Lateral hiring: LPQ and alleged book of business

Chapter 2 of the book focuses on the theme of “Collaboration helps the firm recruit, retain, and grow the right people.”  It focuses on analyses of collaboration’s effects on the following 5 areas:

  1. Integrating laterally hired experienced talent and making them more productive
  2. Developing robust client succession and coverage plans
  3. Attracting and retaining Millennials
  4. Keeping your talent motivated and engaged while they’re with you
  5. Maintaining departed employees as “friends of the firm” after they leave

I’ll be reaching out to this Board frequently in the coming week or so about each of the above!

For now, I’m focused on this sub-section of the laterals piece:  “Another type of failure [besides outright losing the lateral because of poor integration – this point was just covered] is bad assessment of, and an overemphasis on, a candidate’s existing book of business.  Many firms use a ‘lateral partner questionnaire,’ or LPQ, to gauge the size and value of such a portfolio—and most of them know that they have to discount that book by some percentage.  The problem is, what percentage?”

Here are my couple questions to you:

  • Is the LPQ common in sectors outside legal? That’s where I’ve encountered it most.  What’s your experience – either as a recruit or a hiring partner?  If you have examples to share (in COMPLETE confidence – I want to compare across them but wouldn’t cite ANY sources), please email me directly.
  • Any ballpark estimates of how much to discount the allegedly “portable book of business”? I’d love to include a range of estimates.

PS – if you’re worried about me only working on Chapter 2 at this point, rest easy (sort of): I’m now circling back to chapters where I either have new findings or want to beef them up.  I still aim to make my deadline on Jan 1st, 2016.  With your help, that’ll be possible!!

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2 thoughts on “Lateral hiring: LPQ and alleged book of business

  1. Hi Heidi,

    I can’t give you an informed view of the two questions you pose below. I would make one observation. Where does the client feature in any of this process? It seems to me a distant third after the the interests of the Firm and then the lateral partner have been taken care of. I don’t know what due diligence firms do in speaking with the clients who seemingly are in a partners ” book of business” but it seems to me that is what I would do before I signed up to brining on an expensive lateral if I was a managing partner.

    Trust all is well with you, let me know next time you are heading London way.

    Best wishes David

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  2. Our experience is that most laterals overestimate the amount of portable business that they expect to bring with them. We expect a minimum of 3 million in business from our laterals, recognizing that the first year is likely to be adversely impacted by transition “costs”. We know to discount what is on the LPQ and even then, many fall short. On the other hand, some exceed their projections. Their comment is most often that they do not want to disappoint and gave conservative numbers. A lot goes into our lateral hiring decisions ( expertise need, synergy with existing practices or cultural fit) so although the numbers matter, there are many factors.

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