Almost no one understands why firms keep hiring lateral partners – except the people running them.
On paper, it looks like a bad bet. Laterals have, at best, a 50% success rate. They can dilute morale, alienate “homegrown” talent, and cost a fortune in guarantees.
But behind closed doors, the conversation is different. As the Chair of a 1,000-attorney firm recently told me: “I can’t squeeze more business development out of my current partners. The bet on a proven rainmaker is worth the risk. One ‘hit’ pays for all the misses.”
The Sullivan & Cromwell “Nuclear” Event
S&C represented xAI in the largest announced merger involving a private target in history – at $250 billion.
The two lead partners on that deal? They didn’t grow up at S&C. They moved over from Skadden in May 2024.
This is lateral recruiting in its purest, most lethal form: The right partners bringing the right “monster” client at exactly the right time. Every Managing Partner in the Am Law 200 is looking at this deal today and asking: “Who is our Skadden pair?”
The Calculus Has Changed
Why is this working now when it failed so often in the past? Because client stickiness shifted from the institution to the individual.
New BTI research shows that 73% of clients will follow their lead partner to a new firm – a massive jump from just 44% in 2023. Clients are choosing continuity over brand names for three reasons:
- Institutional Knowledge: They don’t want to re-explain their business
- Risk Profile: They need a partner who already knows their “red lines”
- Ongoing Dialogue: They value the partner who is already fluent in their 2026 initiatives
The Bottom Line
Partner turnover is no longer a “crisis” – it’s a line item. Corporate counsel will gladly trade the administrative headache of a new firm for the peace of mind that comes with a trusted advisor.
If you’re recruiting, stop looking for “portables” and start looking for indispensables. Test for those three criteria, give them the platform to run, and wait for the “SpaceX” moment to land.
Hats off to Sullivan & Cromwell. They didn’t just hire two partners; they bought a 250-billion-dollar relationship.
Best in the market ahead –
MBR
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