Hiring frenzy at London law firms as ‘apex predator’ disrupts market
Partners at London law firms are switching companies at record pace as a surge of investment by American rivals ramps up competition for talent.
According to data provided by legal recruiter, Edwards Gibson, there were 546 partner moves recorded over 2024. This figure is up seven from 510 moves in 2023, and up 14 per cent on the 480 partner moves recorded over 2022.
“The reason… is in large part due to the continued huge investment bets by US law firms,” Edwards Gibson said in a draft report.
Since August 2023, US firms have pumped millions of dollars of additional partner compensation into the market and upended the pay structures of UK firms, causing huge shifts in the capital’s legal sector.
The most significant of these firms in terms of hiring is Paul Weiss – London’s “apex predator” of law firms, according to Gibson. The US-based firm has grown 10-fold across Europe in the past year.
“Our private equity and corporate clients are focused on having elite legal advisers across New York and London,” Neel Sachdev, co-head of the Paul Weiss London office, told the Financial Times. “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.”
Paul Weiss was ranked third by Mergermarket among the top legal advisors on buyout deals in Europe during the first half of 2024, with a 1,115 per cent increase in deal value compared to the first half of 2023.
While Weiss only hired 14 partners this year (taking its total since last August to 28), its hires have had a “multiplying impact” on the market as a whole, as “both peer and near-peer rivals have scrambled to restock by poaching laterals [partner-to-partner hires, rather than junior-to-partner hires] from other firms,” Gibson said.
These hires often came with inflated compensation, the recruitment consultancy added, driving average compensation upward and fuelling pay wars.
The five London-based Magic Circle firms alone – A&O Shearman, Clifford Chance, Freshfields, Linklaters, and Slaughter and May – lost 28 partners to rivals in 2024, the overwhelming majority of which went to more profitable private-equity-led US law firms.
The main focus of the exodus has been debt finance – particularly leveraged finance – as well as corporate M&A and private funds specialists, Gibson said.
The Magic Circle quintet cumulatively hired only 16 partners in London to compensate in 2024. A&O Shearman hired seven, Clifford Chance three, Freshfields five, and Linklaters only one. Slaughter and May neither hired nor lost any laterals.
However, Gibson suggested that the explosion in hiring may be about to cool off, with the economics of star hires “difficult to justify”.
“We are already hearing that there is pushback from some Stateside partners at US firms about the eyewatering costs of recent London recruitment,” the firm said.