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A record number of senior lawyers moved jobs in London this year as the arrival of US law firms in the capital continues to disrupt the market and fuel pay wars for talent.
Law firms made 546 partner hires in London over the year to December 23, according to data from legal recruiter Edwards Gibson and shared with the Financial Times. The number surpasses last year’s record of 514 partner moves, as investment from US law firms in the UK shows no sign of abating.
The London legal market has undergone major disruption in recent years as a booming private equity market has driven the significant expansion of profitable American law firms in the City. Deep-pocketed US firms have lured partners from their UK-headquartered rivals, and increasingly, from their US peers.
The UK’s “magic circle” group of firms, which includes Linklaters, Freshfields, A&O Shearman and Clifford Chance, have been particularly affected, losing a record 28 partners this year, according to the data, surpassing the previous record of 19.
The war for talent has driven changes to firms’ pay structures as they fight to attract and retain rainmakers and more junior talent. Groups such as Clifford Chance and America’s Latham & Watkins recently added more flexibility to their own models in order to be able to better reward top performers, according to people familiar with those moves. Both firms declined to comment.
“Unprecedented investment by US law firms in private equity-related hires has pumped scores of millions of dollars into the system,” said Scott Gibson, founder of Edwards Gibson. “This has distorted the market by causing compensation to spike and creating huge knock-on effects down the chain as hapless rivals have scrambled to restock.”
US-founded firms Kirkland & Ellis and Paul, Weiss, Rifkind, Wharton & Garrison were among the biggest recruiters in 2024, according to the data, which includes 155 lawyers that have moved from non-partnership roles to partner.
Over the past year, Paul Weiss has sought to rapidly build up its London presence and has grown 10-fold across Europe, including by opening an office in Brussels, to cater to US private equity clients on the continent.
“Our private equity and corporate clients are focused on having elite legal advisers across New York and London,” said Neel Sachdev, co-head of the Paul Weiss London office. “Many firms are seeking to replicate growth in London as it is a key legal market for M&A and capital markets and a gateway to Europe.”
Some UK-headquartered mid-tier firms have also benefited from the churn, as larger firms pull out of less profitable practice areas, such as lower-value routine work for financial services firms.
Simmons & Simmons has hired 16 new partners this year, according to the data, making it the second biggest recruiter in 2024.
“The impact of the US firms is very significant and you see some firms have decided that they are committing themselves to a particular profit target. That is driving some of their strategies and they can’t afford to advise in certain areas of the market any more,” said Jeremy Hoyland, Simmons & Simmons managing partner.
“Some of the partners we’re speaking to aren’t feeling quite as loved as they maybe used to,” he added.
The hiring frenzy has led to raids on a number of top outfits; Latham & Watkins and Linklaters have seen some of the largest numbers of departures.
Latham lost eight of its 13 partner departures to Sidley Austin this year, while Linklaters has also seen a number of departures for US peers. Latham’s London managing partner Ed Barnett said the capital “has been a strategic priority for decades” and the firm “had an incredibly strong year”. Linklaters declined to comment.
While not all exits would be viewed as losses, the eye-watering pay packages on offer to partners were hard to compete with, said Charlie Harvey, founder of legal recruiter Harvey and Partners.
“We have worked with law firm partners in the London market who have doubled or tripled their compensation when moving,” said Harvey. “We see no signs of lateral partner hiring slowing down as we move into 2025.”