Tuesday, July 8, 2014

The Early Warning Signs of a Rainmaker

In a word, Aaron was gawky. Not in a bad way. Just in a way that said ‘work in progress.’ A slim, be speckled, quiet and shy person, he didn’t make much of an impression in a room full of sharp elbowed, ivy league associates. My first impression, and the impression most of us had of him, was that he was a really nice guy. Probably smart as a whip too, but quiet and unassuming. Aaron had the promise of being a really fine ‘service partner’. But he would never be a rainmaker.

Or would he?

Law firms today struggle to identify the associates who have the potential to be big business generators. With strained resources and tightened partnership entrance requirements, firms are becoming more selective in their associate training investments. Often late in the associate's careers, senior associates with ‘promise’ are shuttled into training programs in the hopes that they can be taught to develop business. And, too often, that training doesn’t work.

One reason may be in how law firms define a ‘promising associate.’ The traditional view is that a lawyer’s promise as a potential rainmaker can be found in the quality of their work, their productivity, how well they work with others in the group, their firm citizenship and their client service abilities. All of these traits are critically important qualities of an exceptional lawyer. But they take time to assess and, frankly, they are lousy predictors of whether a lawyer will turn into a top business generator. The question becomes, ‘are there ways to predict business generation success early in a lawyer’s career’?  

A better early warning system

The earlier firms can identify talent for business development, the more time they have to cultivate that talent. Business development skills take time to develop the same way lawyering skills take time to develop. Neither comes overnight. Firms need a better early warning system to identify attorneys with the characteristics and inherent abilities to generate work. Interestingly, we can look to professional sports for answers in how to do this.

For a long time, recruiters in professional sports evaluated draft picks based exclusively on their statistics- or, the athlete’s historic physical performance. Size, quickness, field goals, defensive play and similar measures were the best predictors of athletes capable of playing in the ‘big leagues’. But these characteristics weren't always the most accurate predictors. Some did well in college but failed in the Pro’s. Others were moderately good in college and became superstars in the Pro’s. There was another level of analysis that was needed. Frustrated with the hit and miss nature of their selections, some recruiters began to look beyond the physical qualities and more at the psychological qualities of the athletes. And what they found was that ‘heart’ was a much better predictor of an athlete’s success in the big leagues than was their physical characteristics.

The qualities that comprise an athlete’s ‘heart’ or grit are surprisingly applicable to the legal industry. In looking for those diamonds in the rough, there are several characteristics which can be observed in associates over a short period of time and early on in their career that are strong predictors of future success in business development and in the firm. These qualities are selflessness; desire to succeed; willingness to persevere; receptivity to being coached; and dedication to their practice.  

Time and again, I’ve seen associates like Aaron grow into highly productive rainmakers not on the talent of their legal abilities (although that can’t be lacking) but on the magnetism of their personalities and the drive in their character. They have a reserved confidence and respectful determination that propels their success. They are very often not the best or brightest in their class but they almost always are the ones that work the hardest. They are optimistic and selfless givers and never seem to give up. You can see signs throughout their past of how they’ve overcome obstacles, persevered where others might not and reinvented themselves to accomplish their goals. They are inspiring individuals and people naturally gravitate toward them.

So, if you want an early warning system to find the top talent in your firm I suggest you look for good lawyers in your firm with grit, heart and perseverance. Look for the ones who are ‘Aarons.’ Those will be your future rainmakers.



Monday, July 7, 2014

Laterals That Leave Teams May Have Lower Success Rates

Sergio Martinez* was an exceptional international tax practitioner. He was not only a brilliant lawyer, but he had developed a personal following and book of regular business that totaled several million dollars and stretched to the far corners of the United States and Latin America. His clients were some of the wealthiest people in the world and they loved and trusted Sergio. But Sergio wanted to leave his current law firm.
Sergio and his team had become disgruntled with their firm’s leadership. Among other issues, the firm had set upon a new strategic direction which didn’t include a tax practice. Sergio wanted a better, more sustainable platform for him and his team of three attorneys, two paralegals, two associates and one secretary. They weren’t being kicked out. But Sergio saw the writing on the wall.
Sergio met partners from the new firm quite by accident. But it became quickly evident that the combination would be a marriage made in heaven. A flurry of interviews, negotiations, due diligence and plans ensued. Everyone involved on both sides of the transaction wanted Sergio and his team to make the move.  
Except one.
Sergio explained it to me this way. ‘The man I have admired my whole career, the man who taught me the most important aspects of this business, feels he is too old to make the move. He will retire in two years and thinks he would lose his clients if he made the move now. The rest of the team wants to move. But I cannot make the move without him.’ The older attorney was Sergio’s mentor. And he couldn’t leave without him any more than a mother could flee a burning house without her child. The whole team stood to make a lot more money. Loyalty to one man didn’t seem to fully explain missing this opportunity for the group. I couldn’t help wonder whether something more was going on here.
After several discussions with Sergio to explore every possible angle that might change his mind, I came to the conclusion that Sergio intuitively recognized something that few others had: the value of his team was not just in their collective clients but it was in each other. They were better together as a team than they were split apart. Even the loss of just one team member would cause irreparable damage to the group. And so keeping the team together was of utmost importance. The deal would have to wait for two years until the mentor retired.
Sergio was smart. Intuitively he understood that the team was more valuable than any one of its parts, including himself. That’s counterintuitive in a world that believes rainmakers need only their rolodex and files to be successful at any address.
The fact is the team often contributes more to the success of an individual than the individual’s own knowledge and capabilities contribute. It turns out there’s evidence to suggest the presence of the team may as much as double that individual’s chance of success in  a new platform – a lesson that law firms negotiating the volatile lateral partner recruiting market may want to pay particularly close attention to.
Research studying cardiac surgery performed by the same doctor at multiple hospitals showed that the familiarity with a team was the single highest determinant that avoided deaths during surgery. The doctors were equally knowledgeable in how to operate on a heart. It was only their familiarity with the nurses and staff that made the difference that reduced deaths during surgery. And research into the portability of investment manager’s knowledge and investing success also showed a direct correlation with the familiarity with their peers and support people in how well they duplicated the success in a new firm. Similar to rainmakers in the legal industry, the investment advisors brought their clients, knowledge and skills over to a new firm but only maintained the same success rate as they had in their previous firm when they ported over the previous firm’s team as well.
Law firms have aggressively moved to increase the ratio of secretaries-to-attorneys in order to reduce costs. And they have aggressively managed work flow to reduce idle time that was inevitable when paralegals and associates were assigned to a single partner. But this trend may erode the effectiveness of these teams and it surely constrains a lateral’s ability to duplicate his or her success in a new firm when they are unable to bring their secretaries, paralegals and associate’s with them.
It makes sense. By reducing the disruption to a client by taking the familiar resources and institutional knowledge with them to the new firm, the likelihood a client would move its work increases. Faced with training a new attorney but keeping a familiar team versus keeping an attorney and retraining a team, clients are more likely to choose the easier path and substitute the attorney with one from the incumbent firm. It may not be the position the lateral intended to put their client in. But that’s the choice forced upon clients when the team is left behind. If that lateral doesn’t have valuable institutional knowledge of the client, isn’t doing strategically important work for that client, or lacks a deep personal relationship with the client, the decision to move becomes much more difficult for the client. And many choose the lesser of the two evils and simply stay put.  

*The story of Sergio is fictitious. Any resemblance to actual people or situations is purely coincidental.