Team moves and lateral hires are a popular method of growth for Top 200 UK law firms as our report 'Recruitment to Robots: growth strategies for law firms' found. However there are pitfalls that many individuals and firms are often unaware of.
There are potentially millions of pounds to be paid out if systems and protocols are not followed when hiring new partners, such as restrictive covenants and confidentiality agreements. This can leave a dent in law firms' profitability so they should proceed with caution.
Firms pay millions to avoid partner poaching lawsuits. Large commercial law firms are paying millions of pounds to avoid being sued when they poach teams of lawyers from rivals in a high stakes game that threatens the financial stability of some, a report published today maintains. The recruitment of specialist partners and their teams – so-called lateral hires – has become a feature of City of London law firm behaviour over the past two decades. Restrictive covenants, which are far more prevalent at English firms than at their US counterparts, have been significant stumbling blocks, forcing lawyers to go on long-term gardening leave before moving to their new firms.