Calculating your following is not easy. You need to walk a fine line between over promising and excessive caution. Too much and you could have questions to answer six months in, too little and you might not even get to meet them. But it is essential.
Opportunities for Partners who declare a zero following are more limited nowadays (if this is you, contact us for a copy of our article on building a business case without a following) so if you are looking to move and you have the potential to bring business, you need to get this right.
Here we look at some basic methods and tips to help simplify the process.
- Address this question early in the process as it will shape which firms a recruitment consultant can suggest and which firms will want to meet you. You don’t need to give exact figures at this stage but the strategy for someone moving with a following of £1m is very different to the strategy for someone with £500k and it pays to get it right from the start.
- Start by looking at your historical figures. Accurate figures for the previous three full financial years are essential, as is a year to date figure. Break it down by Partner billings, Client billings or whatever is relevant to your current firm. List every client (you need not name them at this stage) with any significant spend over that period and determine whether they are instructing you because of your firm, or your firm because of you.
- Categorise the likelihood of these clients moving with you – hot/warm/cool, A/B/C, Definite/Probable/Possible – whatever works best for you. Based on previous track record and what you know of their forthcoming plans, estimate their potential relevant legal spend in future year one and year two.
- Identify and account for any outlying factors – previous billings might be a useful guide but are you likely to lose some of the business even if the client continues instructing you elsewhere? Equally, consider whether you could dramatically increase those billings given the platform of the firm you hope to join.
- Time to determine some figures. You will probably settle somewhere around the middle ground. Not all of the ‘possibles’ will move with you but equally don’t under-estimate your value to your clients. Ask yourself if your current firm has a credible alternative that your client is likely to prefer and if the answer is no, back yourself. A range of say £200k is reasonable but beware, firms are cynical as all have had failed lateral hires and if you say £600k-£800k, some will only take into account the lower figure.
- Be prepared to justify this figure. Demonstrating how you came up with it is a key way of ensuring that it is taken seriously. Support your case with examples of client wins, cases where you have significantly increased billings with existing firm clients, opportunities which you have not been able to pursue because of the restraints of your current firm. Are there clients who you can introduce to other practice areas or at least open the door to pitch for work?
- Remember that any initial abstract figure on following need only ever be a ballpark figure. Further on in the process you would ideally account for your prospective firm’s platform and potential cross-sells in your figures.
Beware the temptation to reduce your stated following on the basis of ‘playing it safe’ – not only will it rule you out of some firms but others will have their own discounting policy and may themselves deduct a further chunk off a figure that you have already reduced.
- Once you have reached a conclusion, be confident in asserting this figure as too many caveats will have people wondering if you are covering your back. Remember, it can only ever be an educated guess and any firm used to hiring lateral partners will know this.
- Don’t allow a following to lead to complacence. A big book of business is a compelling part of a strong business case and it goes a long way, but it won’t always be enough. You should still aim to demonstrate your enthusiasm, your commercial nous, and perhaps most important of all, your ability to fit in as a functioning part of your prospective new team.
- And tip number 11? Talk to a good recruitment specialist who can advise you on process, the range of options available to someone with your level of following, and how best to begin a search. They may also gently challenge you on the nature of your following, a good test for questions that will inevitably arise later in the proceedings.
For a more detailed appraisal of your own practice and how to approach this subject (or if you have any tips of your own), please contact Jason Horobin at [email protected]. You can also find further advice in our Guide to Moving as a Partner, get in touch if you would like us to send you a copy.