Striking numbers abound in this year’s Global London table, if you are into that kind of thing. The three pace-setting US brands in London – Latham & Watkins, Kirkland & Ellis and White & Case – are all generating in the $300m region in the Square Mile, last year saw the first $10m lateral and my back-of-the-envelope scribbling indicates that the top 50 US firms are pulling in around $5bn in the UK.
The market is increasingly now defined by this trio, predictably so in the case of Latham, though City lawyers are still trying to get their heads around the idea of Kirkland and White & Case as mounting a frontal challenge. A few years ago, I’d have been equally sceptical, particularly in the latter’s case, but if there is a glaring hole in the game plan of these two outfits, they are hiding it well. With all three making ground in mainstream transactional work through 2017 and securing significant hires – the idea that certain kinds of M&A will remain the preserve of City advisers over the next three years looks fanciful.
As we went to press Kirkland was expected to soon confirm that it has become the second global law firm after Latham to crack $3bn, with another hike in partner profits that will give it further ammunition for London. Kirkland’s average partner profits for 2017 hit $4.75m, which suggests plateau earnings of more than $12m. And one arbitrator in London at another firm is reputed to have been recently paid considerably north of that figure. The equation of elite law is shifting and faster than many veteran partners can keep up.
Aside from the select group mounting a broad challenge, there are obviously high quality brands like Quinn Emanuel Urquhart & Sullivan and Simpson Thacher & Bartlett that have forged highly productive operations with lean teams in defined areas.
It is a more mixed picture over the top 50 and there is plenty of drift and inertia across the group – yes, Shearman & Sterling, we are looking at you. Many of the more generalist attempts to create US-owned practices continue to lack momentum.
But the overall direction of travel is clear – US firms are making more inroads and have so far proved remarkably sanguine about the Brexit shadow looming over London. It was another robust year of lateral recruitment, even during a period in which the largest US-born firms are now very active promoters of their own UK partners.
The upbeat assessment by US law firms may well be linked to the fact that areas and clients currently driving their growth – white collar, funds, arbitration, leverage finance – are less impacted by Brexit. Yet chairing a client debate this month, there was certainly a much more downbeat tone on the implications for the City and UK investment of leaving the EU. But Brexit aside, US firms in London are now a one-way-bet.