Hiring is the key to capital gains

Catrin Griffiths

This week we publish our annual survey of the top 30 international firms in London. Until now ‘international’ has been a bit of a euphemism, since historically the firms in our survey have always been American. This year, though, the terminology is correct. Straight in at number 20 is Australia-listed Slater & Gordon, which appears in our table following its takeover of Russell Jones & Walker in 2012. 

Strictly speaking, S&G is more of an international firm in the North West than it is in London, despite its hefty Chancery Lane premises; after the acquisitions of Pannone and Fentons, this is an Aussie firm with a distinctly Mancunian accent.

S&G is in a minority in the top 30 in another way. Very few are the product of international mergers. Of the top 10 on our list, three are there through acquisitions: Reed Smith (which took over first Warner Cranston and then Richards Butler), Mayer Brown (which took over Rowe & Maw) and Squire Sanders (which took over Hammonds). Those firms took over substantial UK practices with deep roots. Inevitably, these hybrid firms figure strongly in the top 30 by revenue.

But look further down the list and you’ll see that expansion hasn’t come simply on the basis of mergers. Out of the top 30 as a whole, only eight firms are in London by way of acquisition; the others are Dechert, Jones Day, K&L Gates, S&G and Edwards Wildman

Of course, our table does not include DLA Piper and Hogan Lovells; their joint HQ structures make them different beasts from the US-led hybrid practices featured here.

What is clear from the list is that the vast bulk of the top US firms in London have grown organically, a strategy that has kept headhunters very busy – and very happy. These firms’ growth in the capital has pushed up the asking price for corporate and finance lawyers and helped consolidate partner profit as the key metric of mobility. 

Of the organically-driven US firms, Latham was the most prolific hirer in 2013. It has historically had considerable success in bedding in recruits; from pretty much a standing start in 2000 it is now the biggest firm by turnover in the Top 30 table and its London revenue matches the likes
of Macfarlanes and Wragge & Co. Looks like it never needed that’s a serious growth trajectory.