Seconding stars: The implications of seconding top fee-earners to clients

Philip Rodney, chairman at Burness, explores the implications of seconding valued lawyers to clients

It was all very different 20 years ago. When a client looked to a law firm to second someone to them, they were asking a very big favour. There would be '¨a reluctance on the part of the law firm '¨and you would have to be persuaded of the benefits.

And, when you looked for someone within the firm as a potential candidate, you would almost have to twist arms. You certainly wouldn’t want to offer your best people: you would choose someone competent but rarely a star.

How things have changed. Now we welcome these opportunities. Indeed, I have heard of situations where law firms have paid for the privilege of seconding someone to a potential client.

Nowadays, a secondment is seen as a great opportunity to build a relationship with a client, so firms will only second their very best people. These are lawyers who are not just recognised as technically 100 per cent proficient, but ones who will also be great ambassadors for the firm. Inevitably, they are great fee earners too.

A secondment will, of course, generate an opportunity cost. While a lawyer is on secondment, obviously one loses the opportunity for him to generate fees. There are other hidden costs as well. The secondee becomes semi-detached from the firm and there is the danger that elements of his development will be '¨on hold.

But, in many cases, there is a much greater potential cost – that you lose the secondee to the client. Every time you arrange a secondment, that must be at the back of your mind.

This is even more the case nowadays, where partnership in a law firm is not seen as the be all and end all, but where talented lawyers relish the opportunity of working in-house.

Indeed, research has found that nearly 70 per cent of private practice lawyers would consider a move in-house and, perhaps even more surprisingly, 54 per cent of partners would consider such '¨a move.

Long-term considerations

Before we look further at the dangers, what are the benefits?

They are considerable. First, there is the opportunity for the candidate to pick up very specialised expertise. It may mean an emersion in a very distinct area of law, which brings with it experiences that might ordinarily take a whole career to amass. As an example, one of my colleagues was seconded to a broadcaster for nine months and gained pre-production experience that would be otherwise impossible to gather.

But, much more than that, it provides secondees with the opportunity to see practice from the client’s perspective. It gives secondees a unique experience where they not only hone their skills on content but also (and even more importantly) in context.

The secondees get a firsthand understanding of what is important to clients. They learn what good service looks like from the viewpoint of the client and, equally, what its pet peeves may be. They also get to see competitors in action and measure how their firm performs against them. It allows them to pick up new ideas.

But, as important as both these points are, it is the opportunity to create a special bond with the client – quite unlike what might have existed previously – that truly defines the value of a secondment. This is for a number of reasons – the most important is that hopefully the secondee will be a day-to-day living and breathing advertisement for the quality of the '¨host firm.

And, there’s the rub. If the secondee is that great, there must be a strong possibility that the client will be so impressed that it will want the secondee to come in-house. Years ago, that might have had less appeal to a lawyer in private practice. But nowadays, the perceived status and other benefits of working in-house have made it a much more attractive proposition.

Working in-house also has the attraction of allowing a lawyer to be closer to the business. It perhaps offers more flexibility and a different work-life balance. Also, law firms don’t tend to have gyms, crèches and car schemes, along with other benefits that a large corporation may have.

Sometimes secondees just want to scratch the itch. But sometimes getting the experience only serves to confirm a view that they should move in-house.

So what happens where you get that visit from a colleague who says that he wants to cross the Rubicon? There is always a mixture of emotions. On the '¨one hand, you are losing a colleague who has built a profile, a client following and has become part of the mix that has made your firm successful and unique.

On the other hand, there is the obvious thought that having someone embedded in the client is going to make your relationship more secure. The perceived logic is that:

1. the client will feel some commitment to you for providing it with a terrific recruit; and

2. knowing and loving your firm as their new recruit does, there will be an increased flow of instructions.

To an extent, both of these points are valid. The new in-house lawyer will appreciate how good his former firm is and will feel a strong sense of loyalty. You would think that it would create a win-win situation. The client has a new recruit, and the firm’s relationship with the client is consolidated.

That can be true, but it is far from the whole story. The corollary is that the newly recruited in-house lawyer is required to demonstrate not just that he is technically excellent and can manage his team well, but also that he is effective at procuring legal services externally. To do so, he will have to demonstrate that he is entirely objective and that there is no favouritism.

Sometimes general counsel appointed from law firms will, to start with at least, be reluctant to continue exclusive relationships with their old firms. They may feel that it is appropriate to create a panel and, at least in the early days, not to open themselves up to accusations of nepotism. It is sometimes much easier for them to split their instructions.

On the other hand, some will have the courage of their convictions – they know how good their former firms are and that the relationship is a sound one. Having an insider’s view of their old firms, they will know how to add extra value and secure other advantages.

Losing to win?

So what about the idea that has been posited of deliberately seconding high-profile partners to clients with the expectation of losing them? It sounds '¨a bit unsavoury – rather like someone setting out to snare a prince or a rock star. We all know what tends to happen in these scenarios. ‘Hello’ marriages rarely work out.

As in love, also in law: the relationships that tend to be successful are the ones that evolve naturally. The idea of deliberately trying to create a relationship in this way is, in my view, a bit farfetched and fraught with all sorts of difficulties.

Does one really believe that, even if the effect was to establish a relationship '¨at the outset, that it would necessarily endure forever? Is the in-house lawyer really going to feel indefinitely indebted to the host law firm that sponsored him? I don’t think so.

The reality is that, when a lawyer moves in-house, it can have benefits. It can also come with complications. What does happen is that you lose someone from the partnership, along with his skill, earning power, potential and profile. That is something which is unlikely to be matched by the collateral benefits of him going in-house. One may win work that might have gone elsewhere, but it seems a big gamble to deliberately lose a partner to achieve this end.

So, while it must be correct to second your best people into clients and accept the consequences, the idea that you should deliberately second high-profile partners with the expectation of losing them strikes me as a risk too far.

philip.rodney@burness.co.uk