Sullivan & Cromwell is looking to capitalise on the growth in London capital markets work by building an English law corporate practice.
The new strategy was launched last week with the hire of Allen & Overy (A&O) corporate partner Vanessa Blackmore.
Sullivan's London office has included English lawyers since 1999, with the current strength at 12 lawyers, around 20 per cent of the total number of the firm's lawyers in the City. Until now, however, the capability has been limited to project, acquisition and leveraged finance. With the emergence of London as the destination of choice for main market listings, the firm is now looking to broaden its local capability.
As London managing partner Bill Plapinger put it: "We didn't have someone with the versatility to do M&A or capital markets, so in that sense it's an extension of what we do."
Plapinger said the US had "definitely become a less friendly place" for listings, primarily because of the regulatory changes. And the trend has been accelerated by the adoption of the Sarbanes-Oxley Act, he added.
Plapinger said, in addition to a desire to increase its share of capital markets work, the hire of Blackmore was also a response to client demand for wider general expertise on deals out of London. He said clients had been looking for advice on English law matters on aspects of deals where Sullivan lacked local expertise. "Therefore it made sense to hire an English law corporate partner," he said.
Plapinger added that it was Blackmore's range of skills that had made her right for Sullivan. "I think, at the largest English firms these days, the degree of specialisation is not compatible with the way we do things at Sullivan & Cromwell," he said. "We want lawyers who practise across a broad range of areas, and Vanessa has the ability to advise on equity capital markets, debt capital markets, M&A and private equity."
Sullivan is also recruiting associates to bring the practice group up to the firm's typical corporate leverage of 3:1.
Blackmore's move coincides with an exodus of heavy-hitting UK partners to US firms. Recent mega-moves have included Marco Compagnoni and Jonathan Wood joining Weil Gotshal & Manges from Lovells, and Graham White and Ray McKeeve leaving Linklaters for Kirkland & Ellis. The latter were promptly followed by Stephen Gillespie from Blackmore's old firm A&O.
As Richard Ziegler, a recruitment consultant at EJ Legal, put it: "The US firms in London are getting more and more established and this current trend just confirms that."
Not all hires are the same, however. Blackmore is unlikely to bring a book of business to Sullivan and is not considered a star in the league of Gillespie. However, she will still be considered a catch by dint of her cachet as a magic circle partner.
"The top US firms will only let certain lawyers through the door," says Taylor Root director Sloane Poulton. "A partner might not bring much business but could still be a prestigious hire if they come from the magic circle."
The current movers are also unlikely to be simply hunting for more money. Indeed, as Scott Gibson of consultancy Hughes-Castell put it, the increase in new listings work in London and Europe may well result in the larger UK firms becoming more competitive with their US counterparts in terms of profit.
"It's interesting to see people still going to the US when the UK firms' competitiveness is likely to increase over the next few years," said Gibson.