Legal Business Blogs

After the party – market slowdown pushes US leaders to take stock in London

The easy narrative is that the party is over. After years of rapid expansion by international law firms in London, 2023 saw lawyer headcount at Global London firms inch up by just 1.8% – a figure which appears to provide confirmation that the City interlopers are finally starting to apply the brakes in London as deal volumes dry up.

And that narrative does bear up to scrutiny – to an extent. Last year more than half of the 50 Global London firms saw headcount in the capital flatline or decrease, and across the largest ten, combined headcount fell by 1%, with big firms such as White & Case, Baker McKenzie and Reed Smith all seeing London lawyer count dip.

But while 2023’s relative stagnation is way down on last year’s equivalent overall growth of 9% – not to mention the pre-pandemic highs of 15% – the overall stats do mask the trends within the trends.

Almost a third of the Global London firms still managed to increase London lawyer count by a double-digit percentage last year. The standout among that group is of course Paul Weiss, which announced its long-awaited English law debut last summer, and by 1 January 2024 had already more than doubled partner count on the same date the previous year, with much more growth following since.

Last year more than half of the 50 Global London firms saw headcount in the capital flatline or decrease.

Other firms notably thumbing their noses at the market slowdown include Paul Hastings, which boosted London equity partner count by almost a third during 2023 with hires across finance, funds and infrastructure, including Linklaters duo Jessamy Gallagher and Stuart Rowson.

Elsewhere, Milbank swooped in to complete the long-rumoured acquisition of Dickson Minto’s private equity-focused London office, while Cleary – historically one of the most conservative US players in London – grew its London partnership by 25% with hires in M&A, private equity and restructuring, a move which partners described as ‘a turning point’ for the office.

Such moves point towards a trend of quality over quantity, with US firms increasingly sharpening their focus on narrower, more lucrative areas of expertise and tailoring their recruitment accordingly.

On that point, Paul Weiss chair Brad Karp says his firm had been waiting for some time for ‘partners with the requisite talent and market reputation’, arguing that the legal market has become ‘a star system, with clients increasingly hiring star lawyers, as opposed to law firms’ for their most consequential matters.

And while his firm has delivered on that front by attracting some of the biggest names in the City, what has passed with less fanfare has been the simultaneous arrival of an army of junior lawyers, with the Soho base already close to a headcount of 150 lawyers, and on its way to a target of 200 by the end of 2024 – a number which would place the firm comfortably among the top 20 largest Global London firms.

Such recruitment not only underlines the ambitions of Paul Weiss in London – it also demonstrates the resources required to service premium global clients demanding a broader global platform from their advisers. And so for Global London firms, while the party may have quietened down, the savviest firms are ensuring they are ready for the music to begin again.

See our full Global London report.