'Parachuting in' to Lead Firms May Be Next Lateral Trend
Raju will continue to manage a corporate practice. He is bringing over a 10-person legal team with him. And bankruptcy partner Lawrence McMichael will serve as chairman with partner James Hennessey managing the day-to-day needs of the firm.
Jessa Baker, a senior consultant with LawVision Group in Chicago, said a rise in external hiring for leadership positions makes sense for some roles, and doesn't for others.
Baker classified leadership positions into two different camps: external and internal. The internal-facing role, which she said is usually given the title of managing partner, is not something firms will be looking to fill from outside the firm.
"The most important attribute to be successful [in the managing partner role] is institutional knowledge and social capital," Baker said.
The managing partner typically oversees issues such as the management of lawyers, supervision of practice group leaders and compensation, she said.
"You can't hire externally for that," Baker said. "The part that's becoming increasingly valuable for firms to look for external talent are those external-facing roles."
There are three types of leadership needs that would most typically result in a firm hiring its next leader externally, Baker said.
A firm that is looking to improve profitability may hire away a partner from another firm who has proven successful at alternative fee arrangements or project management. Baker said firms are already starting to hire pricing directors from other firms.
"Firms can only do so much internally until they have to look outside to get creative ideas," Baker said.
The second reason to hire externally is strategy, Baker said. Just as important as it is for a lateral to bring a book of business, a lateral leader needs to bring relationships and the ability to build relationships, Baker said. Only a small subset of lawyers has the visibility to help proliferate a firm's reputation, she said.