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.
Despite the number of partner moves recorded in this edition (72) being 32% lower than the 106 we recorded this time last year, the 5-year statistical average for the same period shows a more modest reduction of 13% – hardly chipper but in many respects surprisingly robust given the UK has experienced its sharpest economic contraction in 300 years.
The most prolific hirer in this edition was Goodwin Procter, which nabbed a half-dozen partners, including a five-partner private equity team from fellow US firm Sidley, closely followed by Stephenson Harwood which welcomed five laterals, all in different practice areas.
Top partner recruiters in London September – October 2020
|Mishcon De Reya||3|
Three of New York’s finest snatched magic circle partners in their prime; the normally überconservative Cahill Gordon & Reindel and Simpson Thacher & Bartlett both made their third lateral hires of 2020, the former completing its hat-trick of Allen & Overy finance partners, and the latter nabbing a financial services regulatory partner from Clifford Chance. However, the most high-profile individual move over the period was Skadden’s poaching of Freshfields Bruckhaus Deringer’s co-head of global M&A: Bruce Embley.
October also saw the launch of magic circle scion Bott Van Kesteren - a finance boutique launched by two Linklaters émigrés.
Also of note in this edition
- Three firms hired partners from in-house: Addleshaws (Dragon Oil), Dentons (Lloyds Bank) and Wilson Sonsini (Checkout.com);
- 32% of all moves were non-partners moving into partnership;
- Six firms - Berkeley Rowe, Brown Rudnick, Mayer Brown, Mishcon de Reya, Osborne Clarke and Stephenson Harwood - hired laterals whose practices were primarily restructuring or insolvency-related.
Lateral hire market outlook
Europe has now entered its second full lockdown and, in the absence of an effective COVID vaccine, appears to face the possibility of ongoing rolling lockdowns for the foreseeable future. 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 would be mitigated by two main factors:
- Disruption-induced voluntary and involuntary movement of partners/teams. This was borne out in May 2020 with 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, it is probable that many more mid-tier law firms will collapse and/or, in the case of some US-headquartered law firms, close lossmaking London operations over the next 12-18 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 antitrust 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 COVID19 - have become increasingly sought after as the lockdown-induced economic shock waves have found their mark. Law firms unable to re-tool their existing resources in time to take advantage of the above will need to hire laterally.
Added to the above, the anaemic state of the global economy means that, for the foreseeable future, interest rates will remain ultra-low in much of the Western World forcing yield-hungry investors to continue to pump money into private equity and its “high risk” scions - which increasingly includes litigation funding. All of which is good news for many Big Law firms in the medium term… that is of course until increasingly weary tax-payers force cash-strapped governments to change the rules.
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.
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