US firms in London are losing their pulling power as the number of UK partners moving from US firms back into UK firms continues to increase. According to a Garfield Robbins Inter-national survey, which questioned more than 300 partners who had changed firm in the last two years, 7 per cent had decided to return to a UK firm.
In the latter half of the 1990s, the trend was for UK partners to join the incoming wave of US firms. But now the tide is turning and partners are opting to head back.
Recent high-profile moves include Nigel Weiss, who moved from Mayer Brown (now Mayer Brown Rowe & Maw) to Denton Wilde Sapte; Lawrence Bruce, who left Buchanan Ingersoll for Field Fisher Waterhouse; Christine de Ferrars Green, who joined Mills & Reeve from Coudert Brothers; and Ian Johnson, who moved from Orrick Herrington & Sutcliffe to DLA.
The survey, which was compiled in conjunction with The Lawyer, suggests a number of reasons behind the resurgent appeal of UK firms. The UK firms have been focusing on raising profitability in order to reduce the traditional profit gap between UK firms and their US rivals; and given the economic climate, the perceived stability of a home-grown firm has been given as a reason to return to a UK firm.
In addition to these factors, partners cited the belief that the size of some US firms in London limits the opportunity to win the biggest and best deals, and that they preferred being part of a main office rather than an overseas outpost. Weiss, who moved to Dentons in February 2001, said: “Certainly, one of the factors was being able to provide a full service to clients. You’re able to win better work.”
Johnson, who moved to DLA in March 2001, agreed. “It was frustrating not being able to offer a full range of services,” he said. “Another reason for me was international – and in particular European – presence, where I think the US firms are still a bit behind.”
However, James Chester-man, a UK partner at US firm Latham & Watkins, disagreed. “We just did the mezzanine funding on the e3.6bn (£2.27bn) bid by Kohlberg Kravis & Roberts to acquire Legrand from Schneider Electric, which is one of the biggest buyouts in Europe. I just don’t think it’s true that you don’t get big deals at US firms,” he said. “You have to distinguish between the US firms that have really built up a European presence and the others. There are different business models.”
One partner at a US firm was more cynical about the fresh appeal of UK firms. He argued that when US firms were on their initial recruiting spree in the 1990s, some offered pay guarantees for a fixed period to accommodate partners building up a practice. Once that term had ended, the inference is that those partners found their compensation suffered and so the security of a lockstep beckoned.
Aside from the US-UK dilemma, the main motivation behind changing firm was the new firm’s ability to support and expand the practice. This, followed by firm culture and reputation, were the top three responses, chosen by more than half the respondents.
Andrea Grossman, managing director of Garfield Robbins, said: “The last few years have seen a number of dramatic changes in the UK legal market, with perhaps the most significant being the unprecedented number of partners deciding to move to a new firm to support and develop their practice. Clearly, firms aren’t recognising the frustrations felt by some partners by an inability to develop their practice at the rate, or in the direction, that they’d like.”
Comments from respondents make the same point. Having made the move, 79 per cent said their new firm did not effectively sell their capability to the firm’s existing clients; while 41 per cent thought their new firm was not effective at selling its services to their clients.
The majority of partners moved between firms of a similar size. The largest group, at 15 per cent of the total partners surveyed, consisted of partners moving from one medium-sized UK firm to another, while 12 per cent switched between firms with 75 partners or more. Downsizing was a key motivator as 25 per cent moved to firms with fewer partners.
|Lawyer moves 2000-2002|
|Type of move||Percentage|
|UK firm 30-75 partners to UK firm 30-75 partners||15|
|UK firm 75+ partners to UK firm 75+ partners||12|
|UK firm 75+ partners to UK firm less than 30 partners||11|
|UK firm 75+ partners to UK firm 30-75 partners||9|
|UK firm 30-75 partners to UK firm less than 30 partners||5|
|UK firm less than 30 partners to UK firm less than 30 partners||5|
|US firm to UK firm 75+ partners||5|
|UK firm 75+ partners to US firm||4|
|UK firm 30-75 partners to UK firm 75+ partners||4|
|UK firm less than 30 partners to UK firm 75+ partners||4|
|UK firm less than 30 partners to UK firm 30-75 partners||3|
|US firm to US firm||3|
|UK firm less than 30 partners to multidisciplinary partnership||3|
|UK firm 30-75 partners to US firm||3|
|US firm to UK firm less than 30 partners||2|
|Source: Garfield Robbins International UK Lateral Partner Hire Survey 2002|