Prior to joining Lloyds in March last year, Stainsby was head of group litigation and regulatory counsel at HBOS.
She re-joins Herbert Smith having originally joined as a trainee in 1997. Her start date is yet to be finalised.
Stainsby’s focus will be on regulatory and litigation work in the banking and insurance sectors.
Martyn Hopper, head of Herbert Smith’s FSR team, said: “We’re as delighted to welcome Jenny back to the fold as we were sorry to lose her when she left to join HBOS.
“She’s a very talented lawyer and her in-house experience has given her a specialist understanding of what retail financial institutions seek from their legal advisers that few of our competitors have at partner level.
“With the current focus of regulators on retail markets and products, her recruitment is also very timely.”