Yesterday, we examined the trend of large law firms to pursue lateral “rainmakers” as a way to move up the rankings in a down market. There were many reasons offered why this is always the answer to what ails law firms.
Today, a look at what law firms want from a rainmaker, contrasted with what they need.
Law firms want what rainmakers have: more clients. They may also want the team that the rainmaker brings over. However, some rainmaker laterals operate as a fiefdom within their new firms, never really integrating practices or cross-selling services. This is ostensibly to ensure a smooth transition and to placate clients nervous about the switch. It also acts as a safety valve for the rainmaker. If things don’t go as planned, they jump again, or even return to their former firm.
What law firms should want is the rainmaker’s client service IP. What this offers is a deeper understanding of how the rainmaker gets clients, keeps clients, grows clients. In this case, the rainmaker with one massive client may not be as valuable long-term as one with 10 very good clients. A rainmaker with 10 good clients and a willingness to teach and work with other rainmakers is where the real long-term payoff is.
Any law firm dealing in rainmakers wants some guarantees that the work will keep flowing. Ethical restrictions aside, these commitments are very hard to get or rely on these days. Any general counsel who would offer a work flow commitment is open to second-guessing later that this was not necessary or perhaps is out-of-market on price.
I referred to a “rainmaker bubble” yesterday for a simple reason. Anything that comes quickly into fashion bears examination. Some rainmakers may fit in well with their new firms. Other law firms may be disappointed that they “bought” the rainmaker at the top of the market, like tulip bulbs or dot-com stocks.
When you look behind any rainmaker, you see a client. And the client’s interest is in specific expertise, good results, and, increasingly, lower costs over time.
You can’t pay a rainmaker more and charge a client less under the prevalent law firm business model. When you take this point in tandem with the client interest in cost control, I honestly don’t know how you value a rainmaker’s “book of business.” Some smarter people than me think they do, and maybe they will be right.
There is no doubt that law firm partners who can get and keep clients are the only real difference maker at their firms. Cracking the rainmaker code is about a lot more than just getting someone to come aboard.