Do partners count their book of business as amount collected or amounts billed/invoiced (to be collected)?

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For lateral purposes, it’s the amount of business you’ll be bringing over to the new firm

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Context: I am looking to lateral as an NEP and because of my practice area, I have a large amount of work in progress that will get paid upon certain milestones.

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They’re going to care about the fees payable to “new firm” rather than “old firm.” If you’ve got work in progress at your current firm that isn’t going to get paid until after you leave, you’ll need to work something out with your current firm to split the next milestone payment. They’ll be owed fees for the work done under their banner, and the new firm would too for post-lateral work. But most people would just say “I expect my originations to be X.”

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I think of it as the amount collected. Also just keep in mind that this is an estimate because it is possible that your clients may not decide to follow you to your new firm and/or you might generate more work at your new firm.

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I thought it was the amount of revenue per year that your book generates??

They won't see it as being different since your old firm will be the ones collecting. But firms will certainly care as it relates to your track record and to the extent it's repeatable

When you fill out an LPQ, it is going to ask for all of this.

They want to know amount billed, collected, worked, etc.

Consider the following: if you are billing 10M and collecting 3M, your book is not great because you are giving away 7M of free work. Usually they want to see a collection rate of over 90% of what you are billing.

Additionally, these numbers are somewhat useless in a vacuum. You also need to consider rate. If you are collecting 5M at a rate of 200$/hr, that requires staffing up with a lot of people (~12 people). If you have a partner rate of 1500 & an associate rate of 1000 on that work, that is 2 people working 2000hr/yrs. These are just different models that will result in wildly different comp.

For both of these things, the firm should be asking for a look back: what did you originate in the past 3 years, collect in the past 3 years, what was your rate in the past 3 years (did it change?), etc. Most will basically take these numbers and divide by some amount (there is a chance of losing clients in a move) to estimate what you will bring. Then they’ll guarantee you on that & give you a bonus if you exceed (likely laying out what it would be if you have 100% movements & some other targets).

FWIW, they should also be asking how much of the work is in your area. If you have the book in your practice, you are “self sustaining”. If you are a litigation partner and all of the work is M&A work, they have to give you someone to do all day. And they have to have corporate folks to staff on those matters.

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