Portable vs. potential business is a small nuance but an important one in gaining clarity on your business development potential. Many lateral partners confuse and blend these terms. Here’s what they mean.
Portable Business: If you were to leave your firm tomorrow, what business would you be able to take with you, either in terms of active current matters or active clients who are likely to continue sending you work.
In terms of “likely to continue sending work,” here’s an example: a client of yours routinely, consistently, and predictably sends you 3-4 deals a year. You originated and manage this client (or if you didn’t originate, there’s a very high chance the client would follow you), and the client is expected to continue to send you this work. This would likely still be considered “portable” even if you are not working on a current matter right at this time.
The relevant time frame for estimating the amount of revenue is over the next 12 months.
Potential Business: These are opportunities you believe you are likely to develop, but are not with existing clients. For example, if you are conflicted from a potential client at your current firm but have received assurances that you could gain work if you joined a new firm, this would be best characterized as potential business with a very high likelihood of development.
Why does this distinction matter?
Law firms are skeptical about portable business projections, in part because of some partners who over-estimate their projections.
Some firms routinely discount “portable business” projections by as much as 30%, and I believe this is due, in part, to partners who conflate portable with potential business.
If you are including potential business in your portable business projection, clarifying this distinction — before the firm drills down and forces you to make the distinction from a position of defensiveness – is prudent. By doing this, you are demonstrating that you value importance and accuracy when it comes to your projections.
In turn, this provides more legitimacy to the projections you provide to the firm, which goes a long way. You will also be viewed as more straightforward, candid, and accurate, which is the most important currency during a lateral partner move.