Childress & Associates, LLC

Brian K. Childress, Esq.

“Where legal consulting becomes a partnership”

www.Childress-Associates.com
Toll Free: (888) 696-6364

Moving Your Practice

Partner Checklist

When you decide to pursue a renewed spirit … Childress & Associates, LLC can help you make the
most of this exciting time by helping you to prepare yourself to adapt and succeed at your new firm.
… we look forward to serving as your agent, Brian K. Childress, Esq.

Moving your practice to another firm is a daunting task that requires complete attention to:
1. Detail.
2. Identifying and navigating through possible difficulties.
3. Resolving issues expeditiously.
4. Interpersonal skills to temper bruised feelings and egos.
5. Accessing the resources of your new firm.
6. Relying on key professionals such as those within your current peer group (current/new firm
members/professional friends) and Childress & Associates’ legal consultants.

Preparation & Due Diligence: We need to prepare your exit from the moment you decide to

move. It’s essential to anticipate potential pitfalls so contingency plans can be devised well in advance to
avoid uncomfortable situations.
1. Reflection: (this one might feel a bit uncomfortable) Are there things you could have done at
your old firm that might have made your time there more fulfilling and successful? Before
accepting the next job, take time to reflect on possible activities that you could have
approached a bit differently which might have yielded a different result.
2. Manage Your Expectations: You have improved your professional situation throughout the
years. However, work is still work and preparing yourself, no matter your standing; to handle
difficult situations is important. No matter your goals, you remain part of an overall
team/group. Remember these components when entering a new firm and environment.
3. Know Your Environment: Again, no matter the level, it’s important to educate yourself about
your new firm’s people, culture, political system and history.
4. Examine The Particulars: It’s very important that we commit to the following: 1) obtain
relevant background information; 2) clarify understandings; 3) recognize that the hiring firm
will most likely look at your reputation, track record, integrity and, in some instances, want to
speak with a client; 4) review the hiring firm's financial records, partnership agreement,
history and organization; 5) obtain a clear understanding of any promised associate (… and
staff) and marketing support; 6) know who in the firm is making the offer and what is their
influence … it takes time to get a practice going, and the sponsor should be able to deflect
premature criticism and help resolve problems.

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Now, let’s get started:

Lateral hiring of partners and practice groups, and mergers between firms, has become an accepted part
of the legal landscape. It persists through boom and recession. Done wisely, it has allowed firms to grow
and their partners to prosper.

Time: Act expeditiously because time is your enemy. The longer it takes to plan and execute

your move, the more likely problems will arise.

Costs: It takes a lot of time and effort to recruit lateral partners. Lateral hires are usually

unproductive until they learn the ropes of their new firm. As a rule of thumb, this usually takes four
months of cost before a new hire makes any contribution. It’s important to have a sound
understanding of this aspect.

Portfolio: Obviously, the amount and quality of legal work and clients that a lateral hire partner will

bring to a new firm is important. However, a firm's interest in the portfolio goes beyond the bottom line;
it is also considered to reflect a successful legal career. Your portfolio amount is an estimate based on
experience and expectations. Understand that favorable assumptions are made (by most partners) in
projecting current business a year or more into the future. Therefore, it’s not uncommon for law firms to
routinely discount these estimates.

Client Attention: Focus on your clients because they’re the most important element in making a

move successful. Since you have both an ethical and legal duty to continue providing the necessary client
services during your move … everything should directly or indirectly relate to each one.

Portable Clients: Sometimes it is difficult to evaluate whether a particular client is portable, i.e.,

will follow a particular lawyer to a new firm. However, it’s generally not likely that a partner with a solid
client relationship will not have an educated opinion about who would and would not move with him/her.
At a minimum, you should be able to identify on a client-by-client basis what the prospects are for
keeping your work. Most clients will move with you if you’ve earned their loyalty. However, some lawyers
misjudge the steps inherent in moving their clients to another firm. These can include the following: 1)
The need to explain the move to your clients, 2) A possible credibility problem if you were promoting
your previous firm, and a natural inertia by the client, 3) Your former colleagues, possibly feeling
aggrieved, may resist the client exodus. Regardless of the circumstances, all parties should be alerted to
the practical issues of moving your clients and the professional ethics concerning retention and
solicitation of these clients.

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Calculation of Portable Business: Partners with excellent relationships and substantial

business will make conservative but definite projections concerning the amount of potential business.
Most accomplished business developers underestimate their collections and mark their success by
exceeding those numbers. Because compensation at the partner level is almost always based in part on
actual business generated, a highly successful partner will have a pecuniary gain for his/her results,
therefore, we need not oversell them at the beginning of the process.
How does one evaluate whether the portable business number is exaggerated? There are several
ways. First, is that number consistent with the partner's current situation? For example, it is unlikely that
a solo practitioner is billing $2 million in business without any help from other attorneys and/or a
substantial billing rate. Therefore, the hiring firm will most likely ask you how many other lawyers actually
handle the work that constitutes your book of business. Moreover, we must be willing to lay out your
billing rates from client to client. The reason is: If you’re moving to a firm where the rate structure is
higher, we need to have an idea as to whether your clients will be able/willing to pay a new firm's higher
rate. Also understand that the hiring firm may examine your current salary and balance it against your
compensation expectations at their firm. In some cases, firms have been burned by a lawyer who
believes that by representing that he/she has a certain amount of business; he/she can secure a larger
base salary. Although there is certainly nothing wrong with this philosophy, it’s critical to everyone’s
reputation that the expectations must be in line with the projected business.
Another issue that might be examined is your business development track record. We must,
therefore, be ready to talk about what your business has been like over the past three years, if we’re not
prepared to discuss this, that's going to be an issue. Generally speaking, unless the attorney has had a
stable client base, and/or a client base that has consistently increased with time, firms are going to be
quite skeptical that you have presented them with a proven commodity.

Diversity of Your Practice: We need to be able to talk about the diversification of your client

base. The hiring firm will probably want to know whether you’re relying on one particular client or many
to support your book of business. Conventional wisdom is that a diversified client base is more secure
because the loss of any one client will not greatly affect the overall business. However, a solid
relationship with one large client presents an easier case in terms of conflict clearing and can be quite
attractive. If we’re unable to break down how much of your business goes to any one particular client,
then a red flag may be raised. The hiring firm will see this as either you really don't have a significant
connection to that client, or we haven’t thought about it. At a minimum, it’s our (firstPRO) job to make
sure these questions can be answered truthfully.

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Estimated Future Portable Business: Even in the less predictable practice areas, a lawyer

should be able to conservatively estimate what his/her book of business will look like in the next three
years. From the eyes of the hiring firm, there are two main reasons why a partner would not be able to
project what his/her billings will be over time. First, he/she may not have given it much thought. Second,
he/she may lack confidence in his/her abilities and be unwilling to make projections. If it's the first, it's
important to understand that these issues need to be determined before even approaching a firm.
One thing we must consider when discussing future projections is to avoid putting forth an
estimate of future business that is greatly out of proportion with your history of business development.
Unless a dramatic increase can be explained in a concrete fashion (i.e., the partner was just able to
secure a national client's entire book of litigation business), then law firms will be immediately suspicious
of numbers that are simply too high. Simply stated, as a team we’re going to put forth an honest and
accurate foot forward ... we’ll never go wrong with this approach.

Compensation: Compensation to lateral hire partners is calculated in many ways, including

percentages of billings, and the manner of payment also varies. You can generally expect, over time, to
take home about thirty percent of annual collections. The amount may be somewhat greater in a small or
medium sized firm with relatively low overhead. Sometimes, partners considering a move may feel that
they should receive a premium based on their potential and sharing the risk of moving with the firm. This
may occasionally be done as an incentive, but compensation most often will revert to the usual pattern.

Partnership Status: Your initial partnership status may depend on the hiring firm's custom as

modified by your bargaining position. Firms may offer "contract" or "local" partnership, or even "of
counsel" or “non-equity” with equity partnership after a specified probationary period. Other firms offer
full partnership. Some lawyers feel strongly about their initial status as a matter of self esteem. Others
maintain that it is irrelevant, even to clients. They believe that partnership only means something for
owners of the firm with a share of the profits and a say in management. A contract partner may have
some advantages, with an assured income and no liability for the firm's lease, line of credit or lawsuits.
Regardless of status, as a lateral partner you’re generally on probation for the first couple of years. As
you can expect, the other lawyers in the firm want to know if you are self sustaining and someone they
want around. Anyone can be encouraged to leave.

Collections: It often takes longer than expected for a lateral hire partner to start producing income.

Receivables remain with the previous firm, which means a two or three month delay in initial collections.
Moreover, the first two or three months with the new firm are spent in spadework; bringing the clients
aboard and introductions to new colleagues. It usually takes six months before the firm can expect

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collections from serious business rather than small matters. Your hiring firm must be prepared to accept
this delay. Otherwise there will be frustration at the upfront expenses and continuing outlay for overhead,
support and compensation. After eighteen months your new firm should start seeing what they bargained
for, and any problems should have become clear.

Business Plan: All of the above issues must be discussed, and we should be able to answer each

of these questions on your behalf before the first meeting with a potential new firm. One way to
summarize this information is to create a business plan that can be delivered to potential firms (at the
appropriate time in the negotiation), and importantly, can be supported by underlying documentation.
Therefore, we will most likely ask, at one of our first meetings, what documentation will be available to
law firms at the later stages of the process so that the law firm can perform its due diligence. Although
your concerns about confidentiality are well founded, too much reluctance to provide this type of
information gives the impression there’s more of an inability to provide the backup than a concern about
confidentiality. Keep in mind, a law firm wants to (and must) understand what business comes from
which clients to make a determination about whether there is a good fit. We want to steer clear of the
impression that “you (the firm) need to simply take it on faith.”
As a savvy lawyer, you should want to spend the time defining all the issues surrounding your
client base. Moreover, much of the information that will be included in a business plan is readily available
to you … as a partner with an existing book of business.

As a true agent representing Partners throughout the country, we are dedicated to acquiring
successful employment deals for our Clients. The lawyer / agent relationship is a higher art;
characterized by dogged determination to always act in a professional manner and do what’s
right for the client (you, the lawyer).

As your agent, we will represent you in the highest standard possible:

HONESTY | INTEGRITY | COMMITMENT