Friday, February 7, 2014
The American Lawyer: Is Reliance on Lateral Hiring Destabilizing Firms?, by William Henderson (Indiana) & Christopher Zorn (Penn State):
More than ever, firms look to laterals to boost profitability. But the data shows that it's not working.
In the field of evolutionary biology, a phenomenon known as Fisher's runaway provides an interesting nuance to the theory of natural selection. Under natural selection, females of a species are typically drawn to males who offer their offspring the best chance of survival. Yet, in cases of a Fisher's runaway (also known as runaway selection), the attributes that make the male more attractive for mating can, over time, reduce the survival prospects for the species as a whole.
The classic example of a Fisher's runaway is the peacock. Although the female peahen is attracted to the peacock's large, colorful tail, the tail itself offers no advantage for survival. In fact, the opposite is true: The bright colors attract the attention of predators, and the cumbersome size reduces the potential for a successful escape. Thus, to mate on the basis of large, colorful tails is to bring potential ruination to the entire species.
When it comes to the market for lateral partners, it seems a dynamic similar to a Fisher's runaway has taken hold among large U.S. law firms. We've spent hundreds of hours assembling and analyzing data about the lateral market and have yet to find a coherent story in which lateral hiring is, on balance, making most large law firms better off in the long term. Instead, we think a more likely scenario is one analogous to the peacock's tail, where an attraction to what is flashy and attention-grabbing may prove valuable (or, at least, not detrimental) during the peacock's own natural life, but not for those who follow. For the peacock, that is fine. But we suspect that most lawyers would aspire to something more.