Law: US law firms swoop on the UK
American practices are hiring some of the best local talent to help them set up in London. Catrin Griffith reports
Wednesday 12 June 1996
Although Allen is the highest-profile defector to the Americans, he is just one of many recent hirings. White & Case has recruited Margaret Cole, a Stephenson Harwood banking litigator, and John Bellhouse, a McKenna & Co construction-arbitration partner. Skadden Arps took Theodore Goddard's young corporate star, Michael Hatchard, while Chicago-based Sidley & Austin lured Clifford Chance's telecoms partner, John Edwards. They were followed by three banking/securitisation hires: Cameron Markby Hewitt's Graham Penn and Howard Waterman, plus Simmons & Simmons's Jane Borrows.
US firms in London fall into three categories: those that won't consider hiring UK-qualified lawyers in the near future, those that are considering it, and those that are already doing it.
Won't do it
Long established in London, four companies make up much of Wall Street's so-called white-shoe elite: Sullivan & Cromwell, Davis Polk & Wardwell, Cravath Swaine & Moore, and Simpson Thacher & Bartlett. All enjoy cosy referral relationships with many of the leading City practices, despite the fact that Clifford Chance and Allen & Overy have themselves been hiring US lawyers.
Typical work: representing underwriters in major UK and European privatisations involving global equity offerings with a US tranche, or US advice on mega- mergers and acquisitions such as Glaxo/ Wellcome and Rentokil/BET.
Typical comment: "We serve clients by reaching out to those London firms which are best able to deal with a particular UK problem" (David Brownwood, Cravath).
Typical profits per partner: massive. Average profits per partner at Cravath in 1994 were pounds 817,000; at Sullivan & Cromwell they were pounds 790,000.
Prospects: rosy. Hugely profitable, these firms have a virtual lock on work from the major Wall Street investment banks.
Might do it
Not all of the Wall Street elite have rejected the idea of developing a UK practice. It would make perfect sense for firms like Cleary Gottlieb, Steen & Hamilton and Shearman & Sterling to recruit UK lawyers; both have local practices in Frankfurt and Paris. Also considering the possibility is Debevoise & Plimpton, while Rogers & Wells does not rule it out entirely.
Typical work: similar to that of the Wall Street firms above, centred on securities and international financing, but also with a strong European telecoms element.
Typical comment: "We have a strong European commitment. Just as English firms are trying to build up their US practice, we will be building up the UK side," (Ed Greene, Cleary Gottlieb).
Typical profits per partner: huge. These firms have the financial muscle to seduce UK lawyers - Clearys averaged pounds 590,000 in 1994, while Shearman & Sterling averaged pounds 417,000.
Prospects: couple Wall Street clout with proven international success, and you have some serious City contenders, should they decide to go for it.
Already doing it
The fastest-growing group of all, these firms have identified UK law as an essential part of a European and global practice. Newest on the scene are Dewey Ballantine, which broke off its association with City firm Theodore Goddard in April, and Chadbourne & Park, which hit the headlines, with its offer of up to pounds 700,000 for project finance partners.
Typical work: varies, but mostly project finance (where UK law is increasingly required) and general banking and securities. Milbank Tweed has revamped its project-finance presence since it poached Ken MacRitchie and Nick Buckworth from Clifford Chance. The other major player is White & Case.
There are other niches, too: White & Case has been developing a litigation and arbitration presence in London to tie in with its arbitration practices in Paris and Stockholm. LeBoeuf Lamb Greene & MacRae has 17 lawyers advising on insurance work.
Typical comment: "It's become very much easier to recruit. Good people want to be rewarded for their merit" (Margaret Cole, White & Case).
Typical profits per partner: variable, but hovering around City levels. Skadden Arps averaged pounds 547,000 in 1994, with White & Case on pounds 370,000 and Weil Gotshal on pounds 467,000. Many of these firms do not have a lockstep where partner earnings are tied to seniority; instead, partners are remunerated according to merit, which may be a help in recruitment.
Prospects: Milbank Tweed, White & Case, Skadden Arps and Mayer Brown are all taken seriously in project-finance circles, while banking lawyers are watching Weil Gotshal like hawks. The jury is still out on new entrants such as Sonnenschein Nath & Rosenthal, Dewey Ballantine, and Chadbourne & Park.
All profit-per-partner figures in the article are taken from the AmLaw 100.
The writer is editor of `Legal Business'.
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