The other day, my friend Martin, who was recently involuntarily retired from his law firm, was waxing eloquently, albeit somewhat sadly, on the topic of engagement rings and portable client bases. According to Martin there is a connection. Bear with me and I will try to explain.
It seems that when Martin was first engaged many years ago, his fiancée got it in her mind that Martin had to buy her a very impressive engagement ring. The problem was that Martin was fresh out of law school and had no money. Many suggestions were made by the young lady and her parents, involving strategies such as borrowing money or getting a second job. Martin was having none of it. At one point his fiancée argued that Martin should find a way to afford the expensive ring because it would be a good investment. To which Martin replied, “if it is an investment, when are we planning to sell it?” That did not go over well.
In any event, Martin understood from an early age that something that cannot be sold has no monetary value. He learned that lesson again the hard way when his career path was redirected from his law firm. And that is why Martin believes that there is a connection between engagement rings and legal practices.
I am a firm believer that if you are going to be in private practice, you have to have a client base if you want to earn real money and have any job security. But not just any client base will do. It has to be a portable client base.
The concept of a portable client base is easily stated but poorly understood by many lawyers, which is kind of strange, because they really should know better.
Simply put, a portable client base is one that a lawyer can take with them when they leave the firm. As simple as that idea is, lawyers find a myriad of ways to misunderstand it in real life. And more often than not, it has something to do with their egos.
Allow me to explain.
Law firms often record client originating credits on a historical basis. The thought process goes something like this: “I brought the client in ten years ago. It is my client and I want to continue to get compensated for that client as long as they are dealing with the firm.”
That may work as long as the partners are getting along, but departing lawyers sometimes find out that it does not work nearly as well when they leave the firm.
One of the smartest lawyers I ever met, and who I will call Les, prided himself on being a great rainmaker, which he was. Many of his Partners and Associates worked hard to keep his clients happy. Les was an ambitious chap who always wanted more, so he set his sights on joining a national firm. Les had a healthy ego, which blinded him from fully understanding that his referral sources and clients loved working with the various firm members who had been handling much of his work for years. When he left for another firm, many of his clients stayed behind.
Another Partner, looking to avoid a heart attack and a divorce, wanted to move the other way, from a national firm to a smaller firm. He discovered that you cannot spend twenty years telling your clients that all of the competent lawyers work for national firms, and then turn on a dime and start telling them that medium-sized firms are just as good.
Of course there are other factors that distinguish a normal client base from a portable client base. Things like whether the type of work being done requires a Big Law environment and potential conflicts of interest.
So why does it matter whether your client base is portable if you are happy where you are? Because law firm cultures change over time and your personal job security depends upon being able to vote with your feet. It also does not hurt to remind your Partners now and then that you have options.
Or course, the tricky part is keeping your client base portable without being the office jerk who is not a team-player, refuses to delegate, and works themself into illness, all to keep their Associates and Partners from getting too close to their clients. But that is a topic for another day.
This article was originally published by Law360 Canada, part of LexisNexis Canada Inc.