The largest U.S. law firms in London added some 500 lawyers to their U.K. ranks last year, making more than 100 lateral partner hires as the weaker pound and the King & Wood Mallesons (KWM) collapse helped the group ramp up their presence there.
Between them, the 50 largest U.S. firms with U.K. law practices added 109 new partners in London during 2017, up marginally over the previous year.
Research by The American Lawyer’s U.K. affiliate Legal Week, which excludes the trans-Atlantic vereins DLA Piper, Norton Rose Fulbright and Hogan Lovells, shows that the group now houses more than 1,500 partners and almost 3,500 additional lawyers between them.
Four U.S. firms—White & Case, Baker McKenzie, Reed Smith and Latham & Watkins—each have more than 300 lawyers in London with another two—Kirkland & Ellis and Jones Day—housing at least 200 apiece.
Three firms—Reed Smith, White & Case and Baker McKenzie—had at least 100 partners when the data was collated on Jan. 1 of this year, with Kirkland, Mayer Brown and Latham not far behind with at least 74 partners each.
As a comparison, London-based stalwarts Macfarlanes and Travers Smith both had fewer than 90 partners during the last U.K. financial year, while no more than 10 partners separate Reed Smith and White & Case’s London partner head counts from Slaughter and May’s figure of 115 last year.
While the sheer scale that some of these firms have now achieved in London may make for depressing reading for some U.K. rivals, the research shows much of their partner-level hiring was driven by the collapse of KWM’s European arm last January.
Four of the U.S. firms making the most London lateral hires during the 2017 calendar year—Reed Smith (13), Goodwin Procter (nine), Greenberg Traurig (seven) and Covington & Burling (six)—all benefited from the implosion of the legacy SJ Berwin business, adding large teams of KWM lawyers as they found new homes.
Seven of Goodwin’s nine lateral partner hires in 2017 joined from KWM, including funds partner Michael Halford, with this recruitment helping the U.S. firm more than double its lawyer count in London from 37 to 77.
“We have had a great 12 months of rapid growth in London, both in terms of the addition of senior new hires and in terms of growing our existing key franchises in real estate and private equity,” said Goodwin London co-chair Samantha Lake Coghlan. “The year has also seen us add talent in technology and life science, new areas of focus for us in Europe, but which are practice areas where we have a leading position in the U.S. The European expansion underlines our commitment to be best in class across four major business verticals. We expect this rapid growth to continue this year and beyond.”
Similarly, Greenberg achieved the second highest year-on-year growth thanks in part to six partners and a number of other lawyers joining from KWM to increase its London lawyer count by nearly 66 percent, to 76.
“The London market is key to Greenberg’s global platform. The level of talent and clients in the market allow us to continue our path of strategic growth, without resorting to mergers or vereins, and the results speak for themselves,” said firm executive chairman Richard Rosenbaum. ”I am particularly impressed by how well [former name partner] Paul Maher has adapted. Last year, he took his name off the door some years after founding the office, and while continuing to work closely with me on London strategy, became a vice chairman of the global firm.”
In total, partners from the failed KWM business accounted for 35 of all of the lateral hires in London by the group of U.S. firms, equaling just under a third of all partner-to-partner level moves across the group.
Even without the boost in hires related to KWM’s collapse, U.S. firms made a number of high-profile Magic Circle hires, including Patrick Sarch moving from Clifford Chance to White & Case, Ed Barnett switching from Allen & Overy to Latham, and Ben Spiers leaving Freshfields for Kirkland.
However, many of the year’s standout lateral hires were between U.S. rivals, with hunters just as likely to find themselves the prey.
Roughly a quarter of all of last year’s hires (27) were between rival U.S. firms. Standout examples in this group include private equity partner Richard Youle’s move from White & Case to Skadden, Arps, Slate, Meagher & Flom, while Latham brought in two partners from Quinn Emanuel Urquhart & Sullivan.
A number of U.S. firms, including Ropes & Gray and Mayer Brown, saw partners jump to rivals and their London lawyer count shrink last year.
Ropes, for example, saw lawyer count drop 18 percent, from 129 to 106 during 2017, after departures that included restructuring partner James Douglas to Linklaters and finance duo Mark Wesseldine and Fergus Wheeler to King & Spalding. Other firms that saw lawyer count drop year-on-year included Arnold & Porter, Simpson Thacher & Bartlett, Mayer Brown, and Shearman & Sterling—all of which saw declines of between 9 percent and 12 percent.
Latham and Kirkland, however, continued to set themselves apart from many of their rivals, despite Kirkland seeing a number of partner departures of its own.
Both saw double-digit increases in London lawyer count during 2017, and both now have London revenues that far outstrip many U.K. top 50 firms. Kirkland, the smaller of the two in London, with 217 lawyers, compared with Latham’s 335, reportedly made about 10 percent of its record-breaking 2017 global revenue figure in London—equaling about $315 million (£233 million).
Vassos Georgiadis, founder and managing director of Melton Legal, said U.S. firms continued strong growth in London in 2017 thanks to the lateral recruitment market.
“The collapse of KWM was the single largest event fueling this, but across the board, the first and second division U.K. firms continued to lose partners to the U.S. firms, with very few coming the other direction,” he said. ”We expect 2018-19 to see more moves to U.S. firms, notwithstanding steps from some of the principal U.K. firms to revamp their remuneration systems to prevent star partners leaving for financial reasons.”
Leanne Clark, managing director of Fox Rodney Search, noted that a lot of U.S. firms are looking for the same expertise in similar practices, such as leveraged finance and private equity. And she noted that U.S. firms are getting a lot of coverage in the press for high-profile cases, such as Gibson, Dunn & Crutcher’s role on the competition side of the Asda-Sainsbury’s merger.
“Winning roles on big-ticket work like this demonstrates their credibility in the U.K. market and attracts attention from partners looking to move,” she said. “The continued trend of Magic Circle lateral moves to leading U.S. firms is interesting. As a number of the Magic Circle firms change their lockstep culture and increase performance management, driven partners are less likely to see the move to a more merit-based U.S. firm as such a significant change,”
Top five fastest-growing U.S. firms in London in 2017
- Goodwin — up 108.1 percent from 37 lawyers to 77
- Greenberg Traurig — up 65.2 percent from 46 lawyers to 76
- Kirkland & Ellis — up 28.4 percent from 169 lawyers to 217
- Quinn Emanuel — up 27.5 percent from 51 lawyers to 65
- Winston & Strawn — up 24 percent from 25 lawyers to 31
Top five U.S. firms in London by lateral hiring activity in 2017
- Reed Smith — 13
- Goodwin — 9
- Greenberg Traurig — 7
- Covington & Burling — 6
- Latham & Watkins — 6
Top five U.S. firms by London lawyer count as of January 2018
- Baker McKenzie — 384
- White & Case — 370
- Latham & Watkins — 335
- Reed Smith — 317
- Kirkland & Ellis — 217