As law firms cautiously consider the lateral market and as law firm partners, sometimes warily and sometimes by necessity, consider making lateral moves, seeking better opportunities, or because they are being eased out the door of their current law firms (yes, Virginia, law firms are engaging in partner layoffs), renewed and heightened emphasis on due diligence by both the law firm and a lawyer considering joining a new law firm is increasingly essential.
In my many travels, I am frequently surprised to hear law firms express growing leeriness about taking on lateral partners because of past disappointments (“they didn’t deliver as promised” is a typical refrain).
Similarly, too often new lateral partners express regret about joining a new firm, finding, once they have moved after going through the travails of moving clients and staff that their new homes are fraught with problems that were not fully appreciated as the parties engaged in the de rigueur discussions and negotiations preceding a lateral move.
Here, we offer a brief guide as to the due diligence which should be conducted by both sides before a lateral deal is struck. The stakes for all sides in these combinations are high and the full array of due diligence is substantially more detailed and complex than this brief guide can provide.
Most significantly, the due diligence essential to a successful lateral law firm partner move is complex art and science and is best guided by a professional with substantial experience in the area.
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