New York's legal elite this week reaffirmed its challenge to the top City firms as Shearman & Sterling secured a magic circle partner to launch its UK tax practice, while Skadden Arps Slate Meagher & Flom raided Lovells for its first senior banking hire.

Allen & Overy (A&O) partner Michael McGowan resigned from the firm on Monday (19 November) to join Shearmans' London office, becoming only the third partner to leave the City giant's London base for a rival.

McGowan's appointment comes after a year of negotiation and secures Shearmans its long-awaited UK law tax practice – seen as a key support area for US firms hoping to crack the top end City transactional market. He is currently negotiating his departure date with A&O.

McGowan, who was made a partner in 1997, becomes the third magic circle partner to join Shearmans' City office, following the appointment of A&O securitisation specialist Marke Raines in 2000 and Clifford Chance competition partner Chris Bright in May this year.

Meanwhile, on Monday, Lovells partner Mark Darley confirmed that he is to leave the City firm to launch a UK finance practice for Shearmans' New York rival Skaddens Arps, becoming the firm's seventh UK-qualified partner.

"Lovells is a fantastic firm, but the opportunity offered by Skadden Arps was a once in a lifetime chance," Darley told Legal Week.

The appointments provide dramatic evidence that US firms have yet to scale back investment in their rapidly growing European law practices, despite a wave of cutbacks announced this year in the wake of slowing US corporate activity.

Expectations of US cuts in London were heightened this month when Shearmans, generally regarded as the most successful US-owned City practice, announced a number of junior redundancies in its London, Frankfurt and Asian practices (Legal Week, 15 November).

Shearmans' London head Kenneth MacRitchie said: "No-one should doubt our commitment to keep expanding our English law capabilities until Shearmans has the premier English/New York law M&A and finance practice of any of the global law firms."

Shearmans now has 11 UK-qualified and 10 US-qualified partners in the City.
Skadden Arps refused to comment.