The Third Option
Ask a law firm how it intends to grow. Unless it is in merger talks, you will generally get one of two answers. Put the rates up, or hire somebody else’s partners.
Lever one has been doing most of the work: worked rates rose 7.3 per cent last year. But clients are shifting work to cheaper firms, and the Thomson Reuters and Georgetown report on the legal market is direct about what follows. Pricing power is no longer conferred by reputation, and firms that cannot demonstrate value will compete on cost. Which is not the end of pricing. It is where the gap between putting a number up and pricing properly starts to show.
Lever two is lateral hiring, central to how most firms plan to grow. It works, by the profession’s own numbers, about as often as a coin toss. An analysis of 1,130 lateral partner hires across the hundred most profitable firms found that 47 per cent did not last five years. Add the ones who stay but simply muddle along, never producing a return, and the study’s author concluded that over half of all lateral partners disappoint. Henderson and Zorn found no statistically significant relationship, at most firms, between hiring more laterals and making more money.
Two levers, then. One that is getting harder to pull, and one that comes down to chance.
There is a third option, and it is the least discussed, because it involves acquiring nothing at all. Make the hire you have already made work.
Consider what that is worth, in money.
Take a firm hiring six lateral partners a year, each on a million pounds. Recruitment fees at £45,000 a head come to £270,000. The remuneration committed is £6m a year.
At the profession’s current success rate, three of those six will not deliver what the business case promised. So £135,000 of the fee spend has bought nothing. That is the figure firms notice, because it is the one that arrives on an invoice, and it is the one they negotiate hardest.
It is also the least of it. The £3m a year of remuneration going to partners who will not deliver, unlike the recruitment fees, recurs for as long as each of them stays. The research says a lateral takes two to three years merely to cover what was spent on them. The ones who leave early never get there at all.
Neither figure includes what the hire cost in partner and support time. The interviews, the business plan reviews, the conflicts checks, the management discussions, the introductions that went nowhere. Potentially tens of thousands per hire, invisible because nobody bills it.
Now suppose better integration lifts the success rate by ten points, from one in two to three in five. Even that modest a shift means one in every five hires that would have disappointed succeeds instead. Across a five year programme, thirty partners, it is three more working out: three partners on a million each, doing what they were hired to do rather than not.
The firm has hired no additional partners, paid no additional fees, and asked no client for anything.
Boris Groysberg, the Harvard Business School professor who spent nine years studying what happens when star performers change firms, concluded that integration has to be deliberate and fast, and that casual or ad hoc efforts do not work. Which is worth restating plainly. A failure rate of one in two is not really a fact about lateral partners. It is a fact about firms.
The first two levers are about acquiring more. The third is about not squandering what is already yours. It is unglamorous, it produces no announcement, and it is the only one of the three entirely within the firm’s own control.
Sources: Thomson Reuters Institute and Georgetown Law, 2026 Report on the State of the US Legal Market; ALM Rival Edge lateral hiring study, reported by Hugh Simons in The American Lawyer and summarised in the ABA Journal; Henderson and Zorn, The American Lawyer; Boris Groysberg, Chasing Stars.
Metis Advisory works with law firms on lateral partner hiring and integration. If this is a conversation your firm is having, start one here.