In 2012, Loopstra Nixon LLP had a 24-lawyer team. At that modest size, the law firm struggled to build the traditional pyramid model—in which an army of associates and income partners feed profits up to the equity level—that powers the largest operations in the profession. To reach that status, it had to expand. So it embarked on a long-term recruitment campaign, with a focus on lawyers with an impressive client roster. But Loopstra Nixon was reluctant to offer an attractive compensation package that paid out even if a partner failed to bring over a substantial amount of work. “The agreements we presented to candidates had so many risk-management caveats in our favour that it looked draconian to lateral-partner candidates,” recalls Allan Ritchie, a longtime Loopstra Nixon partner and its present-day chair. “It scared a lot of them away.”
Loopstra Nixon’s initial foray into the lateral market illustrates a tension that the legal industry has long struggled to resolve. On one side, candidates want a base income that’s high enough to justify leaving a comfortable job for an unfamiliar workplace. On the other side, firms know that it’s notoriously tricky to predict whether a candidate has a truly portable book of business. You can’t simply ask a client if it would follow a certain lawyer from one practice to another. Etiquette and ethics forbid it. Amid that uncertainty, Loopstra Nixon made a common mistake: it proceeded with so much caution that it was nearly impossible to recruit any talent at all.
Over time, though, it corrected that error. In the past decade and a half, Loopstra Nixon devised an approach to recruitment that allowed it to land roughly 30 lateral partners, rake in plenty of new business and build up a workforce of more than 120 lawyers. Today, it’s a major player in the Toronto legal market.
Back in 2003, Ritchie began his legal career at Loopstra Nixon. After a four-year stint as an associate, he moved to Baker McKenzie. By 2010, however, he had returned to Loopstra Nixon as a partner. In short order, he also took on a major assignment: to co-lead the firm’s ambitious expansion plan.
It was a daunting task. Ritchie knew he had a lot to learn. A pivotal moment came in 2012, when Loopstra Nixon joined LawExchange International (LEI), a global network of mid-sized law firms that refer business to each other and share best practices at conferences and regional meetups. Ritchie attended his first member conference, in part, to identify proven recruitment tactics that he could implement back at the office.
On that trip, he met James Perkins, then the chief operating officer of Procopio, Cory, Hargreaves & Savitch LLP, a corporate and litigation shop in San Diego. Perkins was LEI’s de facto authority on law-firm management, regularly leading sessions on topics like partner compensation. Perkins also knew how to run an expansion plan. From the late 1990s to 2025, he helped Procopio mushroom from 40 lawyers to approximately 200, with the bulk of that growth coming through lateral recruitment. In that time, more than 85 percent of the firm’s lateral partners stuck around for at least three years. Perkins was proud of that result. “If you listen to the consultants,” he says, “the market typically has a 50 to 60 percent success rate for that time frame.”
Ritchie wanted to understand how Procopio pulled off that feat. Perkins freely shared his wisdom with Ritchie. “I got to know Allan,” recalls Perkins, who left Procopio last year to launch a consultancy service. “Over the years, we would chat.” Ritchie always had “very precise and intelligent questions.”
For Ritchie, Perkins’s most influential lesson was that the best lateral-partner deals set the compensation at a number that divides the risk between the firm and the candidate. Procopio took on risk by offering an attractive base no matter what. That number typically fell short of what a larger firm might offer, but the Procopio bonus structure paid out very well if the candidate brought over the expected book of business. That’s the risk that the candidate had to accept: less money up front, with the potential for a generous payday down the line. Insisting that the candidate absorb some risk likely helped the firm achieve its 85-percent-plus success rate. “Lawyers who truly believed in their book of business liked our compensation model,” says Perkins. He suspects that candidates who rejected the model—and in turn declined to join Procopio—lacked confidence in their ability to bring over the business they projected.
At Loopstra Nixon, Ritchie came to see his firm’s approach to lateral compensation as overly cautious. The firm started to offer a higher base income—though not too high—that could rise sharply if the partner brought over plenty of business. The advice of Perkins played a central role in that decision. “He’s brilliant,” says Ritchie. “He lives and breathes this stuff.”
But how, exactly, does Loopstra Nixon’s recruitment process unfold today? The first meeting with a promising lateral hire generally includes the candidate, a representative from the relevant practice group and at least one member of the growth committee. Presently, that group includes Ritchie and two other partners: Peter Saad, the managing partner, and Aaron Platt, who co-chairs the committee with Ritchie.
That conversation is remarkably frank. Loopstra Nixon is clear that laterals typically start out at the income-partner level. Then it puts together a preliminary appraisal of the candidate’s book of business and the costs associated with that work, such as overhead, marketing and finance. Based on its analysis, the firm projects that person’s potential compensation. That number tends to shift. But if it’s clear that the underlying economics won’t work for one side or the other, it’s not worthwhile to spend weeks or months poring over the details of a deal.
Loopstra Nixon also lays out its risk-sharing model. Candidates can expect a competitive base income, but it won’t be outrageously high. It can also move up or down. When lateral partners significantly outperform or underperform their projection, the firm’s general practice is to have a conversation with them to discuss increasing or reducing their base pay in future years. Importantly, top performers can still pocket—in line with the firm’s transparent compensation formula—a total payday well above their base. Those terms tend to attract candidates who believe in the portability of their practice, while filtering out those who don’t. “In many cases,” says Ritchie, “the process ends with the first meeting.”
If the courtship survives that phase, the negotiation moves from the general to the specific. In particular, the firm embarks on a careful assessment of the portability of the candidate’s book of business. This task is fiendishly tricky. Lawyers often misjudge the loyalty of their clients. Loopstra Nixon has to ethically suss out the likelihood that each client will follow the candidate to a new platform.
The firm has a multi-faceted method. One step is to judge the logic of the candidate’s story. Imagine a partner at a blue-chip national firm who claims to own a large bank’s portfolio of employment work. That’s unlikely. Typically, the bank would be loyal to the firm, not an individual lawyer. But what if that partner claims to own the employment portfolio of a mid-sized industrial manufacturer? That’s the sort of client, by contrast, that might be underserved at a major firm and willing to try out a competitor.
When Platt lateralled into Loopstra Nixon, back in 2023, he told a very persuasive story about the portability of his book. He explained that, in his real-estate development and planning practice, most of his clients rely on a small group of people to decide which legal counsel to hire. He’d built deep personal relationships with those leaders. “I’ve been to several of my clients’ weddings or other family celebrations, where I’ve met their spouses,” says Platt. “My estimate was that about 95 percent of my clients would come over.” In the end, he was right: “That’s exactly what came over.”
Another phase in the vetting process involves hard data. Based on its 30-plus lateral deals, Loopstra Nixon has calculated the historical portability of certain kinds of clients. Litigation practices, for instance, have a different portability rate than books comprised of major corporations. Those percentages inform the firm’s ultimate forecast.
Once Loopstra Nixon has a realistic picture of how much business a candidate may bring over, it runs a profitability assessment. Perhaps a partner is likely to collect $800,000 in personal billings and generate $200,000 of work for associates. From that $1-million total, the firm subtracts the costs associated with the work—overhead, marketing, how much that person spends on business development and so on—to come up with a projected profitability figure. For a set period of time—typically about 18 months—a lateral partner’s initial base compensation is a percentage of that number, not the top-line dollar value of the book. Partners who outperform the projection, of course, will watch their compensation rise.
Overall, Loopstra Nixon has a three-year partner retention rate in the high 80s. Ritchie is pleased with that record, which is well above the industry standard. At the same time, he’s not looking to push the rate any higher. That would reflect, in his view, a misguided pursuit of perfection. “If you’re waiting for a candidate with no risk and a big book,” says Ritchie, “you’re never going to get a deal done.”
Ian Portsmouth is an award-winning writer and editor based in Toronto. He specializes in business and personal finance.
Illustration by Pete Ryan.
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