Red Flags in Lateral Law Firm Offers: What to Watch For

Dear Derek J.,

Your Pre-Move Due Diligence Checklist

Lateral moves can transform your career — or derail it completely. With firms across major markets like Charlotte and Seattle aggressively recruiting to meet demand, it's crucial to separate genuine opportunities from problematic situations. Here's your step-by-step evaluation framework:

Step 1: Scrutinize the Financial Package

Compensation tied to unrealistic metrics: If your draw or bonus depends on hitting specific origination numbers within 12-18 months, dig deeper. Many firms use aggressive targets to justify lower guaranteed compensation upfront.

Vague equity partnership timelines: Legitimate firms provide clear partnership tracks with specific criteria. Be wary of "we'll revisit equity discussions after you prove yourself" language without concrete benchmarks.

Below-market guarantees for your level: Use resources like our partner portable book calculator to understand your value proposition, then compare against market standards for your practice area and experience level.

Step 2: Investigate Recent Departures

High partner turnover in your practice group: Check recent Am Law coverage and firm announcements. If a practice group has experienced significant partner departures recently, this may indicate systemic issues worth investigating.

Pattern of lateral failures: Research whether recent lateral hires in your practice area are still at the firm. Many firms recruit aggressively but lack the infrastructure to support new partners effectively.

Departures to direct competitors: When partners leave for similar-tier firms rather than moving up-market, it often signals internal problems rather than better opportunities elsewhere.

Step 3: Evaluate the Business Development Reality

Overstated client conflicts clearance: If they're promising access to major clients in your space, verify through conflicts checks. Some firms oversell their ability to clear conflicts with key targets in your market.

Unrealistic revenue projections: Be skeptical of firms making unrealistic projections about portable book growth without specific client commitments. Research suggests lateral moves often maintain rather than dramatically expand existing revenue in the short term.

Lack of marketing support: Ask specifically about business development resources, industry event sponsorships, and marketing budget allocation for your practice area.

Step 4: Assess Cultural and Operational Red Flags

Pressure for immediate decision: Legitimate opportunities allow reasonable due diligence time. Firms pushing for extremely quick decisions may not be allowing adequate time for proper due diligence.

Reluctance to connect you with current partners: Consider speaking with multiple current partners in your practice area, including recent laterals, before making any commitment.

Vague answers about technology and resources: In today's market, firms should clearly articulate their technology stack, research capabilities, and administrative support structure.

Step 5: Verify Market Position and Stability

Declining Am Law rankings: Check multi-year trends in revenue per lawyer and profits per partner. Consistent declines often indicate deeper structural issues.

Office closure rumors: In expanding markets like Charlotte, where firms are growing aggressively, verify the long-term commitment to your target office location.

Client concentration risks: If the office depends heavily on 1-2 major clients, understand the stability of those relationships and your role in maintaining them.

Step 6: Address Bar Admission Requirements

If your move involves relocation, use our bar reciprocity checker early in the process. Some firms make offers contingent on bar admission timelines that may not align with your state's requirements.

Your Final Verification Steps

Before accepting any offer, consider requesting references from the firm's recent lateral hires and conducting informal conversations with attorneys who've worked opposite the firm recently. Pay particular attention to how they describe the firm's reputation for supporting new partners and honoring partnership commitments.

Remember that in today's competitive lateral market, legitimate opportunities shouldn't require you to overlook concerning signals. Reputable firms should be transparent about challenges and realistic about timelines, focusing on your long-term success rather than just immediate revenue production.