Law firms are increasingly using data analytics to inform lateral hiring decisions, similarly to how sports teams use statistics to evaluate players. Firms analyze performance data to identify ideal candidate profiles and estimate if a hire would boost profits. Over one-fifth of Am Law 200 firms have adopted these techniques. While data may help reduce biases, personal judgment is also important in hiring.

1. The Science of Recruiting
Lateral Partners
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2. Summary:
More and more law firms are
relying on specific data analyses
as they make hiring decisions.
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3. According to American Lawyer, recruiting lateral partners is becoming a process
similar to scouting players for Major League Baseball. How? They are beginning
to use statistical analyses, much like the “sabermetrics” methods that are used to
screen baseball players.
By using performance-oriented data and information, firms can generate profiles
of the attorneys they’d like to hire to increase their profits. They can then tailor
their searches to look for these specific candidates. In addition, they can use such
tools to estimate whether hiring a candidate would boost the firm’s bottom line.
Over one-fifth of Am Law 200 firms have started using such techniques in their
hiring processes.
Of course, as with any new technology, there is room for improvement. According
to an ALM Legal Intelligence lateral hiring report with Group Dewey Consulting,
almost one-third (30 percent) of lateral partners returned less than 30 percent of
their expected book of business.
According to Zev Eigen, the global director of data analytics at Littler Mendelson,
his firm has started taking steps to improve lateral hiring and retention by using
data analytical methods.
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4. He commented that artificial intelligence “is fantastic for eliminating biases,”
although he notes that such measures should be used to supplement one’s own
judgment and intuition.
Marina Sirras, a legal recruiter in New York, added that an increasing number of
firms “are doing everything possible to automate everything” before they ever
interview a candidate. It’s too early to analyze the success of such measures, but
since the use of these methods has spread, it’s easy to deduce that these firms
think they are beneficial.
According to Deloitte’s Global Human Capital Trends 2016 report, the adoption of
predictive analytics models almost doubled from 2015 to 2016, jumping from 4
percent to 7 percent. The percentage that used human resources data to
estimate work performance jumped from 28 percent to 51 percent during that
same time frame.
In one example, an insurance company stopped relying so heavily on candidates’
grade point averages and degrees after data analysis of the company’s best
salespeople demonstrated that “the school and GPA had no relationship at all to
performance,” Josh Bersin, a principal at Deloitte Consulting, commented.
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5. Rather, a background working with cars and homes showed a stronger correlation
with success in selling auto and home insurance. Additionally, a lack of typos and
spelling errors in one’s resume “which showed focus and attention to detail”
were also associated with more job success.
Bersin said, “The other thing that data shows is that the very top performers have
high expectations for money, so you don’t want to be too ‘fair’ about
compensation. People who are high performers expect to be paid for it.”
Approximately 34 percent of Am Law 200 firms use products from Aderant
Holdings, Inc., such as its new Spotlight Analytics tool, Derek Schutz, the product
manager for business intelligence at the company said. The program tracks over
200 key performance indicators for timekeepers, which helps firms determine
whether lateral hires and practice groups have met billing, revenue, and
collections goals. The data can also be used to develop a profile of the most
successful hires, and to determine what other types of attorneys the firm may
need to boost its profits. Schutz commented, “We look for characteristics and we
look for markers. It is almost like a Moneyball approach.”
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6. The ABA Journal adds that firms also use “big data” to analyze which cases may
be easy wins, as well as which ones may have questionable outcomes. Lex
Machina, for example, can predict case outcomes for patent attorneys.
Mark A. Lemley, a professor at Stanford Law, said, “I think analytics is the wave of
the future. Lawyers and companies make decisions today based on ‘anecdata.’ If
the lawyer remembers winning a case on a particular issue in front of a particular
judge, they instinctively assume they know how that judge thinks about that
issue. But that’s not necessarily so. Data allows companies and firms to
understand the real opportunities and risks they face so they can make intelligent
business decisions.”
David Moran, the direct of product management for legal analytics at Wolters
Kluwer ELM Solutions, said that its 2015 Real Rate Report Snapshot Edition
includes aggregated, anonymous billing data taken from the electronic invoices of
$9.8 billion in fees that were paid by 96 companies to over 4,500 U.S. law firms in
a three-year period. The report was initially created for corporate legal
departments in awarding law firm contracts, but it is also being used for hiring
intelligence. Firms can use the data to estimate what a partner at a competitor
may be billing for work, and how that partner may contribute to the firm if he or
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7. Thomson Reuters Peer Monitor compiles anonymous data from 155 large law
firms. Users can sift through the data and generate custom reports to discovery
areas where a firm may want to implement a lateral hiring strategy, or perhaps
evaluate the performance of a hypothetical lateral profile. On the flip side, some
lateral partners have used competitive intelligence tools to figure out whether a
firm would be a good switch for them as well.
Eric Dewey, the principal of Group Dewey Consulting and the co-author of the ALI
lateral report, says that he’s a bit unsure at this point about predictive analytics as
applied to law firms, because most of the information is based on narrow billing
data and does not have sufficient information on lawyers’ personality and
behavioral traits. Additionally, one of the strongest factors in hiring a lateral
attorney is how much business that attorney will bring to the firm. Dewey
explained, “An attorney needs to bring roughly 70 percent of their book of
business with them within 12 months just to break even. That said, I do think an
effort to model the conditions which have proven most successful is a worthy
endeavor.”
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8. Eigen adds that many companies have created their own predictive analytics for
hiring. For example, Google, Inc., Pfizer, Inc., and Facebook, Inc. use such
measures in hiring and retention. Eigen said, “When clients do things and they
are successful, law firms are wise to adapt them, and this is clearly very
successful for clients.”
This article “The Science of Recruiting Lateral Partners” first
appeared on LawCrossing’s employer section. It is the world leader in “pure”
monitoring and reporting of legal jobs, through its active and growing research
into all legal employers throughout the world.
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