Latham Gets New Business from Former Colleagues
Latham & Watkins discovered that nearly half of their business was coming from alumni, that is, lawyers who once practiced at the firm an moved on, according to a new article by David Maister.
The firm has more than 1,800 attorneys in 22 offices. The Alumni Network is a home page link on the firm Web site. Here's an excerpt from the article:
Turnover among junior (and even senior) people has become a fact of life in all professions. In the 1980s, Latham learned that it made all the difference in the world whether people left feeling, on the one hand, neglected or badly treated or, on the other hand, as proud advocates of the firm.
Up to that point in time, Latham had ferociously concentrated on hiring, training, indoctrinating, and holding on to talent. In that environment, when a lawyer left the firm to do something else, it was regarded as a failure rather than an opportunity. The pejorative term "attrition" was applied to these sad events. As a result, the firm often treated the departing lawyer neglectfully or even badly, as if he or she was a defector. This is an example of a one-firm firm principle run wild.
In retrospect, the firm lost millions of dollars in potential business because it mismanaged relationships with those who left. As Latham matured as an organization, it changed its practices to honor people who leave the firm and to cultivate their friendship.
In the mid-1990s, Latham made a calculation about how much of then current business came directly or indirectly from alums. The figure was approaching 50 percent. And it was great business -- name-brand clients, often premium rates, quicker bill collection, pleasant dealings, and so on. Moreover, the clients benefited because the alums had a special feel for the firm, including knowledge of strengths and weaknesses. In some cases, alternative risk/reward billing arrangements could be worked out because of the built-in trust factor.
At all of the one-firm firms, the loyalty of alumni is a key competitive weapon. A one-firm firm leader told us, "One of the managing partners of a competing firm once told me, 'The thing that strikes fear in our hearts is when one of your alums ends up at one of our clients -- the loyalty is beyond our understanding and usually means it's just a matter of time before you guys have your nose under the tent.'"
For the full article, see http://davidmaister.com/articles/1/101/1/
