Is Your Book Moveable?
You have been through the preliminary conversations with a hiring manager, whether in your head or in actuality. As mentioned in previous blogs, this is the question that most people ask themselves in earnest when they begin the interview process. Over these last years of blogs, we have tried to recommend that this should not be the question when you start to interview; instead, you should be asking, “Do you want to learn more?” For argument’s sake, let’s say you have followed our suggestions and learned more about the potential new firm. Now it comes down to this crucial question.
Possible Restrictions To Face When Moving To A New Firm
It’s time to determine if your book is moveable, even as a bond counsel, which usually is much easier to move as very few, if any, firms have any legal restrictions on moving a business. Unsurprisingly, since you are a lawyer working for a law firm, but with bankers and other professionals, this is usually a sticking point in their moving process. Many firms have certain covenants preventing a candidate from moving with their business. Some have limited restrictions, and some more onerous restrictions. Reviewing the employment agreement you have is crucial at this step.
But generally speaking, here are the questions you should ask yourself other than the legal restraints.
- Are these my clients or the firm’s clients? In other words, are these accounts that you inherited when joining this firm, or are they accounts that you brought to the firm?
- Have you moved in the past, and have these clients moved with you? Were they accounts that you had difficulty moving and finally moved, or were they reluctant to move?
- Are you providing any balance sheet lending for the client that your new firm may not offer?
- Are there any platform-related issues you may find at the new firm that will provide a deterrent for most of your clients?
- Will you compete with others at your new firm, directly or indirectly, while trying to service these clients?
- Specifically at a law firm, this above question is delved into with the filling out of a lateral hiring questionnaire of some sort, and all conflicts are thoroughly vetted.
- Are you a member of a team where there is a possibility that your leaving the remaining accounts will stay with your old team?
Negotiations If Necessary
If any of these questions raise an issue, you must thoroughly vet them yourself. From experience, the higher you are in the management chain, the more likely that your accounts will be deemed your own. They most likely are accounts and clients that you have been serving throughout your career. There are also different legal restrictions that your old firm could raise, but I have found that compromise between the old firm and the new firm can be resolved quickly by some suitable old-fashioned horse trading. Sharing compensation on deals that may be in process is not unusual for bankers wanting to bring existing business to a new firm. Money is fungible, but bankers and ideas are not.
The Bottom Line With Your New Firm
Overall, being aware of any restrictions upfront will make for a much smoother transition. A strong covenant not to compete in today’s world may not even be enforceable in many states. As some firms present extremely restrictive provisions, more and more candidates seek to employ a lawyer to look at their current status. Other firms or banks see that it is not worth the hassle of enforcing these covenants. They may ask candidates to identify all previous clients and accounts when they move to their new firm, and they become exempt from any further constraints. What are your next steps? Look at your paperwork. If you have any concerns, let us help you with this transition, as we have with many other great candidates.
You don’t need a resume to chat with us! If you would like to discuss your options, please reach out for a confidential conversation at 760-477-1284 or email at [email protected]. He can also be reached on LinkedIn. Harlan publishes a blog every Thursday here. Subscribe to our monthly newsletter here, which is a compilation of our weekly blogs, so you never miss one. You can find our listing in the “supplier and services” section of the Red Book under the title of “executive recruiting.”
About Harlan Friedman, JD & Founding Member, H. Friedman Search LLC. Harlan is a thirty-year veteran Public Finance Banker turned recruiter who specializes in the placement of all levels Public Finance Bankers, Healthcare Bankers, Municipal Advisors, Compliance Officers, Issuers, and Bond Counsels.