Immigration laws are forcing international law firms to advertise jobs alongside retail and fast food companies.
Despite this, the number of international lawyers in London is falling. Where have all the US-qualified lawyers gone?
Browsing through the Jobcentre Plus website throws up a few surprises. Alongside minimum wage jobs at McDonald’s and Argos are choice positions at international law firms. Gibson, Dunn & Crutcher is advertising for a contentious antitrust associate, paying £100,000 – the required candidate must have ‘knowledge of global cartel investigations within the financial services sector’. Meanwhile, Wilmer Cutler Pickering Hale and Dorr (WilmerHale) is looking for a litigation associate and is willing to pay £84,000 for the right candidate with an LLM in Latin American law and ‘a solid understanding of and experience in international arbitration’.
The adverts sit uncomfortably on a site more suited to jobs on the shop floor than at a global law firm. Advertising on these websites is evidence of the changes to immigration laws over the past few years that require firms to jump through bizarre bureaucratic hoops, making it more difficult than ever to bring in internationally qualified lawyers to work in London. But despite all the job ads, our data reveals that the proportion of internationally qualified lawyers working in London is at a ten-year low.
‘The London local market may not be as strong as it was, but it acts as a bridge to the rest of the world.’ – Daniel O’Donnell, Dechert
Overall lawyer headcount at the top 50 international firms in London rose marginally this year. The number is up by 89 lawyers to 4,271, but down from an all time high of 4,444 lawyers back in 2008, and the number of internationally qualified lawyers is disproportionately low.
Our data reveals that back in 2009, non-UK qualified lawyers (the vast majority are US-qualified) made up 25% (552) of the total lawyers at the ten largest international firms in London. By 2011 that had fallen to just 437 (20%) internationally qualified lawyers in total.
Over the longer term, that shift away from international lawyers towards UK solicitors has been even more pronounced. Back in 2002, when LB began the Global London survey (then called the ‘US firms in London’ survey), over 30% of the 2,174 lawyers at the firms were US-qualified. By this year that proportion had fallen to just 21% of all lawyers (see chart on Proportion of international and UK-qualified lawyers GLOBAL LONDON – London Broncos, above).
Turbulence in the global economy has undoubtedly had just as much of an impact on those numbers as have the changes to immigration laws. But more importantly, international firms have realised the advantage of having a strong English law practice and that has meant bulking up by hiring English-qualified lawyers while trimming the US-qualified ranks.
Davis Polk & Wardwell has operated in London since 1972 and currently has 35 lawyers in its office. However, it wasn’t until this year that the firm announced it was launching an English law practice for the very first time. In January, the firm made a splash with the eye-catching hire of capital markets specialist Simon Witty from Freshfields Bruckhaus Deringer.
The firm had been looking for an English lawyer for some time and the opening of an English law office in Brazil expedited the move for Witty. Much of the rationale behind that launch must be that the firm realised it cannot compete on the global stage without English law capability.
‘With the launch of an English law practice in London, we can strengthen our leadership in global securities offerings that we already handle in Europe, Asia and Latin America, and we can expand the services we offer in the UK,’ said Davis Polk managing partner Thomas Reid at the time of Witty’s hire.
‘We’ve advertised a few roles on Jobcentre Plus and had hundreds of applicants. Most are completely unsuitable.’ – HR manager at a major US fi rm in London
This recognition of the importance of English law is a long-term trend that can be seen at fellow transatlantic elite firms that have bulked up their UK law offerings over the past decade.
In 2002, Simpson Thacher & Bartlett had just one English-qualified lawyer in its 31-strong office. By 2011 the white-shoe firm had 36 English solicitors in its 54-lawyer office. And while Sullivan & Cromwell had just ten English lawyers in its 72-lawyer office in 2002, by 2011 it had 20 English lawyers in its 65-strong office. Of the top 50 international firms in London Cravath, Swaine & Moore is now the only firm with no English law capability.
And it is not just Global Elite firms that are cottoning on to the importance of having a critical mass in English law. The recent spate of lateral hires in the funds space, such as a three-partner team that left Clifford Chance for Weil, Gotshal & Manges in June 2011, and the hire of Nigel van Zyl and Oliver Rochman from SJ Berwin by Proskauer Rose in July 2011, is yet further evidence of US firms belatedly bulking up with English-qualified lawyers. (For more in-depth analysis, see feature, ‘Major feast’.)
‘The UK is at the centre of much of what is going on in the rest of the world,’ says Daniel O’Donnell, chief executive of Dechert, who points out the importance of having English law capability to service markets in Russia and Asia. ‘I understand the London local market may not be as strong as it was, but the reason we are here is not so much to serve the local market (although we are not going to turn away FTSE 100 clients) but to participate in the market as a bridge to the rest of the world,’ says O’Donnell.
But the other factor in the decreasing proportion of US-qualified lawyers at international firms is, anecdotally at least, down to changes in immigration laws.
Legislative changes brought in during 2010 mean that firms now have to bring associates and partners who are not from the EU over on the UK Border Agency’s (UKBA) skilled worker or ‘tier 2 visa system’. In order to get a visa for their preferred candidate, firms first have to advertise the job for a month on at least two websites that have been approved by the UKBA. For firms like WilmerHale and Gibson Dunn, that means sticking up a notice on Jobcentre Plus and another more tailored site, such as www.totallylegal.com.
‘We’ve advertised a few roles on Jobcentre Plus and had hundreds of applicants,’ says the HR manager at a major US firm in London. ‘Most are completely unsuitable. We advertised for a junior US-qualified lawyer and from over 50 applications only two were suitable. When we say you have to be qualified at the New York Bar, most think they just need to have worked in an actual bar in New York.’
‘In general the visa situation has had an impact. It’s put a lot of firms off getting lawyers from abroad.’ – James O’Brien, LPA Legal Recruitment
Once firms have jumped through the hoops of advertising on the Jobcentre website, they then have to identify their candidate and start the visa application process, which usually takes a minimum of six to eight weeks. The added bureaucracy and admin seems to have made many firms more cautious about hiring international lawyers.
‘In general the visa situation has had an impact,’ explains James O’Brien, head of private practice at LPA Legal Recruitment. ‘It’s put a lot of firms off getting lawyers from abroad. I’ve had HR managers tell me that the rules have seemed very muddy to them and they didn’t know what was going on, so they don’t want to go through the process of getting visas.’
Vinson & Elkins is another firm that is keen to grow the English law side of its business but has come across visa issues. In 2008, around 40% of the firm’s 23 lawyers in London were internationally qualified, but by 2011 that had fallen to 35% or 16 of its 51 London lawyers.
‘[The visa situation] is more onerous for admin teams, but actually we do not do much relocating of foreign lawyers to London,’ says Alexander Msimang, head of Vinsons’ London office. ‘We want to be a primarily English law practice.’
In April 2010, the government also introduced a cap on the number of skilled workers that could enter the country. While the UK has consistently not met that limit, there is a worry that, once the economy bounces back, the cap could restrict the ability of firms to bring in the international talent they need. While all of this is relatively good news for UK-qualified lawyers, it may mean that there are far fewer US-qualified lawyers in the City over the coming years. But whatever the impact of immigration laws, the biggest driver to the number of US lawyers in London is always going to be client demand.
‘We don’t see it as a split between US and UK-qualified lawyers,’ says Nicholas Buckworth, head of the London office of Shearman & Sterling. ‘We just see it as a demand for services and the primary demand is going to be for English law services. It’s all driven by client demand.’ LB
becky.pritchard@legalease.co.uk