Minding Your LPQs: How Firms Should Draft and Deploy the Lateral Partner Questionnaire

The lateral partner questionnaire (LPQ) should not be a mere formality – instead, it should be considered your first line of defense in lateral partner hiring.

Sadly, too many law firms leave themselves vulnerable by starting with an  incomplete LPQ or failing to insist on thorough completion. Indeed, in a review of more than 1,000 LPQs by Decipher Investigative Intelligence (DII), a full one-third neglected to get an answer to the basic question, “What is your billing rate?”

Other areas of concern:

  • 21 percent of candidates failed to adequately complete the client section of the LPQ;
  • 25 percent of LPQs did not ask or require recent billable hours;
  • 55 percent of LPQs did not ask or require billing history beyond the current year; and
  • 60 percent of candidates did not disclose references when requested.

The last statistic is especially alarming: Decipher analysis reveals that one in three candidates who do not provide references have a red flag surface during pre-hire due diligence. Overall, red flags have become more common amidst the legal hiring spree: Candidates with tax or financial liens are up 40 percent, and social media “issues” are up almost 25 percent.

Given the increased risk in the hiring pool, it’s imperative for law firms to get their LPQs right – both in their content and structure, and in their deployment. Here’s how to get started.

What to Include

Each firm varies in its approach to the LPQ, but your firm’s LPQ should, at minimum, capture the following information:

  • Complete employment history
  • Educational background
  • Bar admissions
  • Hours and rates
  • Allocation of hours (percentage of billables on clients the candidate originated)
  • Historical compensation
  • Billings and collections
  • Principal clients
  • Support needs (lawyers, staff, resources)
  • Background information/disclosures
    • Financial condition
    • Bankruptcies
    • Debt
    • Leadership positions
    • Continuing financial interests
    • Prior employment disposition
    • Tax returns
    • Prior criminal or civil matters
    • Malpractice claims
    • Harassment/discrimination claims
    • Bar discipline history
    • Business transaction history
    • Outside interests
    • Legal/contractual obligations (law firm and otherwise)
  • Client conflicts
  • Client and personal references

Decipher has a template you may download and customize for your firm.

How to Use It

It’s not enough for law firms to simply have solid LPQs; their value derives from consistent, full and thorough completion.

Law firms should insist on lateral candidates fully completing their LPQ. Roughly 30 percent of LPQs submitted to Decipher are incomplete.

A candidate’s failure to fill out portions of an LPQ may be benign, but a lack of transparency can signal deeper issues. The firm must follow up and press for full information. This is especially critical when it comes to the book of business and past clients – again, an area where more than 20 percent of candidates fail to provide  full disclosure.

Failing to get that information leaves a firm in the dark about the candidate’s past clients – and vulnerable to the bad client surprise. Decipher’s lateral hire intelligence reports have uncovered lateral candidates concealing notorious former clients including neo-Nazis, Bernie Madoff and Roman Polanski.

While everyone is entitled to a zealous defense, these controversial engagements should be discussed openly and honestly – before the lateral is hired.

Create a comprehensive LPQ, and insist on its full completion. Every time.

Verify, Verify, Verify

It’s also imperative for law firms to fully vet the information provided to them by lateral candidates.

Many law firms neither detect nor address red flags before hiring lateral partners, leading to high failure rates in the profession. Key indicators of this include:

  • 62 percent of laterals fail to bring their promised book of business;
  • 35 percent of laterals fail to fit in at their new firm; and
  • 48 percent of laterals leave their new firm within 5 years.

The costs are staggering: Given average lateral partner failure rates, an AmLaw 51 to 150 firm with a pipeline of 20 partner candidates risks losing $17.3 million in failed partner costs, from compensation to recruiter fees. You can calculate your firm’s specific risk here.

A proper LPQ will set a standard for consistency and transparency in your firm’s hiring efforts, and it will commit each candidate in writing. However, it’s just step one: To thoroughly protect your firm’s revenue and reputation, consider a comprehensive due diligence approach. A more purposeful lateral partner hiring process will improve these harrowing statistics, both in your firm and across the profession.

Need a place to start on your firm’s LPQ? Download Decipher’s LPQ template today.

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