The LPQ and you

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.

Contact Steve
McCormick Group

Contact Murray
M Coffey

Transcript

Unknown: 0:00

Murray, welcome to Steve's rules, periodic podcast featuring Steve Nelson, executive principal at McCormick group in the law and government affairs practice. My name is Murray Coffey, and I am the principal of Adam Coffey, a law firm marketing and business development Boutique. For more information, please visit my website at M coffey.net Steve has been an executive recruiter for nearly three decades, and without naming names, he is ready to spill the tea on best practices, and maybe a few not so best practices by firms and candidates that he has seen during his career, recruiting some of the most driven and successful professional into highly profitable and growing firms. Steve is a former lawyer and journalist and is a fellow of the college of law practice management and a proud son of Wilkes Barre, Pennsylvania. Full transparency here, Steve has helped my career immensely through the years and has become something of a career shaman to me and I know many others. Alright. Well, we are back for another edition of Steve's rules with with legendary recruiter, Steve Nelson. Steve, how are you today? Good. How are you doing? I'm all right. I will tell you that the ambient air temperature here in Dallas is just two degrees shy of what is legally allowed for a dry sauna at your gym. So it's, it's a it's a scorcher,

Steve: 1:29

yeah, we got a respite this way after we have one of these, the freak storms, which knocked our power out for I saw that, yeah, um, we this. We're now in the 80s. It's the nicest day we've had since the middle of May. So,

Unknown: 1:44

alright, well, that's That's great. We're moving into the we're moving into the to the final round of the summer here, and hopefully we'll all get to some decent weather come come the fall. But what I'm focused on today is what's going on in the lateral recruiting market. We're going to talk about two different subjects today. We're going to start out with a bit of a market snapshot from Steve and his team, and then we're going to go into pretty interesting conversation, I think about dreaded lpqs, and we'll get into what those are and why, why we're talking about them in just a minute. But the but Steve and his team over at McCormick group are always keeping their fingers on the pulse of what's going on across the country, especially in some highly dynamic markets, I would call them. And so Steve, I know you had a couple of thoughts to share about what you're seeing some intel about what's going on and maybe some some broader national implications. So want to talk a little bit about what's going on in

Steve: 2:47

the market. Right? Overall, I think we're seeing the market being pretty similar to last year terms a number of moves. The one thing we're seeing overall is that the number of group moves have, have have gone up significantly. And for example, in the DC market, which we track on a regular basis, have been 31 group moves to partner level attorneys, or more 31 in the first six months, compared to 22 last year. So in Texas, we've only been doing that since January, and I found some interesting things with regard to that. Market number one, it's not as active as market as I thought it would be, you know, it's obviously people, a lot of firms are moving to Texas. A lot of the big firms are already here and have been here for years, and you've got four major metropolitan markets that are included, yet the total number of moves are not even half of the moves in DC. And I know DC is is a market of its own. I expected that would be more active Texas, but not by this much. The other part, though, with regard to Texas, is that the number of group moves is very high. It's almost 25% of all lawyers that moved among the amla 200 in the first six months or part of a group. So that's interesting. And what's really interesting is that of the firms 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 of this group moves are occurring among the interlopers. You know, whether it's you know, whether it's Wilkie far or Shepard Mullen or Joe even Jones Day. I mean, they're all, they're all either getting lawyers or they're losing lawyers

Unknown: 4:53

that sort Yeah. Well, yeah, it that that is, that is interesting. I think if we had done this. Snapshot, five years ago, you may have seen something a little different. The legacy firms in Texas were hemorrhaging lawyers. And I can speak from, from, you know, from very, very first hand experience on that. And I do find it interesting that the dynamism in the in the market in Texas are the lawyers moving out of the what you were calling the interlopers. And I wonder in you know, this is just speculation, but we know that we knew we were tracking when I was at hanesboon, we were tracking the the the moves, just like you are. And there were a lot of guarantees that were being made, reimbursement, or rather, compensation guarantees. And maybe some of those guarantees are are running out. There were two, three year guarantees. So we'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 the Texas market, that's, that's for sure. Okay, let's get right into it. So recently, the National Association of Legal search consultants released a what they're calling, kind of a uniform LPQ. You LPQ to add a, to add a, another extra letter onto it, and it's a, it's kind of an interesting proposition, and it's a good thing to for us, I think, to talk about in the context of Steve's rules. So Steve, could you explain quickly what an what an LPQ is, and because it may go by different names at different firms, but every firm has one, at least. Every sizable firm has

Steve: 6:51

most firms. Yeah. Most firms have them, yeah. So it's a, it is a questionnaire that firms ask all of their lateral candidates to fill out, which includes, you know, basic biographical information for those attorneys who don't have resumes, which are, there are many who don't It has information About the the statistics of their practice, you know, hours worked. You know, bills collected on your own time, your originations, realization rate, all of the statistics that you have. And then the third part is the due diligence questions, which are basically yes or no questions. You know, how often have you beat, beaten your wife type questions? And of course, that's not a yes or no. That's, you know, multiple but, but seriously, that's more questions about you know, things you know. Have you been sued by a client? Have you had your insurance canceled? Have you, you know, been arrested? Have you been charged in any sort of sexual harassment? All of those questions are in there, in those and so there, most of firms have it. The problem has been that the the the questions vary wildly, and the definitions even vary wildly, and it's caused a lot of frustration among the recruiting community, particularly us as outside recruiters, but also for the candidates, if they they're looking at four firms, all of a sudden they've got four different questionnaires. Are asking for four different types of information, and it is very time consuming for people who, you know, Bill, you know, 45 hours a week or thereabouts. So I think that's the genesis of this, is, can we do something to make these things more uniform?

Unknown: 8:54

Yeah, and you know, I served for a couple of years on the firm Strategic Growth committee, my last firm, and looked at a lot of lpqs, and also basically every, every new lateral partner that was coming in, I had to personally work with with them and their, their their business development manager to get a plan put together. 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're hearing in there and and what we tried to do was to ask the kinds of questions that we could use third party data sources to at least validate and it worked out. It didn't, I don't think it ever created a situation in which we passed on a lateral who had gotten to the point where they were being considered by the by the Strategic Growth committee. But it did. It did open up some some discussion. Uh, with them so, and I think, I think everybody, as you said, would be thrilled if we could sort 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 trying to to solve here, right?

Steve: 10:19

So they are trying to come up with a group of questions that you know, that most firms would agree on. So, you know, it's a pretty it's a pretty good model in terms of what they've asked for. The problem is that, is that I don't think firms are going to adopt it. I don't think there's going to be kind of like what's happened in the associate recruiting area, where there are standard forms through now. I don't think firms are going to let change their their particular LP cues much at all based on this, and I've talked to several recruiters who have basically said we're not changing. On the other hand, I think that there may be some ability to change some questions and to make it so that you get you can tweak your your your particular LPQ to make it easier for the candidates to fill out. I think the biggest weakness in this uniform LPQ is that they really, they didn't come to an agreement on some key issues in terms of, you know, things like originations versus billing attorney numbers. So a lot of times, you're really trying to figure out not just what the originations are in a particular firm, but who's really supervising the work, who's really responsible for the work. That's important. It's important both in terms of showing that somebody is is regarded as a practice leader or somebody who can handle a client, but it's also important to show that maybe you're you're willing to take on work for the good of the firm. I know that sometimes you know when you get into lpqs, the problem is that that that kind of attribute is discounted, but nonetheless, there should be a better definition of that. But more importantly, they basically punted on the concept of realization. I don't want to get so much in the reads on that and weeds on that, but concept is that you can is, what are you talking about? Are you talking about your original standard rate that you like that's published that you don't charge any of your clients, and so if you collect all of what you charge, but it's three quarters of your actual standard billing rate is that 75% realization, to me, that's that's not but some firms look at it that way. Some firms look at it more like, Okay, what were you going to charge your client, and then what did you have to write off before you sent the bill? Right? Or similarly, you sent, you sent them the bill, and they've come back and they say, No, we don't agree to these charges. Resend the bill. So again, those are those can create totally different realization rates and yet another group of firms just look at what you sent out with the final bill you sent out, and what you collect, that's your just, you know, your collection realization. So all of that is out there firms view in different ways and the and what the search consultants organization did was say is let we want your realization rate, and then define how your firm actually computes it. And to be honest, the problem with that is, I would say 75% of all law firm partners don't even know how their firm

Unknown: 14:13

that's, that's, I think that's that you put your finger on something really important right there. And and, you know, understanding the true realization on on a billable hour is, you know, as firms are getting more and more focused on profitability, you know, we're, we're thankfully starting to move away from discussions of revenues and more discussion about what is profitable work. Understanding realization is, is, is key. And yet, I think it's just, it's a, it's a, as you said, it's, it's a moving it's a moving target. And and I think that, you know, there's, if you have to ask somebody what amounts to a yes or no question, and then put you know, explanation at the you know. An explanation field right after it, you're already that's already telling you that it's almost an impossible question to answer. So, you know, I think, from my perspective, if somebody who's had to consume the data and try to make sense of the data on, you know, on the inside of the firm, I feel like, you know, the what if, if that, you know, N, LA, Sc, what they what they issued, great, you know, fantastic. But it's not any shorter, in fact, in fact, I would say it's probably longer than many firms have for their lpqs. I mean, my view, I think, I think if, if we could make these things shorter and simpler and focus on, you know, sort of the key elements and and, you know, I think of them as starting points. I think there's other things that that are much more important oftentimes. And they even have, I mean, I've even seen that, you know, some of these poor candidates meet, 56789, 10, different partners during the during the process. And then the partners are asked for 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 can dance to it. You seem like a nice guy. I bet we could work together. You know, that that would be, that's the sum total of the answer. So maybe you can talk a little bit about the key iteration.

Steve: 16:27

I agree with you, with regard to the fact that it's just a starting point. And the more you look at that, the more effective they can be. Because the even the most complex LPQ you could put together are not going to answer the really critical questions that you need to ask them, yes, which is like for your if you start disclosing your portable clients so well, you kind of know things like, how long have you been serving that client? Who else within the firm does work for your for that client? I mean, you can ask those questions, but it's going to get really long. I think that the way that most firms should go, and I think this is where you could come up with a uniform LPQ, which is an initial LPQ, which is really the basics, which is, again, biography, the key the key numbers client. You know key clients, because conflicts is really important. You want to get those out of the way. First. You don't want to go to the end and find a conflict. It's happened to me on multiple occasions. So let's get a good initial LPQ, and then then you can either do a second, secondary one, or just bring it out in your interview process. So I think that's the way to go. And for all of for anybody who's interested, we have a uniform short form, LPQ that we use and we use with our candidates, so we get a key information up front from the candidates, so we can start this process. And then when 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 quick email. We'll have it well, we'll have his email tagged in the description of this this particular session, for sure, Steve, something you and I talked about, when we were preparing and thinking about about lpqs and evaluating, evaluating candidates, was, you know, do the basic economics work and, you know, that's a that, that's a question that that seems to either not get asked or get gets asked in like the 11th hour, and feels, feels to me that it should be answered earlier. And maybe you can talk a little bit about what, what kind of economics work, what kind of economics don't? And I know that, you know that's one of those. It depends. But broadly speaking, how does that work?

Steve: 18:59

Right? Well, of course, every firms look at it differently. You know you usually evaluate both the collections on on individual time and overall originations. And again, it's more complex. But the what is complicating this a little bit is, is that now under some of the new salary disclosure rules, I know that a number of firms do not even ask for compensation information. Some do, so it's a split and in fact, the uniform LPQ does not ask for it because, again, some states it applies, some states it doesn't. But many firms have just decided, because it's too hard to try to distinguish between markets, that they're not going to ask, um, and so that makes it hard, because it's, I mean, it's a function of what that person makes and, um. And I think I've said this before, but one of the one of the problems, which the l, p, q actually exacerbates is that there's no credit, very little credit given to a partner who is doing important key work for other partners or firm clients. So you're, you're a valuable partner, you're the expert on, let's say, some important area within corporate, and you're the go to person, and you're getting this work, and you're not originating the work, but you're key. Well, does that translate? It should translate to another firm 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, certainly there are, there are practitioners out there who originate in these areas. But I think of, you know, tax benefits, executive compensation, really, you know, sort of Cornerstone, key elements to especially on the corporate side, but they're usually, those are usually support 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 people control those clients, but sometimes those are corporate clients that are, that are, you know, have important due diligence issues that are going to come up where, you know, your FERC person is the keepers,

Unknown: 21:31

yeah, and, and, yeah. I mean, FERC was always one of those, those question marks for for my former firm. And, you know, having a having a FERC person or not having a FERC person often was the difference between getting certain kinds of work and that FERC person certainly wasn't going to originate that work. That work was originating with clients who needed that FERC representation. But, you know, yeah, I mean, and why? Why is that person with the 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 are supposedly originating all this business. Well, excuse me, sorry, Steven. I'm getting a little dry here with this, with this dry weather. So what do you think the impact is going to be on the n, l n, a l n, a l s c, it's a lot N, A L S C, S efforts here.

Steve: 22:35

Yeah, I think that, as I've referred to before, I think some firms are going to take a hard look at their, take a hard look at this, hard look at their own, and say, can we improve it? They're not going to, they're not going to adopt this. As I said, I don't think we're there's going to be any kind of uniform adoption at all, but I think it will help some firms make some important changes to their LPQ, which you know, which will be a benefit to everybody, and then I think it does the recruiting community, the recruiters and the candidates may benefit, because perhaps when you're in the early stages of um representing a candidate who's thinking of Looking at multiple firms, the recruiter can send him the uniform LPQ and ask him or her to fill it out. And that way, maybe you can then take that information and apply it to the other lpqs That might be a little different. And I can tell you, we do that all the time. We get we get one LPQ, get it done, and then we use that as the basics for the other ones, but we still have to go back to the 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 to or given a de minimis response on an LPQ,

Steve: 23:58

yes. I mean definitely. So it's they usually won't refuse to fill it out entirely, but they will not answer particular questions that they don't feel like they either don't have the information and remember, one of the issues is, unless you're keeping the information that your firm gives you every month, you really can't go back and ask for, oh, yeah, I want my billings for the last two years. A little bit of a

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 client identification is always an issue if you're a white collar criminal lawyer, you know, you really, I mean, I think there are some ethical exceptions, but you really want to be very careful about that. So, so for many good reasons, people don't fill it out, and of course, for you know, other reasons, people might not fill it out, but definitely comes up. And you know, 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't have a book of business, there are some other considerations that are that are that are entered into, that I wouldn't say, obviate the need for LPQ, but they certainly, certainly augmented. We're not going to expect somebody who's been in one of the federal agencies for the last 10 years to come out with a book of business that's ready to go, right, but they gotta have a valid and viable and colorable business plan. I think that's where they go, right? That's right, yeah, yeah. Well, Steve, this been a quick conversation. I've learned a lot, and I think our audience will will take away some wisdom from this, hopefully, and how they're able to evaluate the candidates, because in the end, this is what this is all about, and we haven't talked about it in this, and maybe we'll do it in another, another, another session, but really talking about the idea of fit and and what that means, because you can have all the business in the world, but if you don't get along, if you don't, if you and that firm, or you and those partners, aren't a fit, aren't, aren't, somehow able to find some commonality, it's it's going to Be an unhappy experience for everybody. We can talk about that another at another time. Anything else you wanted 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 a pleasure, and we'll talk again soon. All right,

Steve: 26:42

thank you, Murray, you.