Legal Business recently published its 14th Annual Global London Survey, wherein it assessed the progress of the London practices of leading U.S. law firms during 2015.
The Survey highlights that the growth in U.S. firms in the City has been primarily led through the recruitment of English, and increasingly Irish, qualified lawyers. The Survey reveals that out of the 50 largest international firms established in London, 4,955 of the 5,953 total fee-earners, are English or Irish qualified lawyers, amounting to 83% of all fee-earners employed. Total headcount was up 21% from the previous annual Survey. Partner headcount has had an equally striking rise of 20% over the year, to a record high of 1,677.
Overall headcount increases can, in part, be explained by the addition of three global players to the market: Dentons, King & Wood Malleson (KWM) and Squire Patton Boggs.
It is worth noting the phenomenal growth of 6 firms in particular – Akin Gump Strauss Hauer & Feld, Caldwalader Wickersham & Taft, King & Spalding, Milbank Tweed Hadley & McCloy, Paul Hasting and Simpson Thatcher & Bartlett, who have each doubled their headcount in the past 5 years.
Unsurprisingly, the vast majority of lateral hires went into Corporate and Finance departments, in that order, followed by recruitment into Dispute Resolution and Real Estate, which tended to constitute minority practices for many of the surveyed firms.
Change in Headcount between 2014 and 2015
The figures for the annual change in numbers reflect the continued growth of many of the newer additions to the market, with a minor decease in headcount among some of the more established players. Outside of the figures represented on the graph, according the Survey, between 2014 and 2015, Dechert’s headcount dropped by 9%, Reed Smith’s by 6% and Baker & McKenzie’s by 2%.
Change in Headcount between 2010 and 2015
The addition of new entrants to the market explains much of the striking change in the five-year growth figures (2010 – 2015) evident in the Survey. Lower down the pack there was a noticeable decrease in numbers, with 11 international firms witnessing a shrinking London footprint, McDermott Will & Emery, Gide Loyrette Nouel and McGuireWoods dropping by 27%, 16% and 8% respectively.
For virtually all of the major U.S. firms, the growth of their London practices appears to be a major strategic aim. While many of the more established firms, and those that have subsumed existing English practices, have continued, augmented or commenced their internal trainee programmes, there remains a significant lateral recruitment appetite among U.S. firms for English and Irish qualified lawyers, particularly those with a corporate or finance background.
The growing internationalisation of transactional work, and a greater recognition of cross jurisdictional legal qualifications, has greatly expanded the potential candidate pool. While candidates from Magic Circle, Silver Circle or premier Irish firms, tend to be particularly sought after, many U.S. firms have demonstrated a willingness to look beyond this traditional candidate base, in an effort to address the current squeeze on legal talent.
The market leading salaries offered by most U.S. firms, as well as the international dimension to the majority of work undertaken, continues to drive candidate appetite for roles with U.S. firms in London.
As the market becomes less homogeneous, and with the traditional dominance of many domestic firms increasingly being challenged, the demand for quality candidates, from those law firms originating on both sides of the Atlantic, shows no sign of abating.