Poor due diligence by law firms and search consultancies is behind the high failure rate of lateral hires, a leading executive headhunter has claimed.

Despite the drawn-out and costly recruitment process involved in senior legal hires, 20% of laterally hired lawyers are no longer with the firm a year after joining and 50% have left within five years.

Dan Watts, of Edward Drummond, told the Gazette that he is surprised so little work is done on the business case for lateral hires. Law firms seem reluctant to require checks that would mitigate the risks, he added. ‘Assumptions are made about the strength of an individual’s personal following, but too often clients are not called to test the strength of their loyalty.’

Failures in due diligence also extend to checks on a lateral candidate’s values and behaviours, which may be at odds with those of the new firm. ‘How they deal with their colleagues and their peers, how good a manager they are – these things are commonly neglected,’ Watts said.

Firms recognise that the failure rate of senior lateral hires is a problem, he noted: ‘Firms have become jaded around this issue – but their current scepticism has not translated into a more thorough approach to due diligence on candidates.’

Consolidation in the legal market, and the resultant increase in the number of individual and team moves, have enhanced the importance of addressing problems associated with lateral hires, Watts said.