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The New British Invasion: U.S. Law Firms Take Over the U.K.

Get ready for another British Invasion.  Only this time, U.S. law firms are launching an assault on the U.K., fortifying existing London toeholds with American exports, or more commonly, plundering London law firms for top talent, all in an effort to build a competitive advantage in global markets.  As the Times Online quips: 

Wartime GIs in Britain, often caricatured as “overpaid, oversexed and over here”, have a contemporary equivalent: the London managing partners of US law firms, who entice elite City lawyers with seven-figure packages.

Already, U.S. law firms deploy 3,900 lawyers in London.  But the trend towards global law practice has amplified the strategic importance of a London outpost, so U.S. firms are scrambling to build up their ranks.  For example, Cravath, Swaine and Moore just dispatched senior litigation partner John Beerbower to its London office to "enhance the services" that the firm provides to clients based outside of the United States.  Other firms, however, are seeking to grow through an aggressive strategy of enticing top London lawyers with seven figure salaries, the Times article describes:

"Our strategy has been to recruit well-known partners from well-known firms,” Mike Francies, London head at Weil, Gotshal & Manges, says. The former Clifford Chance M&A lawyer, a Watford FC and Zutons fan, is “an incredibly hard worker, who runs a very tight ship”, says one admirer. As relative latecomers, Weil, Gotshal has rapidly grown to 120 lawyers, fueling its drive to become a world leader in private equity. “We already compete with the UK market leaders: Ashurst, Clifford Chance and Freshfields,” Francies says.

Still, there's a limit to what some firms will spend to win the talent wars.  Though Weil, Gotshal spent a substantial amount to capture Marco Compagnoni, the former Lovells' private equity head, the firm's managing partner admits:

There have been people we would have liked where other firms paid more. If you start paying too much, you’re building problems for the future.” He points to Kirkland & Ellis hiring the private equity stars Graham White and Raymond McKeeve -- both from Linklaters -- for packages of £3.5 million and £1.5 million respectively, guaranteed for three years. Kirkland also hired Stephen Gillespie, an Allen & Overy partner, in a reported £1.8 million annual deal. “I can’t see how it works. I’ll be interested to see if they’re all there in three years’ time,” Francies says.

Despite the article's initial derogatory references to the onslaught of "overpaid" American lawyers, at least one U.K. lawyer praised American law firm culture.  Said Kenneth MacRitchie, who's managed Shearman & Sterling's London office since 2003:

“Working for a US law firm is very liberating,” the former Clifford Chance project finance partner says. “The culture is very entrepreneurial. We’ve tried to develop an English law practice that competes with the magic circle. We took some leverage finance partners from Ashursts. We saw that the combination of English law debt finance and New York high yield would be a winner. Our English corporate law practice took off when we hired Peter King from Linklaters.”

Apparently, when the goal is global dominance, resistance is futile -- even for lawyers.

Posted by Carolyn Elefant on January 9, 2008 at 07:35 AM | Permalink | Comments (1)

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