Source: Financial Times
By Gabe Friedman, Bloomberg Big Law Business
In the months after Britains voted to exit the European Union, a cloud settled over London: Hundreds of U.K. lawyers registered to practice in Ireland, and questions arose about whether London would hold on to its status as a major global financial center.
But as lawyers paused to contemplate the consequences of the Brexit vote, something funny happened: Other lawyers rushed forward to invest in the market.
In recent months, there’s been a surge of lateral movement, particularly from U.S. firms looking to grow their presence in London, which has been coupled with a raft of proposed or contemplated law firm combinations.
“Post-Brexit, many U.S. firms paused to reflect on what Brexit might mean, they basically paused to say, ‘Do we want to go to London?’” said Kent Zimmermann, a legal consultant.
“After that pause, many firms said, ‘you know what? London is an important market regardless of how Brexit plays out,’” he said.
The result was that many firms saw a ‘buying opportunity’ in London: U.K. lawyers, who polls showed were overwhelmingly against the Brexit vote, are likely to look favorably at joining an international firm — as a hedge against exiting the European Union, said Zimmermann.
Meanwhile, U.S. firms continue to see London as an ideal legal market where attorneys command high rates and think now is the time to expand there while the market is not overvalued.
Thus since Brexit, there has been a spate of activity:
In the past 30 days, there have been two proposed mergers announced: The combination of Atlanta’s 400-lawyer Sutherland Asbill & Brennan with the U.K.’s 1,900-lawyer Eversheds; and also the proposed tie up between Houston’s 20-lawyer Legge, Farrow, Kimmitt, McGrath & Brown, with the London-based 450-lawyer Holman Fenwick Willan.
Eversheds had been among the firms whose solicitors have been registering for Ireland’s law society in record numbers during the past year, according to one account.
The break up of the European and Middle East arm of King & Wood Mallesons has been centered in the U.K. with the old S.J. Berwin unit being pursued by a number of law firms including Dentons.
Addleshaw Goddard is in long simmering talks with the U.S. firm Hunton & Williams.
Meanwhile, the lateral market has been firing off:
Sidley Austin has been actively growing its London office. In the past month, it’s hired two capital markets lawyers, and a bankruptcy expert, building off its hire earlier this year, in March, of 10 private equity lawyers from Kirkland & Ellis.
Goodwin Procter hired four partners from KWM last month, according to The Lawyer.
Akin Gump, Squire Patton Boggs, Mayer Brown and Arnold & Porter were among the firms that made lateral hires last week.
“It’s just a very active market at the moment,” said Seamus Hoar, a recruiter with Major Lindsey & Africa.
One reason why U.S. firms have been successful at growing is that some Magic Circle firms have been slower to jettison lockstep pay models, Hoar said.
Read more of this feature at Bloomberg Big Law Business.