There are only two ways to effectively grow your law firm, and only one of them create value to the partners:
- Lateral hires: recruiting partners from other firms
- Word of Mouth Marketing
Data shows that lateral hires are a difficult long-term strategy for growing your firm. 83% of mergers don’t increase shareholder value, and, 47% of laterals don’t make it five years with their new firm, which is usually about the length of time needed for a lateral hire to cross over the recruiting and compensation-above-contribution line into positive territory.
By contrast, word of mouth is a far better long term strategy because it focuses on amplifying the effect of your word of mouth through your audience that you own and control
Links/References mentioned in this episode:
- 47% of lateral hires don’t make it five years with their new firm: https://www.boomtime.com/there-are-only-two-ways-to-grow-your-law-firm/
- 83% of mergers don’t increase shareholder value: https://www.forbes.com/sites/georgebradt/2015/01/27/83-mergers-fail-leverage-a-100-day-value-acceleration-plan-for-success-instead/#63cbca905b86