Clients are not always pleased when their outside lawyer moves to another law firm because it requires a change in the attorney-client relationship. Either the client must follow the attorney to the new law firm, leave the work with the previous firm and find a new relationship partner, or find a new lawyer and law firm altogether. Regardless of which option the client chooses—and it’s the client’s choice—it’s disruptive and more work for them. Before deciding to make a lateral move, a smart lawyer will look at the situation from the client’s point of view.
In-house counsel has an obligation to their company to ensure that following you to a new firm will substantially enhance their return on outside counsel expenses. To retain the client relationship, you must assess the value your move brings to the client. Determine whether you can offer greater expertise, broader geographic reach, or more efficiency. You should know the metrics at your old firm as compared to those of the new firm, such as hourly rates and/or alternative fee structures, billing practices, the track record of success for specific types of matters, the ratio of partners to associates (leverage/staffing alternatives), and the like. Most importantly, you must be able to clearly communicate your improved value proposition to the client.
Clients consider several factors when deciding whether to move their business if one of their outside counsel makes a move. Some issues include:
Timing: Assess whether the timing of your move will negatively impact the outcome of a critical client matter. How far along is the matter and what is its profile within the client organization? It could be too costly or disruptive (to the result or politically within the organization) to move the matter if it is too far along. With politically sensitive matters, clients want it to go away as quickly and quietly as possible. They do not want delay, nor do they welcome its exposure to more people than necessary, so those matters can be more difficult to move.
Conflicts: Of course, you and your new firm will check for legal conflicts before you make your move. Beyond that, you must make sure there are no business or industry conflicts. As law firms become significantly larger, conflicts become an increasingly severe problem. At your previous firm, you already worked through and resolved any conflicts—whether with other clients or in a subject matter. When you move to a new law firm, those issues are reopened. Moreover, your new firm already has an understanding with its current clients; thus, resolving conflicts in favor of your new clients may be lower priority.
It’s even worse to discover a conflict after the client moves the business to your new firm. Your client may not want to or be able to issue a waiver and may have to withdraw the business after all. Client and subject matter conflicts involve not only the general counsel, but also the company’s senior executives and the relevant business managers. They don’t like hearing that their long-trusted lawyer joined a firm that represented the other side.
Portfolio management: If you are the relationship partner for a portfolio of work including matters not in your practice area but handled by other lawyers in your previous firm, how will that be handled in your new firm? Corporate clients need assurances that there are appropriate resources at your new firm to continue to appropriately handle all the matters in the portfolio. Furthermore, if there was a special deal negotiated regarding rates, staffing, and alternative service providers, your new firm must understand how to price and manage the portfolio so that moving the business to the new firm will provide as much, if not more, value. There will be new billing systems, protocols, payment systems, blanket waivers, etc. Your client must be willing to take the time and effort to renegotiate those terms. There’s often a lot of red tape involved in releasing and moving files and your client won’t want to be burdened with that. Review with them, matter by matter, how to protect their interests and ease the transition.
Staffing: Your clients are accustomed to your old firm’s processes, procedures, and working with your entire team, including junior partners, associates, paralegals, and administrative staff. If your team is not moving with you, your client will wonder why not. Plan how the new firm will staff your client’s work. Clients resist paying for new people to get up to speed on their matters.
Your new firm will have to assume those costs as well as any administrative costs involved in transferring the work. Rest assured that your client will review your bills carefully to make sure those costs are not slipped in and will remove them if found. It takes more of their time to do this careful review, which is an additional burden.
Of course, part of your integration into your new firm involves introducing your new colleagues to your clients, and vice-versa. The amount of time and effort your client must invest in meeting new lawyers or having “cross-selling” meetings with lawyers at your new firm may be inversely proportional to the likelihood that they will want to move their business from your old firm.
Other factors: In addition to the factors discussed above, your client may choose to stay with your old firm for any of a number of reasons, such as:
- Your new firm is not on its panel of approved counsel;
- Company policy;
- Relationships with other lawyers at your previous firm, including those handling their matters perhaps in other geographic or practice areas;
- The reputations of both your new and old firms;
- Whether someone in the company ever had an unpleasant experience with your new firm or a lawyer there;
- It’s easier to keep doing what they’ve always done; and
- Some clients simply won’t care enough about you to make the move.
Your clients may choose to use both your old and new law firms for a while on various matters, to see which they like best. They will keep the comparison in mind when deciding where to send future business, so be sure you deliver the improved value and performance that you promised!