The recent news that Kirkland & Ellis is set to launch in Paris with the hire of two Linklaters partners is just the latest example of the firm’s much-heralded decisiveness when it comes to recruitment.
Over the past year, the firm has been picking off some of the top private equity talent on both sides of the Atlantic—including Freshfields Bruckhaus Deringer heavyweight David Higgins and Latham & Watkins practice leader Jennifer Perkins. But the move into Paris is particularly notable given that outside of London, Kirkland has to date had just one continental European base: its 15-partner Munich office, which opened in 2004.
Private equity partners say that the attraction of key European financial centers such as Paris is only likely to increase as the impact of Brexit takes hold.
“It will happen more because of Brexit. Firms will be looking to do private equity on a more local basis rather than doing it from London,” said White & Case global and EMEA private equity head Ian Bagshaw. “The old London model is becoming less relevant as time goes on.”
Weil, Gotshal & Manges Paris corporate partner David Aknin agrees that Brexit could raise questions about whether firms have the requisite coverage across Europe. “London has been the financial center of Europe until now—the question is: is this old model of working from only London still sustainable? If Brexit happens, the answer will be no,” he said.
The Linklaters partner duo joining Kirkland—Vincent Ponsonnaille and Laurent Victor-Michel—will launch the new office after Kirkland receives approval from the Paris Bar Association, joining a market that already boasts a line-up of international firms with well-established private equity practices, including Latham & Watkins, Linklaters, Clifford Chance, Willkie Farr & Gallagher, White & Case and Weil.
The arrival of more international entrants is also likely to have a knock-on effect for domestic firms reliant on referral work from international allies. “Domestic firms tend to have relationships with U.S. firms who don’t have a presence in Paris, because they get work from them sent to be done locally,” Aknin says. “But if the U.S. firms move there, this could all change—everyone is going to have to adjust to the new perimeter.”
Kirkland is well-versed in plucking top talent from rival firms to build its brand, and partners expect it to take the same approach in the French capital—potentially putting leading French firms such as Bredin Prat, Gide, AyacheSalama and De Pardieu Brocas Maffei at risk.
“There probably will be some firms in trouble—Kirkland isn’t going to settle with just two partners,” Bagshaw said. “They will want more corporate partners coming in. But it’s not that big a market, so they will have to take talent from other French firms.”
As Brexit moves ever-closer, and London’s status as Europe’s financial center faces growing uncertainty, all eyes will now be on Paris to see which international firms will make the move next—and who else Kirkland will snap up for its new base.
“Outside of London, the private equity market is much smaller, so it shakes it up more when something like this happens,” Bagshaw said. “It will act as a catalyst for firms to reassess their position in the market, to think where their strengths lie, and for people to re-evaluate whether they’re in the right place.”