Unlock the Editor’s Digest without cost
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.
A report variety of senior attorneys moved jobs in London this 12 months because the arrival of US legislation companies within the capital continues to disrupt the market and gasoline pay wars for expertise.
Regulation companies made 546 accomplice hires in London over the 12 months to December 23, in keeping with information from authorized recruiter Edwards Gibson and shared with the Monetary Occasions. The quantity surpasses final 12 months’s report of 514 accomplice strikes, as funding from US legislation companies within the UK exhibits no signal of abating.
The London authorized market has undergone main disruption lately as a booming personal fairness market has pushed the numerous growth of worthwhile American legislation companies within the Metropolis. Deep-pocketed US companies have lured companions from their UK-headquartered rivals and, more and more, from their US friends.
The UK’s “magic circle” group of companies, which incorporates Linklaters, Freshfields, A&O Shearman and Clifford Likelihood, have been notably affected, dropping a report 28 companions this 12 months, in keeping with the information, surpassing the earlier report of 19.
The warfare for expertise has pushed modifications to companies’ pay buildings as they struggle to draw and retain rainmakers and extra junior expertise. Teams similar to Clifford Likelihood and America’s Latham & Watkins not too long ago added extra flexibility to their very own fashions so as to have the ability to higher reward prime performers, in keeping with individuals acquainted with these strikes. Each companies declined to remark.
“Unprecedented funding by US legislation companies in personal equity-related hires has pumped scores of hundreds of thousands of {dollars} into the system,” mentioned Scott Gibson, founding father of Edwards Gibson. “This has distorted the market by inflicting compensation to spike and creating enormous knock-on results down the chain as hapless rivals have scrambled to restock.”
US-founded companies Kirkland & Ellis and Paul, Weiss, Rifkind, Wharton & Garrison had been among the many largest recruiters in 2024, in keeping with the information, which incorporates 155 attorneys which have moved from non-partnership roles to accomplice.
Over the previous 12 months, Paul Weiss has sought to quickly construct up its London presence and has grown 10-fold throughout Europe, together with by opening an workplace in Brussels, to cater to US personal fairness shoppers on the continent.
“Our personal fairness and company shoppers are targeted on having elite authorized advisers throughout New York and London,” mentioned Neel Sachdev, co-head of the Paul Weiss London workplace. “Many companies are looking for to copy development in London as it’s a key authorized marketplace for M&A and capital markets and a gateway to Europe.”
Some UK-headquartered mid-tier companies have additionally benefited from the churn, as bigger companies pull out of much less worthwhile apply areas, similar to lower-value routine work for monetary companies companies.
Simmons & Simmons has employed 16 new companions this 12 months, in keeping with the information, making it the second largest recruiter in 2024.
“The affect of the US companies may be very vital and also you see some companies have determined that they’re committing themselves to a specific revenue goal. That’s driving a few of their methods and so they can’t afford to advise in sure areas of the market any extra,” mentioned Jeremy Hoyland, Simmons & Simmons managing accomplice.
“Among the companions we’re talking to aren’t feeling fairly as beloved as they possibly used to,” he added.
The hiring frenzy has led to raids on various prime outfits; Latham & Watkins and Linklaters have seen among the largest numbers of exits.
Latham misplaced eight of its 13 accomplice departures to Sidley Austin this 12 months, whereas Linklaters has additionally seen various departures for US friends. Latham’s London managing accomplice Ed Barnett mentioned the capital “has been a strategic precedence for many years” and the agency “had an extremely robust 12 months”. Linklaters declined to remark.
Whereas not all exits could be considered as losses, the eye-watering pay packages on provide to companions had been laborious to compete with, mentioned Charlie Harvey, founding father of authorized recruiter Harvey and Companions.
“We’ve labored with legislation agency companions within the London market who’ve doubled or tripled their compensation when shifting,” mentioned Harvey. “We see no indicators of lateral accomplice hiring slowing down as we transfer into 2025.”
