Recruiting ‘Rainmakers’ is Intricate Process for Atlanta Law Firms
28 July 2020
One of the easiest ways a law firm can grow its business is through lateral acquisitions of talent. By bringing in “rainmakers” – attorneys who already have strong client lists – firms can boost revenue and profits per equity partner.
With a lateral hire, law firms are recruiting revenue, said Steven Lynch, general manager for the national legal division of recruiting firm Lucas Group.
“These attorneys are skilled in developing clients. They are not just good practitioners but are also someone who has the charisma needed to instill trust with corporations,” Lynch said. “They go out and bring in business.”
There are risks to recruiting rainmakers, he added. While often clients move firms with their attorneys, it’s not guaranteed. This means the firm would lose those billable hours and the attorney would face pressure to make up for them. Because recruiting rainmakers can be disruptive, they don’t happen as often as one would think, Lynch said, though attorneys can significantly increase their compensation by moving firms.
“The recruiting firm has to offer a compelling reason why someone may want to leave a comfortable position to come help them grow their practice,” he said. “At the rainmaker level, the law firms they are with value the hell out of them, and make sure their compensation is at a competitive place and that they are receiving the support they need – at least if [firms] are smart.”
Attorneys do not have non-compete clauses, which Lynch called ironic. “The same lawyers drafting non-compete clauses for their clients,” he said, “don’t have them for themselves.”
Michael E. Hollingsworth II, partner at Nelson Mullins, said he is always looking for rainmakers.
The co-head of the mergers and acquisitions group and the investment management group at Nelson Mullins, Hollingsworth also sits on the firm’s executive committee and handles recruiting in Atlanta, New York City and Boston.
“In Atlanta, seeking out rainmakers is kind of easy,” he said. “If you have been in the market for a long time, you are familiar with various people around town. Atlanta is a pretty small legal community, so it is not hard to ask around and figure out someone’s reputation and what their client base looks like. I pretty much know who has the business and who doesn’t in Atlanta.”
In larger markets, one of the challenges of recruiting rainmakers is determining if the attorney really has the business they claim and if that business will follow them. It requires due diligence on the recruiting firm’s part, Hollingsworth said.
“Recruiting rainmakers is definitely an art, not a science,” he said. “We are very good at it but, even as much as Nelson Mullins has grown through lateral partner acquisitions, we still screw it up some. I would say our success rate is about 80 percent, and some aren’t complete failures but the performance is less than projected. You develop gut instincts over time, but even with that, you aren’t going to always be batting a thousand.”
Once the firm has a high-performing attorney on its rolls, they need to pay them equitably to prevent them jumping to the next firm that comes calling. The firm should also give them the resources they need to continue to push the practice forward, Hollingsworth added.
“Give them the people, marketing support and marketing budget, and when you incent them in that way, they tend to get more business. When you invest in them and show you believe in them, they tend to perform even better,” he said.
On the other hand, firms have to take disciplinary action if the rainmaker doesn’t produce, Hollingsworth explained. Otherwise, the morale in the firm could suffer.
While these actions are typical during normal times, “Covid-19 has definitely slowed the market down substantially,” Hollingsworth said.
Lynch agreed, adding that this spring, many firms paused their searches, primarily because of the inability to meet candidates face-to-face.
“When a firm is making that kind of financial investment, an in-person meeting is required,” Lynch said. “The same goes for the individual rainmaker being interviewed/recruited. Before making a huge career move, a visit to the office and in-person meetings with their future partners are critical, to make sure it is a cultural fit for their team and clients.”
Lynch said he is starting to see some movement again.
“Most of the firms that engaged us pre-Covid to recruit rainmakers have resumed the searches and picked back up discussions with pending candidates,” he said, but their searches have intensified. “The financial scrutiny on a rainmaker will be more intense as law firms, like most businesses, are suffering from cash perspective. They will indeed add rainmakers, but they will make certain their book of clients is viable and the value hasn’t decreased from the pandemic.”
Rusty Fleming joined Nelson Mullins after working at Morris Manning & Martin for about eight years. With a specialty in real estate finance and corporate finance, he said he believed Nelson Mullins had the platform to “take my business to the next level.” Two of his core clients came with him, which formed the foundation for him to grow his practice with more resources and a larger footprint, he said.
“It was like putting gas on the fire,” Fleming added. “Moving is a multifaceted and very personal decision. You have to examine what you want your practice to look like, what resources you will have and [if] there are conflicts that would preclude you from doing the work you want to do.”
Any attorney being recruited also needs to know their clients well, and “understand if it is your client or the firm’s client,” he advised. “You have to be confident the clients will come with you.”
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