US law firms are increasingly influencing London's legal landscape, introducing the cutthroat hiring strategies familiar in their native market.
The contest between US and º£½ÇÊÓƵ firms has escalated of late, with stateside entities pouring significant investment into the capital's legal scene, as reported by .
Data from legal recruitment specialist Edwards Gibson shows a 7% increase in partner moves to 546 in 2024 compared to 2023, with a 14% rise from 2022 figures, as US outfits lure leading talent.
The report from Edwards Gibson cited "the continued huge investment bets by US law firms" as a primary driver behind this trend.
High-profile movements include Neel Sachdev's headline-grabbing switch to Paul, Weiss from Kirkland & Ellis last year, commanding a remarkable $20m deal. Sachdev's arrival at Paul, Weiss catalysed bold tactics within the firm, successfully attracting an impressive influx of 200 lawyers to their London office.
Talking to City AM, Christopher Clark, who holds a directorial position at Definitum Search commented, "This year has seen a surge in partner recruitment, mergers and acquisitions have picked up significantly, with litigation and investigations also keeping pace."
He noted that law firms are vigorously executing lateral expansion plans and increasing 'speculative hires.'
According to insights from Legal Cheek, the leading website for legal news in the º£½ÇÊÓƵ, American firms' London branches have clinched top spots in their profit per equity partner (PEP) rankings, outshining competitors.
Equity partners at Kirkland & Ellis are reportedly earning up to £6.1m annually, with Paul, Weiss partners following closely behind at £5.1m. "Compensation has significantly increased as the war for talent heats up, if you’re not paying top of market you’ll be left behind," Clark commented.
The legal sector is a vital part of London's economy, contributing £37bn in 2023, equivalent to 1.6 per cent of the real gross value added, according to TheCityº£½ÇÊÓƵ.
Cash is king
Even junior US firms are demonstrating their financial muscle. Earlier this year, Quinn Emanuel raised its starting salary for London lawyers to £180,000, reigniting the pay war for newly-qualified (NQ) lawyers.
Ria Karnik, managing director at Major, Lindsey & Africa, told City AM that the salary battle shows no signs of slowing down. "We could potentially be heading into what may turn out to be another busy year, or an even busier one," she said.
If the market continues on this trajectory, it will "spark another pay war, which US firms are well positioned to handle—perhaps even better than others," she explained.
Karnik also noted, "It’s become increasingly clear that lawyers are the new bankers". In December, first-year associates at US law firms in the City received hefty bonuses ranging from $10,000 (£8,000) to $15,000 (£12,000), with those in their fifth year receiving up to $90,000 (£72,000).
English lawyers push into US market
While US firms continue to hold sway in the º£½ÇÊÓƵ legal market, some British firms are setting their sights on the American market.
The most eagerly awaited merger in the legal sector was finalised in May, with º£½ÇÊÓƵ magic circle firm Allen & Overy (A&O) and US firm Shearman & Sterling merging into one colossal entity.
Earlier this month, London-based law firm DAC Beachcroft announced its expansion into the US, with offices planned in New York and Los Angeles.
Magic circle firm Linklaters attributed its latest results, which saw its revenue exceed the £2bn mark for the first time, to its US expansion into New York and Washington DC.
