August 11, 2023 • 26 mins
This episode is a must listen for anyone involved in thelateral recruiting process, especially those in decision making roles. Steve’s Rules dives into the Lateral Partner Questionnaire (LPQ) which has become a cornerstone element of the recruiting process. As lateral recruiting has continued to gain prominence as an essential element of many firm’s growth objectives the need to accurately evaluate a potential partner’s likelihood of success becomes critical. And increasingly the LPQ is a cornerstone of the overall pre-hire diligence for most firms. Every firm has some form of LPQ it has evolved over the years. With such a bespoke approach there is no uniformityto fact gathering and candidates can often find themselves answering multiple LPQs if several firms are courting them. The process is repetitive and often fails to provide firms with the information needed to make the right decision on hiring a candidate. Recently the National Association of Legal Search Consultants has developed a uniform LPQ it believes will help firms better leverage best practices for the diligence element of lateral partner recruiting. Super recruiter Steve Nelson from McCormick Group has closely reviewed this new form and he has notes. We also discuss some of the intangibles that need to be considered that are simply not covered in any LPQ. Finally, Steve offers to email his own short form LPQ he has developed to any of our listeners who send him a request. As always, we welcome your input and are interested inhearing from you what topics you would like covered in further episodes of Steve’s Rules.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Unknown (00:00):
Murray, welcome to Steve's rules, periodic podcast
(00:10):
featuring Steve Nelson,executive principal at McCormick
group in the law and governmentaffairs practice. My name is
Murray Coffey, and I am theprincipal of Adam Coffey, a law
firm marketing and businessdevelopment Boutique. For more
information, please visit mywebsite at M coffey.net Steve
has been an executive recruiterfor nearly three decades, and
without naming names, he isready to spill the tea on best
(00:32):
practices, and maybe a few notso best practices by firms and
candidates that he has seenduring his career, recruiting
some of the most driven andsuccessful professional into
highly profitable and growingfirms. Steve is a former lawyer
and journalist and is a fellowof the college of law practice
management and a proud son ofWilkes Barre, Pennsylvania. Full
(00:52):
transparency here, Steve hashelped my career immensely
through the years and has becomesomething of a career shaman to
me and I know many others.
Alright. Well, we are back foranother edition of Steve's rules
with with legendary recruiter,Steve Nelson. Steve, how are you
today? Good. How are you doing?
(01:15):
I'm all right. I will tell youthat the ambient air temperature
here in Dallas is just twodegrees shy of what is legally
allowed for a dry sauna at yourgym. So it's, it's a it's a
scorcher,
Steve (01:29):
yeah, we got a respite this way after we have one of
these, the freak storms, whichknocked our power out for I saw
that, yeah, um, we this. We'renow in the 80s. It's the nicest
day we've had since the middleof May. So,
Unknown (01:44):
alright, well, that's That's great. We're moving into
the we're moving into the to thefinal round of the summer here,
and hopefully we'll all get tosome decent weather come come
the fall. But what I'm focusedon today is what's going on in
the lateral recruiting market.
We're going to talk about twodifferent subjects today. We're
going to start out with a bit ofa market snapshot from Steve and
(02:05):
his team, and then we're goingto go into pretty interesting
conversation, I think aboutdreaded lpqs, and we'll get into
what those are and why, whywe're talking about them in just
a minute. But the but Steve andhis team over at McCormick group
are always keeping their fingerson the pulse of what's going on
(02:27):
across the country, especiallyin some highly dynamic markets,
I would call them. And so Steve,I know you had a couple of
thoughts to share about whatyou're seeing some intel about
what's going on and maybe somesome broader national
implications. So want to talk alittle bit about what's going on
in
Steve (02:47):
the market. Right?
Overall, I think we're seeingthe market being pretty similar
to last year terms a number ofmoves. The one thing we're
seeing overall is that thenumber of group moves have, have
have gone up significantly. Andfor example, in the DC market,
which we track on a regularbasis, have been 31 group moves
(03:08):
to partner level attorneys, ormore 31 in the first six months,
compared to 22 last year. So inTexas, we've only been doing
that since January, and I foundsome interesting things with
regard to that. Market numberone, it's not as active as
(03:31):
market as I thought it would be,you know, it's obviously people,
a lot of firms are moving toTexas. A lot of the big firms
are already here and have beenhere for years, and you've got
four major metropolitan marketsthat are included, yet the total
number of moves are not evenhalf of the moves in DC. And I
know DC is is a market of itsown. I expected that would be
(03:55):
more active Texas, but not bythis much. The other part,
though, with regard to Texas, isthat the number of group moves
is very high. It's almost 25% ofall lawyers that moved among the
amla 200 in the first six monthsor part of a group. So that's
interesting. And what's reallyinteresting is that of the firms
(04:17):
that that have lost lawyers,members of group. There's only
one native Texas firm, you know,well known Texas firm, that's
lost a group. And so most ofthis group moves are occurring
among the interlopers. You know,whether it's you know, whether
(04:38):
it's Wilkie far or ShepardMullen or Joe even Jones Day. I
mean, they're all, they're alleither getting lawyers or
they're losing lawyers
Unknown (04:53):
that sort Yeah. Well, yeah, it that that is, that is
interesting. I think if we haddone this. Snapshot, five years
ago, you may have seen somethinga little different. The legacy
firms in Texas were hemorrhaginglawyers. And I can speak from,
from, you know, from very, veryfirst hand experience on that.
And I do find it interestingthat the dynamism in the in the
(05:18):
market in Texas are the lawyersmoving out of the what you were
calling the interlopers. And Iwonder in you know, this is just
speculation, but we know that weknew we were tracking when I was
at hanesboon, we were trackingthe the the moves, just like you
are. And there were a lot ofguarantees that were being made,
(05:40):
reimbursement, or rather,compensation guarantees. And
maybe some of those guaranteesare are running out. There were
two, three year guarantees. Sowe'll keep an eye on all these
markets, and we'll hear more,you know, as time goes on and
but it is a it is interesting.
What's been going on in in theTexas market, that's, that's for
(06:01):
sure. Okay, let's get right intoit. So recently, the National
Association of Legal searchconsultants released a what
they're calling, kind of auniform LPQ. You LPQ to add a,
to add a, another extra letteronto it, and it's a, it's kind
(06:27):
of an interesting proposition,and it's a good thing to for us,
I think, to talk about in thecontext of Steve's rules. So
Steve, could you explain quicklywhat an what an LPQ is, and
because it may go by differentnames at different firms, but
every firm has one, at least.
(06:49):
Every sizable firm has
Steve (06:51):
most firms. Yeah. Most firms have them, yeah. So it's
a, it is a questionnaire thatfirms ask all of their lateral
candidates to fill out, whichincludes, you know, basic
biographical information forthose attorneys who don't have
(07:11):
resumes, which are, there aremany who don't It has
information About the thestatistics of their practice,
you know, hours worked. Youknow, bills collected on your
own time, your originations,realization rate, all of the
(07:33):
statistics that you have. Andthen the third part is the due
diligence questions, which arebasically yes or no questions.
You know, how often have youbeat, beaten your wife type
questions? And of course, that'snot a yes or no. That's, you
know, multiple but, butseriously, that's more questions
(07:54):
about you know, things you know.
Have you been sued by a client?
Have you had your insurancecanceled? Have you, you know,
been arrested? Have you beencharged in any sort of sexual
harassment? All of thosequestions are in there, in those
and so there, most of firms haveit. The problem has been that
(08:15):
the the the questions varywildly, and the definitions even
vary wildly, and it's caused alot of frustration among the
recruiting community,particularly us as outside
recruiters, but also for thecandidates, if they they're
looking at four firms, all of asudden they've got four
different questionnaires. Areasking for four different types
(08:37):
of information, and it is verytime consuming for people who,
you know, Bill, you know, 45hours a week or thereabouts. So
I think that's the genesis ofthis, is, can we do something to
make these things more uniform?
Unknown (08:54):
Yeah, and you know, I served for a couple of years on
the firm Strategic Growthcommittee, my last firm, and
looked at a lot of lpqs, andalso basically every, every new
lateral partner that was comingin, I had to personally work
with with them and their, theirtheir business development
(09:16):
manager to get a plan puttogether. So we would spend some
time digging through the lpqs,and they are, they are onerous,
they are long. They're it's,it's kind of hard to decipher
them sometimes about what you'rehearing in there and and what we
(09:37):
tried to do was to ask the kindsof questions that we could use
third party data sources to atleast validate and it worked
out. It didn't, I don't think itever created a situation in
which we passed on a lateral whohad gotten to the point where
they were being considered bythe by the Strategic Growth
committee. But it did. It didopen up some some discussion.
(10:00):
Uh, with them so, and I think, Ithink everybody, as you said,
would be thrilled if we couldsort of crack this nut. So what
is, is, is, is n, a, l, s, c,cracking the nut. I mean, what
are they, what are they tryingto to solve here, right?
Steve (10:19):
So they are trying to come up with a group of
questions that you know, thatmost firms would agree on. So,
you know, it's a pretty it's apretty good model in terms of
what they've asked for. Theproblem is that, is that I don't
(10:42):
think firms are going to adoptit. I don't think there's going
to be kind of like what'shappened in the associate
recruiting area, where there arestandard forms through now. I
don't think firms are going tolet change their their
particular LP cues much at allbased on this, and I've talked
(11:03):
to several recruiters who havebasically said we're not
changing. On the other hand, Ithink that there may be some
ability to change some questionsand to make it so that you get
you can tweak your your yourparticular LPQ to make it easier
(11:24):
for the candidates to fill out.
I think the biggest weakness inthis uniform LPQ is that they
really, they didn't come to anagreement on some key issues in
terms of, you know, things likeoriginations versus billing
attorney numbers. So a lot oftimes, you're really trying to
(11:46):
figure out not just what theoriginations are in a particular
firm, but who's reallysupervising the work, who's
really responsible for the work.
That's important. It's importantboth in terms of showing that
somebody is is regarded as apractice leader or somebody who
(12:08):
can handle a client, but it'salso important to show that
maybe you're you're willing totake on work for the good of the
firm. I know that sometimes youknow when you get into lpqs, the
problem is that that that kindof attribute is discounted, but
(12:29):
nonetheless, there should be abetter definition of that. But
more importantly, they basicallypunted on the concept of
realization. I don't want to getso much in the reads on that and
weeds on that, but concept isthat you can is, what are you
talking about? Are you talkingabout your original standard
(12:50):
rate that you like that'spublished that you don't charge
any of your clients, and so ifyou collect all of what you
charge, but it's three quartersof your actual standard billing
rate is that 75% realization, tome, that's that's not but some
firms look at it that way. Somefirms look at it more like,
(13:12):
Okay, what were you going tocharge your client, and then
what did you have to write offbefore you sent the bill? Right?
Or similarly, you sent, you sentthem the bill, and they've come
back and they say, No, we don'tagree to these charges. Resend
the bill. So again, those arethose can create totally
(13:33):
different realization rates andyet another group of firms just
look at what you sent out withthe final bill you sent out, and
what you collect, that's yourjust, you know, your collection
realization. So all of that isout there firms view in
different ways and the and whatthe search consultants
(13:54):
organization did was say is letwe want your realization rate,
and then define how your firmactually computes it. And to be
honest, the problem with thatis, I would say 75% of all law
firm partners don't even knowhow their firm
Unknown (14:13):
that's, that's, I think that's that you put your finger
on something really importantright there. And and, you know,
understanding the truerealization on on a billable
hour is, you know, as firms aregetting more and more focused on
profitability, you know, we're,we're thankfully starting to
move away from discussions ofrevenues and more discussion
(14:34):
about what is profitable work.
Understanding realization is,is, is key. And yet, I think
it's just, it's a, it's a, asyou said, it's, it's a moving
it's a moving target. And and Ithink that, you know, there's,
if you have to ask somebody whatamounts to a yes or no question,
(14:55):
and then put you know,explanation at the you know. An
explanation field right afterit, you're already that's
already telling you that it'salmost an impossible question to
answer. So, you know, I think,from my perspective, if somebody
who's had to consume the dataand try to make sense of the
data on, you know, on the insideof the firm, I feel like, you
(15:18):
know, the what if, if that, youknow, N, LA, Sc, what they what
they issued, great, you know,fantastic. But it's not any
shorter, in fact, in fact, Iwould say it's probably longer
than many firms have for theirlpqs. I mean, my view, I think,
I think if, if we could makethese things shorter and simpler
(15:40):
and focus on, you know, sort ofthe key elements and and, you
know, I think of them asstarting points. I think there's
other things that that are muchmore important oftentimes. And
they even have, I mean, I'veeven seen that, you know, some
of these poor candidates meet,56789, 10, different partners
(16:00):
during the during the process.
And then the partners are askedfor their, their, their take on
this candidate. And, you know,it's, it's, you know, it's that,
like the Dick Clark, you know?
Oh, it's got a nice beat. I candance to it. You seem like a
nice guy. I bet we could worktogether. You know, that that
would be, that's the sum totalof the answer. So maybe you can
(16:21):
talk a little bit about the keyiteration.
Steve (16:27):
I agree with you, with regard to the fact that it's
just a starting point. And themore you look at that, the more
effective they can be. Becausethe even the most complex LPQ
you could put together are notgoing to answer the really
critical questions that you needto ask them, yes, which is like
(16:49):
for your if you start disclosingyour portable clients so well,
you kind of know things like,how long have you been serving
that client? Who else within thefirm does work for your for that
client? I mean, you can askthose questions, but it's going
to get really long. I think thatthe way that most firms should
go, and I think this is whereyou could come up with a uniform
(17:12):
LPQ, which is an initial LPQ,which is really the basics,
which is, again, biography, thekey the key numbers client. You
know key clients, becauseconflicts is really important.
You want to get those out of theway. First. You don't want to go
to the end and find a conflict.
It's happened to me on multipleoccasions. So let's get a good
(17:33):
initial LPQ, and then then youcan either do a second,
secondary one, or just bring itout in your interview process.
So I think that's the way to go.
And for all of for anybody who'sinterested, we have a uniform
short form, LPQ that we use andwe use with our candidates, so
(17:58):
we get a key information upfront from the candidates, so we
can start this process. And thenwhen we get the LPQ, well, we
got a half done. Yeah,
Unknown (18:09):
yeah. And if, if you're interested in getting that from
Steve, just shoot him a quickemail. We'll have it well, we'll
have his email tagged in thedescription of this this
particular session, for sure,Steve, something you and I
talked about, when we werepreparing and thinking about
about lpqs and evaluating,evaluating candidates, was, you
(18:31):
know, do the basic economicswork and, you know, that's a
that, that's a question thatthat seems to either not get
asked or get gets asked in likethe 11th hour, and feels, feels
to me that it should be answeredearlier. And maybe you can talk
a little bit about what, whatkind of economics work, what
(18:52):
kind of economics don't? And Iknow that, you know that's one
of those. It depends. Butbroadly speaking, how does that
work?
Steve (18:59):
Right? Well, of course, every firms look at it
differently. You know youusually evaluate both the
collections on on individualtime and overall originations.
And again, it's more complex.
But the what is complicatingthis a little bit is, is that
(19:24):
now under some of the new salarydisclosure rules, I know that a
number of firms do not even askfor compensation information.
Some do, so it's a split and infact, the uniform LPQ does not
ask for it because, again, somestates it applies, some states
(19:44):
it doesn't. But many firms havejust decided, because it's too
hard to try to distinguishbetween markets, that they're
not going to ask, um, and sothat makes it hard, because
it's, I mean, it's a function ofwhat that person makes and, um.
And I think I've said thisbefore, but one of the one of
the problems, which the l, p, qactually exacerbates is that
(20:06):
there's no credit, very littlecredit given to a partner who is
doing important key work forother partners or firm clients.
So you're, you're a valuablepartner, you're the expert on,
let's say, some important areawithin corporate, and you're the
(20:27):
go to person, and you're gettingthis work, and you're not
originating the work, but you'rekey. Well, does that translate?
It should translate to anotherfirm that could use you, but the
LPQ doesn't get at that at all,
Unknown (20:44):
right. That's great point. And I think of, I think
of, and you know, certainlythere are, there are
practitioners out there whooriginate in these areas. But I
think of, you know, taxbenefits, executive
compensation, really, you know,sort of Cornerstone, key
elements to especially on thecorporate side, but they're
(21:05):
usually, those are usuallysupport practices, but they're
key. They're absolutely key.
Steve (21:09):
And in Washington, to add to that, you've got certain
other FERC practice now, yeah,very much of a support practice.
You know, sometimes peoplecontrol those clients, but
sometimes those are corporateclients that are, that are, you
know, have important duediligence issues that are going
to come up where, you know, yourFERC person is the keepers,
Unknown (21:31):
yeah, and, and, yeah. I mean, FERC was always one of
those, those question marks forfor my former firm. And, you
know, having a having a FERCperson or not having a FERC
person often was the differencebetween getting certain kinds of
work and that FERC personcertainly wasn't going to
originate that work. That workwas originating with clients who
needed that FERC representation.
But, you know, yeah, I mean, andwhy? Why is that person with the
(21:56):
this, this incredibly deep,valuable knowledge of FERC or
employee benefits. Why are they,you know, not as sought after as
as the partners who aresupposedly originating all this
business. Well, excuse me,sorry, Steven. I'm getting a
little dry here with this, withthis dry weather. So what do you
(22:17):
think the impact is going to beon the n, l n, a l n, a l s c,
it's a lot N, A L S C, S effortshere.
Steve (22:35):
Yeah, I think that, as I've referred to before, I think
some firms are going to take ahard look at their, take a hard
look at this, hard look at theirown, and say, can we improve it?
They're not going to, they'renot going to adopt this. As I
said, I don't think we'rethere's going to be any kind of
uniform adoption at all, but Ithink it will help some firms
(22:56):
make some important changes totheir LPQ, which you know, which
will be a benefit to everybody,and then I think it does the
recruiting community, therecruiters and the candidates
may benefit, because perhapswhen you're in the early stages
of um representing a candidatewho's thinking of Looking at
(23:18):
multiple firms, the recruitercan send him the uniform LPQ and
ask him or her to fill it out.
And that way, maybe you can thentake that information and apply
it to the other lpqs That mightbe a little different. And I can
tell you, we do that all thetime. We get we get one LPQ, get
it done, and then we use that asthe basics for the other ones,
(23:42):
but we still have to go back tothe candidate and ask him a
bunch of questions. Have
Unknown (23:49):
you ever seen a situation in which a sought
after candidate has refused toor given a de minimis response
on an LPQ,
Steve (23:58):
yes. I mean definitely.
So it's they usually won'trefuse to fill it out entirely,
but they will not answerparticular questions that they
don't feel like they eitherdon't have the information and
remember, one of the issues is,unless you're keeping the
information that your firm givesyou every month, you really
can't go back and ask for, oh,yeah, I want my billings for the
(24:21):
last two years. A little bit ofa
Unknown (24:24):
hint. Well, that's a red flag.
Steve (24:28):
So so they don't have the information and and yet, some of
the information is clientidentification is always an
issue if you're a white collarcriminal lawyer, you know, you
really, I mean, I think thereare some ethical exceptions, but
you really want to be verycareful about that. So, so for
many good reasons, people don'tfill it out, and of course, for
(24:50):
you know, other reasons, peoplemight not fill it out, but
definitely comes up. And youknow, if the firm perceives the
the lateral is really important,signal. Significant and will be
profitable. They'll overlook it.
Yeah,
Unknown (25:05):
yeah. And I know that that if you're, if you're coming
out of government, and you don'thave a book of business, there
are some other considerationsthat are that are that are
entered into, that I wouldn'tsay, obviate the need for LPQ,
but they certainly, certainlyaugmented. We're not going to
expect somebody who's been inone of the federal agencies for
(25:27):
the last 10 years to come outwith a book of business that's
ready to go, right, but theygotta have a valid and viable
and colorable business plan. Ithink that's where they go,
right? That's right, yeah, yeah.
Well, Steve, this been a quickconversation. I've learned a
lot, and I think our audiencewill will take away some wisdom
(25:48):
from this, hopefully, and howthey're able to evaluate the
candidates, because in the end,this is what this is all about,
and we haven't talked about itin this, and maybe we'll do it
in another, another, anothersession, but really talking
about the idea of fit and andwhat that means, because you can
have all the business in theworld, but if you don't get
(26:09):
along, if you don't, if you andthat firm, or you and those
partners, aren't a fit, aren't,aren't, somehow able to find
some commonality, it's it'sgoing to Be an unhappy
experience for everybody. We cantalk about that another at
another time. Anything else youwanted to hit before we jump off
the LPQ topic? No,
Steve (26:30):
I think we've covered it maybe too much, so hopefully
people will get something out of
Unknown (26:36):
it. Sure, absolutely.
All right, Steve, always apleasure, and we'll talk again
soon. All right,
Steve (26:42):
thank you, Murray, you.
Murray, welcome to Steve's rules, periodic podcast
(00:10):
featuring Steve Nelson,executive principal at McCormick
group in the law and governmentaffairs practice. My name is
Murray Coffey, and I am theprincipal of Adam Coffey, a law
firm marketing and businessdevelopment Boutique. For more
information, please visit mywebsite at M coffey.net Steve
has been an executive recruiterfor nearly three decades, and
without naming names, he isready to spill the tea on best
(00:32):
practices, and maybe a few notso best practices by firms and
candidates that he has seenduring his career, recruiting
some of the most driven andsuccessful professional into
highly profitable and growingfirms. Steve is a former lawyer
and journalist and is a fellowof the college of law practice
management and a proud son ofWilkes Barre, Pennsylvania. Full
(00:52):
transparency here, Steve hashelped my career immensely
through the years and has becomesomething of a career shaman to
me and I know many others.
Alright. Well, we are back foranother edition of Steve's rules
with with legendary recruiter,Steve Nelson. Steve, how are you
today? Good. How are you doing?
(01:15):
I'm all right. I will tell youthat the ambient air temperature
here in Dallas is just twodegrees shy of what is legally
allowed for a dry sauna at yourgym. So it's, it's a it's a
scorcher,
Steve (01:29):
yeah, we got a respite this way after we have one of
these, the freak storms, whichknocked our power out for I saw
that, yeah, um, we this. We'renow in the 80s. It's the nicest
day we've had since the middleof May. So,
Unknown (01:44):
alright, well, that's That's great. We're moving into
the we're moving into the to thefinal round of the summer here,
and hopefully we'll all get tosome decent weather come come
the fall. But what I'm focusedon today is what's going on in
the lateral recruiting market.
We're going to talk about twodifferent subjects today. We're
going to start out with a bit ofa market snapshot from Steve and
(02:05):
his team, and then we're goingto go into pretty interesting
conversation, I think aboutdreaded lpqs, and we'll get into
what those are and why, whywe're talking about them in just
a minute. But the but Steve andhis team over at McCormick group
are always keeping their fingerson the pulse of what's going on
(02:27):
across the country, especiallyin some highly dynamic markets,
I would call them. And so Steve,I know you had a couple of
thoughts to share about whatyou're seeing some intel about
what's going on and maybe somesome broader national
implications. So want to talk alittle bit about what's going on
in
Steve (02:47):
the market. Right?
Overall, I think we're seeingthe market being pretty similar
to last year terms a number ofmoves. The one thing we're
seeing overall is that thenumber of group moves have, have
have gone up significantly. Andfor example, in the DC market,
which we track on a regularbasis, have been 31 group moves
(03:08):
to partner level attorneys, ormore 31 in the first six months,
compared to 22 last year. So inTexas, we've only been doing
that since January, and I foundsome interesting things with
regard to that. Market numberone, it's not as active as
(03:31):
market as I thought it would be,you know, it's obviously people,
a lot of firms are moving toTexas. A lot of the big firms
are already here and have beenhere for years, and you've got
four major metropolitan marketsthat are included, yet the total
number of moves are not evenhalf of the moves in DC. And I
know DC is is a market of itsown. I expected that would be
(03:55):
more active Texas, but not bythis much. The other part,
though, with regard to Texas, isthat the number of group moves
is very high. It's almost 25% ofall lawyers that moved among the
amla 200 in the first six monthsor part of a group. So that's
interesting. And what's reallyinteresting is that of the firms
(04:17):
that that have lost lawyers,members of group. There's only
one native Texas firm, you know,well known Texas firm, that's
lost a group. And so most ofthis group moves are occurring
among the interlopers. You know,whether it's you know, whether
(04:38):
it's Wilkie far or ShepardMullen or Joe even Jones Day. I
mean, they're all, they're alleither getting lawyers or
they're losing lawyers
Unknown (04:53):
that sort Yeah. Well, yeah, it that that is, that is
interesting. I think if we haddone this. Snapshot, five years
ago, you may have seen somethinga little different. The legacy
firms in Texas were hemorrhaginglawyers. And I can speak from,
from, you know, from very, veryfirst hand experience on that.
And I do find it interestingthat the dynamism in the in the
(05:18):
market in Texas are the lawyersmoving out of the what you were
calling the interlopers. And Iwonder in you know, this is just
speculation, but we know that weknew we were tracking when I was
at hanesboon, we were trackingthe the the moves, just like you
are. And there were a lot ofguarantees that were being made,
(05:40):
reimbursement, or rather,compensation guarantees. And
maybe some of those guaranteesare are running out. There were
two, three year guarantees. Sowe'll keep an eye on all these
markets, and we'll hear more,you know, as time goes on and
but it is a it is interesting.
What's been going on in in theTexas market, that's, that's for
(06:01):
sure. Okay, let's get right intoit. So recently, the National
Association of Legal searchconsultants released a what
they're calling, kind of auniform LPQ. You LPQ to add a,
to add a, another extra letteronto it, and it's a, it's kind
(06:27):
of an interesting proposition,and it's a good thing to for us,
I think, to talk about in thecontext of Steve's rules. So
Steve, could you explain quicklywhat an what an LPQ is, and
because it may go by differentnames at different firms, but
every firm has one, at least.
(06:49):
Every sizable firm has
Steve (06:51):
most firms. Yeah. Most firms have them, yeah. So it's
a, it is a questionnaire thatfirms ask all of their lateral
candidates to fill out, whichincludes, you know, basic
biographical information forthose attorneys who don't have
(07:11):
resumes, which are, there aremany who don't It has
information About the thestatistics of their practice,
you know, hours worked. Youknow, bills collected on your
own time, your originations,realization rate, all of the
(07:33):
statistics that you have. Andthen the third part is the due
diligence questions, which arebasically yes or no questions.
You know, how often have youbeat, beaten your wife type
questions? And of course, that'snot a yes or no. That's, you
know, multiple but, butseriously, that's more questions
(07:54):
about you know, things you know.
Have you been sued by a client?
Have you had your insurancecanceled? Have you, you know,
been arrested? Have you beencharged in any sort of sexual
harassment? All of thosequestions are in there, in those
and so there, most of firms haveit. The problem has been that
(08:15):
the the the questions varywildly, and the definitions even
vary wildly, and it's caused alot of frustration among the
recruiting community,particularly us as outside
recruiters, but also for thecandidates, if they they're
looking at four firms, all of asudden they've got four
different questionnaires. Areasking for four different types
(08:37):
of information, and it is verytime consuming for people who,
you know, Bill, you know, 45hours a week or thereabouts. So
I think that's the genesis ofthis, is, can we do something to
make these things more uniform?
Unknown (08:54):
Yeah, and you know, I served for a couple of years on
the firm Strategic Growthcommittee, my last firm, and
looked at a lot of lpqs, andalso basically every, every new
lateral partner that was comingin, I had to personally work
with with them and their, theirtheir business development
(09:16):
manager to get a plan puttogether. So we would spend some
time digging through the lpqs,and they are, they are onerous,
they are long. They're it's,it's kind of hard to decipher
them sometimes about what you'rehearing in there and and what we
(09:37):
tried to do was to ask the kindsof questions that we could use
third party data sources to atleast validate and it worked
out. It didn't, I don't think itever created a situation in
which we passed on a lateral whohad gotten to the point where
they were being considered bythe by the Strategic Growth
committee. But it did. It didopen up some some discussion.
(10:00):
Uh, with them so, and I think, Ithink everybody, as you said,
would be thrilled if we couldsort of crack this nut. So what
is, is, is, is n, a, l, s, c,cracking the nut. I mean, what
are they, what are they tryingto to solve here, right?
Steve (10:19):
So they are trying to come up with a group of
questions that you know, thatmost firms would agree on. So,
you know, it's a pretty it's apretty good model in terms of
what they've asked for. Theproblem is that, is that I don't
(10:42):
think firms are going to adoptit. I don't think there's going
to be kind of like what'shappened in the associate
recruiting area, where there arestandard forms through now. I
don't think firms are going tolet change their their
particular LP cues much at allbased on this, and I've talked
(11:03):
to several recruiters who havebasically said we're not
changing. On the other hand, Ithink that there may be some
ability to change some questionsand to make it so that you get
you can tweak your your yourparticular LPQ to make it easier
(11:24):
for the candidates to fill out.
I think the biggest weakness inthis uniform LPQ is that they
really, they didn't come to anagreement on some key issues in
terms of, you know, things likeoriginations versus billing
attorney numbers. So a lot oftimes, you're really trying to
(11:46):
figure out not just what theoriginations are in a particular
firm, but who's reallysupervising the work, who's
really responsible for the work.
That's important. It's importantboth in terms of showing that
somebody is is regarded as apractice leader or somebody who
(12:08):
can handle a client, but it'salso important to show that
maybe you're you're willing totake on work for the good of the
firm. I know that sometimes youknow when you get into lpqs, the
problem is that that that kindof attribute is discounted, but
(12:29):
nonetheless, there should be abetter definition of that. But
more importantly, they basicallypunted on the concept of
realization. I don't want to getso much in the reads on that and
weeds on that, but concept isthat you can is, what are you
talking about? Are you talkingabout your original standard
(12:50):
rate that you like that'spublished that you don't charge
any of your clients, and so ifyou collect all of what you
charge, but it's three quartersof your actual standard billing
rate is that 75% realization, tome, that's that's not but some
firms look at it that way. Somefirms look at it more like,
(13:12):
Okay, what were you going tocharge your client, and then
what did you have to write offbefore you sent the bill? Right?
Or similarly, you sent, you sentthem the bill, and they've come
back and they say, No, we don'tagree to these charges. Resend
the bill. So again, those arethose can create totally
(13:33):
different realization rates andyet another group of firms just
look at what you sent out withthe final bill you sent out, and
what you collect, that's yourjust, you know, your collection
realization. So all of that isout there firms view in
different ways and the and whatthe search consultants
(13:54):
organization did was say is letwe want your realization rate,
and then define how your firmactually computes it. And to be
honest, the problem with thatis, I would say 75% of all law
firm partners don't even knowhow their firm
Unknown (14:13):
that's, that's, I think that's that you put your finger
on something really importantright there. And and, you know,
understanding the truerealization on on a billable
hour is, you know, as firms aregetting more and more focused on
profitability, you know, we're,we're thankfully starting to
move away from discussions ofrevenues and more discussion
(14:34):
about what is profitable work.
Understanding realization is,is, is key. And yet, I think
it's just, it's a, it's a, asyou said, it's, it's a moving
it's a moving target. And and Ithink that, you know, there's,
if you have to ask somebody whatamounts to a yes or no question,
(14:55):
and then put you know,explanation at the you know. An
explanation field right afterit, you're already that's
already telling you that it'salmost an impossible question to
answer. So, you know, I think,from my perspective, if somebody
who's had to consume the dataand try to make sense of the
data on, you know, on the insideof the firm, I feel like, you
(15:18):
know, the what if, if that, youknow, N, LA, Sc, what they what
they issued, great, you know,fantastic. But it's not any
shorter, in fact, in fact, Iwould say it's probably longer
than many firms have for theirlpqs. I mean, my view, I think,
I think if, if we could makethese things shorter and simpler
(15:40):
and focus on, you know, sort ofthe key elements and and, you
know, I think of them asstarting points. I think there's
other things that that are muchmore important oftentimes. And
they even have, I mean, I'veeven seen that, you know, some
of these poor candidates meet,56789, 10, different partners
(16:00):
during the during the process.
And then the partners are askedfor their, their, their take on
this candidate. And, you know,it's, it's, you know, it's that,
like the Dick Clark, you know?
Oh, it's got a nice beat. I candance to it. You seem like a
nice guy. I bet we could worktogether. You know, that that
would be, that's the sum totalof the answer. So maybe you can
(16:21):
talk a little bit about the keyiteration.
Steve (16:27):
I agree with you, with regard to the fact that it's
just a starting point. And themore you look at that, the more
effective they can be. Becausethe even the most complex LPQ
you could put together are notgoing to answer the really
critical questions that you needto ask them, yes, which is like
(16:49):
for your if you start disclosingyour portable clients so well,
you kind of know things like,how long have you been serving
that client? Who else within thefirm does work for your for that
client? I mean, you can askthose questions, but it's going
to get really long. I think thatthe way that most firms should
go, and I think this is whereyou could come up with a uniform
(17:12):
LPQ, which is an initial LPQ,which is really the basics,
which is, again, biography, thekey the key numbers client. You
know key clients, becauseconflicts is really important.
You want to get those out of theway. First. You don't want to go
to the end and find a conflict.
It's happened to me on multipleoccasions. So let's get a good
(17:33):
initial LPQ, and then then youcan either do a second,
secondary one, or just bring itout in your interview process.
So I think that's the way to go.
And for all of for anybody who'sinterested, we have a uniform
short form, LPQ that we use andwe use with our candidates, so
(17:58):
we get a key information upfront from the candidates, so we
can start this process. And thenwhen we get the LPQ, well, we
got a half done. Yeah,
Unknown (18:09):
yeah. And if, if you're interested in getting that from
Steve, just shoot him a quickemail. We'll have it well, we'll
have his email tagged in thedescription of this this
particular session, for sure,Steve, something you and I
talked about, when we werepreparing and thinking about
about lpqs and evaluating,evaluating candidates, was, you
(18:31):
know, do the basic economicswork and, you know, that's a
that, that's a question thatthat seems to either not get
asked or get gets asked in likethe 11th hour, and feels, feels
to me that it should be answeredearlier. And maybe you can talk
a little bit about what, whatkind of economics work, what
(18:52):
kind of economics don't? And Iknow that, you know that's one
of those. It depends. Butbroadly speaking, how does that
work?
Steve (18:59):
Right? Well, of course, every firms look at it
differently. You know youusually evaluate both the
collections on on individualtime and overall originations.
And again, it's more complex.
But the what is complicatingthis a little bit is, is that
(19:24):
now under some of the new salarydisclosure rules, I know that a
number of firms do not even askfor compensation information.
Some do, so it's a split and infact, the uniform LPQ does not
ask for it because, again, somestates it applies, some states
(19:44):
it doesn't. But many firms havejust decided, because it's too
hard to try to distinguishbetween markets, that they're
not going to ask, um, and sothat makes it hard, because
it's, I mean, it's a function ofwhat that person makes and, um.
And I think I've said thisbefore, but one of the one of
the problems, which the l, p, qactually exacerbates is that
(20:06):
there's no credit, very littlecredit given to a partner who is
doing important key work forother partners or firm clients.
So you're, you're a valuablepartner, you're the expert on,
let's say, some important areawithin corporate, and you're the
(20:27):
go to person, and you're gettingthis work, and you're not
originating the work, but you'rekey. Well, does that translate?
It should translate to anotherfirm that could use you, but the
LPQ doesn't get at that at all,
Unknown (20:44):
right. That's great point. And I think of, I think
of, and you know, certainlythere are, there are
practitioners out there whooriginate in these areas. But I
think of, you know, taxbenefits, executive
compensation, really, you know,sort of Cornerstone, key
elements to especially on thecorporate side, but they're
(21:05):
usually, those are usuallysupport practices, but they're
key. They're absolutely key.
Steve (21:09):
And in Washington, to add to that, you've got certain
other FERC practice now, yeah,very much of a support practice.
You know, sometimes peoplecontrol those clients, but
sometimes those are corporateclients that are, that are, you
know, have important duediligence issues that are going
to come up where, you know, yourFERC person is the keepers,
Unknown (21:31):
yeah, and, and, yeah. I mean, FERC was always one of
those, those question marks forfor my former firm. And, you
know, having a having a FERCperson or not having a FERC
person often was the differencebetween getting certain kinds of
work and that FERC personcertainly wasn't going to
originate that work. That workwas originating with clients who
needed that FERC representation.
But, you know, yeah, I mean, andwhy? Why is that person with the
(21:56):
this, this incredibly deep,valuable knowledge of FERC or
employee benefits. Why are they,you know, not as sought after as
as the partners who aresupposedly originating all this
business. Well, excuse me,sorry, Steven. I'm getting a
little dry here with this, withthis dry weather. So what do you
(22:17):
think the impact is going to beon the n, l n, a l n, a l s c,
it's a lot N, A L S C, S effortshere.
Steve (22:35):
Yeah, I think that, as I've referred to before, I think
some firms are going to take ahard look at their, take a hard
look at this, hard look at theirown, and say, can we improve it?
They're not going to, they'renot going to adopt this. As I
said, I don't think we'rethere's going to be any kind of
uniform adoption at all, but Ithink it will help some firms
(22:56):
make some important changes totheir LPQ, which you know, which
will be a benefit to everybody,and then I think it does the
recruiting community, therecruiters and the candidates
may benefit, because perhapswhen you're in the early stages
of um representing a candidatewho's thinking of Looking at
(23:18):
multiple firms, the recruitercan send him the uniform LPQ and
ask him or her to fill it out.
And that way, maybe you can thentake that information and apply
it to the other lpqs That mightbe a little different. And I can
tell you, we do that all thetime. We get we get one LPQ, get
it done, and then we use that asthe basics for the other ones,
(23:42):
but we still have to go back tothe candidate and ask him a
bunch of questions. Have
Unknown (23:49):
you ever seen a situation in which a sought
after candidate has refused toor given a de minimis response
on an LPQ,
Steve (23:58):
yes. I mean definitely.
So it's they usually won'trefuse to fill it out entirely,
but they will not answerparticular questions that they
don't feel like they eitherdon't have the information and
remember, one of the issues is,unless you're keeping the
information that your firm givesyou every month, you really
can't go back and ask for, oh,yeah, I want my billings for the
(24:21):
last two years. A little bit ofa
Unknown (24:24):
hint. Well, that's a red flag.
Steve (24:28):
So so they don't have the information and and yet, some of
the information is clientidentification is always an
issue if you're a white collarcriminal lawyer, you know, you
really, I mean, I think thereare some ethical exceptions, but
you really want to be verycareful about that. So, so for
many good reasons, people don'tfill it out, and of course, for
(24:50):
you know, other reasons, peoplemight not fill it out, but
definitely comes up. And youknow, if the firm perceives the
the lateral is really important,signal. Significant and will be
profitable. They'll overlook it.
Yeah,
Unknown (25:05):
yeah. And I know that that if you're, if you're coming
out of government, and you don'thave a book of business, there
are some other considerationsthat are that are that are
entered into, that I wouldn'tsay, obviate the need for LPQ,
but they certainly, certainlyaugmented. We're not going to
expect somebody who's been inone of the federal agencies for
(25:27):
the last 10 years to come outwith a book of business that's
ready to go, right, but theygotta have a valid and viable
and colorable business plan. Ithink that's where they go,
right? That's right, yeah, yeah.
Well, Steve, this been a quickconversation. I've learned a
lot, and I think our audiencewill will take away some wisdom
(25:48):
from this, hopefully, and howthey're able to evaluate the
candidates, because in the end,this is what this is all about,
and we haven't talked about itin this, and maybe we'll do it
in another, another, anothersession, but really talking
about the idea of fit and andwhat that means, because you can
have all the business in theworld, but if you don't get
(26:09):
along, if you don't, if you andthat firm, or you and those
partners, aren't a fit, aren't,aren't, somehow able to find
some commonality, it's it'sgoing to Be an unhappy
experience for everybody. We cantalk about that another at
another time. Anything else youwanted to hit before we jump off
the LPQ topic? No,
Steve (26:30):
I think we've covered it maybe too much, so hopefully
people will get something out of
Unknown (26:36):
it. Sure, absolutely.
All right, Steve, always apleasure, and we'll talk again
soon. All right,
Steve (26:42):
thank you, Murray, you.
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