior and new firm could be a cause for problems.

Many firms, therefore, discover that it is often more difficult to unlearn something than to learn it the first time. For their part, attorneys can find it incredibly challenging to join a new firm and successfully assimilate into its culture. Every firm has a different management style. Established partners have a certain way of working together, after often having worked together for years. Lateral hires could be too aggressive, or not aggressive enough for their new firm and may also have difficulty repeating past successes in a new environment.

Early Warning Signs Your Firm May Miss

The discretion required before a lateral hire can also add to the challenges and risks for a firm. Hiring a lateral could often be described as a clandestine endeavor. Potential lateral hires require that their current firm not be alerted prematurely. Thinking of the potential upside of a new book of business, law firms keep negotiations confidential, resulting in a lack of insight into the lateral candidate from their management, staff and clients.

The secrecy involved in hiring lateral attorneys leads many firms to miss what would otherwise be clear red flags. In fact, as many as 33% of lateral hires join new firms with red flags missed by hiring committees, including:

  • Overstated books of business
  • Questionable legal skills
  • Exaggerated credentials
  • Conflicts and outside business interests
  • Past unethical behavior
  • Unknown malpractice claims
  • Significant tax liens and bankruptcies

Minimizing Lateral Hire Risks for Your Firm

Strategies for avoiding some of the more serious ramifications of a lateral hire often come down to asking the right questions. One key area to consider is the economics involved in a particular lateral hire. Consider asking:

  • What is the new attorney’s realistic long-term growth?
  • What happens if they end up with only one client following them?
  • Will their actions negatively impact the firm’s reputation?
  • What are the chances we experience a claim as a result of the lateral?

Before a Hire

When it comes your firm’s risks, the chance of an insurance claim bears special consideration. That’s because the percentage of firms that experience a claim stemming from a lateral is 35%.2 According to Swiss Re, a leading legal malpractice insurer and trusted carrier partner of Lockton Affinity Lawyer, one of the leading causes legal malpractice claims are conflict of interest claims.

A conflict check before hiring can let you weigh the pros and cons of a particular lateral attorney before you make the move, comparing the advantages of the new hire with the cost of potentially being conflicted out of a case. The right questions are important at this stage, too. Proceed with caution when interviewing a lateral who:

  • Has an unusual business plan.
  • Guarantees fast growth.
  • Promises clients will follow them.
  • Minimizes potential conflict issues.
  • Disparages a former firm or colleagues.
  • Avoids responsibility for their actions.
  • Has made more than one lateral move.
  • Is involved in a current malpractice claim.
  • Has a background check reflecting:
    • Bad credit
    • Driver’s license issues
    • Foreclosure issues
    • Criminal history

After a Hire

Malpractice claims can also arise after a lateral has joined your firm. Watch for warning signs, such as a lateral who:

  • Overbills clients on case matters.
  • Consults with one or two lawyers in your firm.
  • Relies on legal strategies that are overly risky.
  • Gets upset if their ideas are not used.
  • Behaves in an unprofessional manner toward others.

Spotting issues quickly and attempting to remedy them after a lateral has been hired is key to making sure that the lateral is ultimately successful in your firm.

Next Steps

Identifying any warning signs in the hiring process is the first step in ensuring that your new lateral hire is a good fit for your firm. Once you do hire the attorney, be prepared to step in if any issues arise. Be sure to acquaint your new hire with your staff, assign a mentor within the firm to provide support, set up their office with items they will need, train them on your firm’s procedures, and closely monitor their work and billings.

If any issues arise, address them early and professionally, and provide constructive feedback.  Taking these steps will help minimize lateral hire failures and avoid risk to your firm.  Remember that big changes can take time for all involved to adjust and continue to work through any issues, as appropriate.

More Protection for Firms

Lastly, remember that even with a great lateral addition to your firm, there is always the possibility you could face a claim. Claims are more common than many lawyers think, and can occur through no fault of your own, your colleagues or a new lateral hire. The right insurance protection is crucial for protecting your firm from these risks.

Lockton Affinity Lawyer is a trusted name in insurance for legal professionals and their firms, offering a consultative approach, competitive rates, convenient services, CLE credits and more. Visit us online to learn more and find out what we can do for your firm.

 

  1. According to a 2021 survey by Decipher Investigative Intelligence and ALM Intelligence.
  2. According to Decipher Investigative Intelligence.