Wednesday, August 2, 2017

Summer Break is Over (Risks are Back, Lateral Edition)

Having emerged from a post-Inception slumber, our intrepid (and, admittedly, idiosyncratic) editor emerges from his Hobbit Hole, stretches, sees his shadow, wonders were July went, and returns to the brimming list of blog updates he's been meaning to get to, one of these days.

With thanks to a few regular readers who pitched in polite pings, including Charles Lundberg, who was recently published, in Minnesota Lawyer: "Quandaries and Quagmires: Carefully vetting lateral partner candidates."

(Bonus point to Chuck, for Inception-like article linking within his own article, making this an expanded post. Though the judges are mixed on the publication of the word "Bro" on this blog for the first time in its 900+ post history. But you go where the sources take you sometimes...) --
  • It’s the end of July 2017 — the bar exam was last week — and the hottest trending topic in legal ethics and risk management right now is this: How badly some law firms have screwed up in vetting new lateral partners. Here’s just a sampling of the most recent headlines in the legal press about lateral hire disasters:
  • "An even better example happened at the end of 2015, when Evan Greebel, a recent lateral hire at Kaye Scholer, made headlines when he was indicted — and his perp-walk televised on the national news2 — along with his client, Martin Shkreli (the notorious “PharmaBro,” a/k/a “the most hated man in America”)."
  • "The “Hiring Misfires,” article acknowledges that all these lateral-partner- turned-criminal-defendant situations may be just “extreme cautionary tales.” The bigger story is the shockingly high percentage of all lateral hires — 50 percent — that flop for more ordinary reasons, “lackluster business prospects, poor people skills or a missing cultural fit.” And the cost of a bad lateral hire can be substantial — two to four times the lateral’s annual compensation."
  • "In any event, the conclusion of the piece seems obvious: 'Many firms, including at the top end of the legal market, don’t do the kind of vetting that might stop a problematic hire in its tracks.'"
  • "And trust me about this: When a lateral does flop spectacularly, you do not want to be the subject of this angry question among your partners: 'Who was the genius who wanted to bring that lawyer into the firm?'"

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