Assessing your market value
In Category: Thoughts
There are very few areas of law (corporate tax and pensions are two notable exceptions) where it is possible to make a lateral move at a senior level without a book of business or a very clear and sustainable route to market. Most lawyers above Associate level find that their value in the open labour market is not what they were paid in their last role + a few thousand pounds “to make a move worthwhile” but is rather a proportion of the revenue and in particular profit that they are able to add to the firm they wish to join. Your new firm will expect you and, in many cases, your legal recruiter to be able to address most if not all of the issues identified below.
The legal profession used to be cheerfully separated into “Finders, Minders and Grinders” respectively the Equity Partners who bring in the work; the salaried Partners who manage the work and client relationships and the bright young things who “grind” through the work for the benefit of the layers above. This model sustained the pyramid structure that most firms followed for decades. Over the last ten years or so we have had to adapt to an environment in which almost all lawyers have to be able to Find, Mind and Grind. The conversion of partnerships to LLP’s and the consequent focus on ever increasing PEP (Profit Per Equity Partner) numbers probably has a lot more to do with this than fee pressure from clients.
So what are you worth?
There is no one simple metric: firms want to see a combination of your:-
- Book: restrictive covenants, institutionalised clients and cynicism have somewhat devalued the rather blunt “book of business” approach although this remains very important at least as a snapshot of your current practice.
- Track record: This means a consistent history of matter generation over a number of years. As with all investments your past performance is no guide to your future performance but it does speak to a pattern of behaviour and success that helps a firm understand how they will experience your contribution in year one, year two etc.
- Market: Are you aware of what is happening in your sector – will events or trends in your market aid or hinder you in building or supporting the growth of a practice? How are you positioned to take advantage of or hedge against macro market moves?
- Rates: Is your charge out rate sustainable within the firm you wish to join? Too high and it will raise questions over whether the clients will continue to pay the same level in your new firm – Too low and it may not be commercially viable to conduct the work meaning that clients could desert if your rate were adjusted upwards to meet the needs of the firm.
- Hours: For most firms billing expectations fall in the range of 1250 – 1850 hours a year. This may be adjusted downwards depending on your level of seniority. Even in an age of fixed fee deals this metric matters to demonstrate your fee earning capacity. Business development, staff management and pro bono work will all be taken into account in considering your merit but this will be on top of your core billings. Where you are leading or moving a team the overall utilisation and realisation numbers will need to be provided and explained to ensure that you are trading profitably.
- Reputation: To a limited extent you are what others believe you to be. The degree to which you have protected and promoted your reputation can be taken as both an indication of how you will represent the firm you join and the degree to which they can rely upon work flowing to you because of who you are. This of course includes your interactions with colleagues and clients at previous firms: third party referencing is common for senior hires and your putative new colleagues will want to know what you are like to work with.
For upwardly mobile senior associates, legal directors, counsel etc. seeking a vertical move into partnership it is essential that you are able to clearly define yourself in the above context – you will be benchmarked against internal staff at the same level and there will need to be plenty of clear water between you and them for you to manage your move.
For lateral partners; in addition to the above it is vital to understand whether and where you fit their overall strategic needs and objectives. Just adding revenue seldom provides an absolute answer: opening new markets, servicing existing client’s needs, or developing a new practice area for the firm in question will often complete an internal case for your hire.
As leading London Legal Recruiters we have the experience of thousands of recruitment processes to help guide us and those we work with through each move ensuring both commercial success and stability for both individual and firm.
For all the ability to fully understand and articulate everything that you offer to your next firm and where you might fit in is vital. The hiring firm have to be able to determine whether they are confident that you will add to the profit pool or detract from it and ultimately it is the extent to which you may add to the profits that will determine the success of your move and your market value.
Written by Mark HusbandBack to blog
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