Lateral partner hiring by U.S. firms in London fell to its lowest level since 2004 last year, according to new research from Legal Week.
A survey of hiring trends at the London operations of 37 of the biggest U.S. and trans-Atlantic firms found there were just 59 lateral partner moves in 2009, with many firms shying away from expansion against the backdrop of the global recession.
The figure represents a significant decline on 2008 recruitment levels when there were 77 lateral partner hires. That tally was the highest since the 2005 peak of 80 hires.
The drop is even more marked if Greenberg Traurig Maher is removed from the equation, since the new London entrant -- which launched in the City in June 2009 -- was responsible for a quarter of all of the partner hires by U.S. firms in the City. Without Greenberg's 15 partner appointments there were just 44 new hires across all of the firms -- level with the 2004 figure.
Greenberg London head Paul Maher, who joined with a team from Mayer Brown, said: "There is clearly an increasing emphasis on having a portable business and I wonder whether that is instinctively driving the lateral market down because so many firms have institutionalized their client base.
"Last year the market was economically tough, but for a new entrant like us we probably hit it at the right time."
Other active firms included Mayer Brown and Reed Smith, which made five laterals apiece.
Despite the drop in hiring, overall partner numbers across the firms remained broadly static, with 1,014 London-based partners in January 2010 compared with 1,031 in 2009.
In contrast, associate headcount took a dive across the board during 2009, with overall numbers dipping from 2,536 to 2,214 by January 2010.
White & Case, which made a number of redundancies globally including some in London, reduced its non-partner fee earner headcount by 57 over the year. Dewey & LeBoeuf shrank its non-partner headcount by 20 during 2009.
Commenting on the headcount trends, Dewey's firmwide chairman, Steve Davis, told Legal Week: "Some clients are more resistant than they have been in the past to law firms fielding large teams on transactions. This suggests a longer-term shift in how law firms staff matters and may not lead to a significant uptick in hiring."
White & Case London head Oliver Brettle added: "I think we will see firms pursuing high-margin work with smaller teams with broader areas of expertise and less of a focus on leverage. As far as law firms focusing on City work are concerned, the days of having associates over-specialize in one small area have gone."
For more news, commentary and analysis on the international legal market, visit LegalWeek.com.