Despite a recent overhaul of its partnership to reward top performers, Freshfields Bruckhaus Deringer has lost private equity heavyweight David Higgins to Kirkland & Ellis in one of the most expensive lateral hires ever in the City.
Higgins is set to join the US law firm as London co-managing partner in a deal worth around $10m a year, in one of the most significant UK departures ever from an elite London law firm. He will sit alongside finance playmaker Stephen Lucas on Kirkland’s core executive committee as its second London-based member.
Jeffrey Hammes, chairman of Kirkland, said: ‘Continued investment in our European business is a key strategic focus for the firm. David brings a combination of business leadership, commercial awareness and experience on top tier transactions which will enable us to continue to develop our European private equity platform.’
The announcement comes a few weeks after partners at Freshfields voted in favour of radical changes to the firm’s lockstep pay model aimed at hiking remuneration for top performers.
The move hands the Magic Circle firm more ammunition to retain top performers but did not stop one of its most prominent names in the City leaving for a US rival. Higgins had been widely touted internally to be in line for a 60-point deal under the shake-up, making him one of the few London-based partners to earn over the new 12-40 point ‘core’ ladder for most partners.
The 48-year old Higgins has long been viewed as a trophy hire for a number of US firms investing heavily in Europe’s booming private equity markets, reflecting the huge success of Freshfields’ top tier buyout team. Latham & Watkins was seen as a likely home for him. Latham, however, insisted that no discussions have been held.
The Kirkland deal is worth $10m annually, putting Higgins near the top of its equity structure and making it one of the most expensive lateral hires ever in Europe’s legal market. The deal is not, however, structured as a multi-year guarantee.
Freshfields partner Simon Marchant insisted in a statement that ‘the strength and depth of our private equity practice across M&A, leveraged finance, high yield and real estate is second to none’ and ‘David’s departure does not change that’. He added: ‘We are grateful for David’s contributions over his time with us and wish him well in his new role.’
While there will be relief that as yet Higgins has not departed alongside colleagues, any further losses in the Freshfields team, especially of playmakers like Adrian Maguire and Charles Hayes, would be a body blow to the firm. As it is, the departure of Higgins caps off a year to forget for the City giant marked by poor financial results and a high profile shake-up of its c-suite.
For Kirkland the move brings in a heavyweight M&A hand to complement its muscular London leveraged finance practice. Said one Kirkland partner: ‘We don’t hire people looking for a pension plan, this is a guy with the will to win; we don’t buy business, we are buying quality DNA.’ The departure also underlines the dramatic inroads being made in the City by more profitable US advisers, particularly in private equity, leveraged finance and funds.
For more see Legal Business’s recent analysis of Freshfields shake-up of its partnership and our recent cover feature on the partners quitting the Magic Circle for US rivals (£)