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Previous Issues of Lateral Partner Moves
London Law Firm Assistants Salary and Bonus Trends and Predictions 2014/2015
A summary of the legal recruitment market and assistant lawyer salaries and bonuses 2014/2015.
Compensation Packages for Expat US Lawyers in London – ‘COLAs’ Explained
Familiarise yourself with COLAs.
The In-House Triumph over Law Firms - A Pyrrhic victory?
A discussion on how GCs have secured a short-term advantage over their external advisers.
The NQ Lawyer Salary War Hots Up
Slaughter and May raise NQ salary to £70,000.
Lateral Partner Moves in London
Welcome to the latest round-up of lateral partner moves in the legal market from Edwards Gibson; where we look back at announced partner-level recruitment activity in London over the past two months and give you a ‘who’s moved where’ update.
With law firms having to rapidly adjust to the economic challenges thrown up by COVID-19, their cash-conservation strategies have so far ranged from capital calls, drawing deferrals, rent reductions, pay-cuts and promotion/hire freezes (to name but a few). Although there have so far been mercifully few redundancies, with the UK government already tapering furlough payments, which are due to end completely in October 2020, it is likely many more firms will instigate formal or informal redundancy programmes over the next quarter.
Against this backdrop it is unsurprising that at the half-year point, the number of partner moves (195) is down more than a fifth on the statistical average (244) for the same January–June period last year.
Nevertheless, a complex picture appears to be developing. On the one hand, despite elevated caution around lateral partner hires, the picture for transactional lawyers is likely still flattered by a lag effect reflecting processes which were in advanced stages, prior to the impact of COVID-19. Against this, expectations of a pending boom in COVID-induced workflow - such as disputes and restructuring - along with potential “bargains” to be had from disruption-induced voluntary and involuntary movement of partners (including perhaps the odd émigré returning from a beleaguered Hong Kong), has boosted lateral numbers which may explain why, in the past two months, the number of laterals (61) is down only 14% on the same period last year (71).
Top partner recruiters in London May – June 2020
CMS Cameron McKenna 4
Addleshaw Goddard 3
Morgan Lewis 3
Squire Patton Boggs 3
In addition, a further eight firms: DAC Beachcroft, DLA Piper, Greenwoods GRM, Hogan Lovells, Hunton Andrews Kurth, Linklaters, McDermott Will & Emery and Ropes & Gray hired two partners-a-piece.
Also of note in this edition
- 21% of all laterals were non-partners moving into partnership;
- Four US headquartered firms: Faegre Drinker, Latham & Watkins, Paul Hastings and Ropes & Gray hired laterals whose practices were primarily restructuring or insolvency related.
Lateral hire market outlook
In our March-April 2020 edition we painted a bleak prognosis for the lateral recruitment market due to the economic impact of a COVID induced global recession. Nevertheless, we pointed out that the fall in London lateral recruitment will be mitigated by two main factors:
- Disruption induced voluntary and involuntary movement of partners/teams. May 2020 saw the collapse of Top 100 UK firm McMillan Williams. Whilst that firm is unlikely to have produced many individuals or teams to have whetted Big Law’s appetite, if the current global GDP projections prove accurate, it is probable that many more mid-tier law firms will collapse and/or, in the case of some US headquartered law firms, close loss-making London operations over the next 12-24 months. This will inevitably enable other firms to opportunistically cherry-pick from the resulting flotsam and jetsam at a discount. Moreover, whilst most law firm partners – even those who are likely to be very busy – will probably see their compensation fall over the next 12-24 months, in many instances busy, profitable, teams will not want to be tied to an underperforming law firm – particularly one which requires a significant increase in capital contributions. Equally, many law firms will themselves shed underperforming partners (and practices) who will resurface at new homes.
- An increase in COVID-induced workflow. Most employment and property litigation specialists have reported sharply increased utilization rates. More significantly, a host of matters - from fraud and anti-trust to complex refinancings, as well as sustained elevation in English law governed disputes - are likely to arise from a combination of hastily drafted legislation allied to the foreseen and unforeseen impacts of COVID-19 on virtually every major economic actor in the Western world. More obviously, restructuring/insolvency partners - who were already finding themselves de rigueur prior to COVID-19 - are likely to become increasingly sought after as the lock-down induced economic shock waves increasingly find their mark. If law firms are unable to re-tool their existing resources in time to take advantage of the above, they will need to hire laterally.
One interesting question posed at the start of the COVID-19 crisis was whether, due to lockdown restrictions in London and New York, traditional “Big Law” firms would ever hire lawyers into their partnerships without ever actually physically meeting them. Having now completed assignments on that basis, Edwards Gibson can testify that, whilst entirely virtual lateral recruitment certainly has its challenges, for the right candidate, they can, and they will.
Please do not hesitate to contact us if you would like to discuss this article or any other aspect of the market in more depth.
Please click here to understand our methodology for compiling Partner Moves
The Edwards Gibson Team