There is an often misquoted line in the 1989 sports fantasy movie Field of Dreams where the main protagonist, Ray Kinsella, hears a mystical voice telling him to build a baseball diamond in the cornfields of his Iowa farm, regardless of the financial consequences – 'If you build it, he will come.'

In this context, 'he' refers to deceased baseball great 'Shoeless' Joe Jackson. Against his better judgement, Kinsella builds the field – and is appropriately rewarded when Jackson and other long-dead legends of America's pastime gather to stage one final game.

For the 60-plus US firms that have built a noteworthy presence in London, many are keen to show that the work they do out of London is sourced by clients that have come to them since the construction of their City empires. Sixty-eight percent of respondents in the latest Legal Week survey of US firms in London claim more than half of their London work is sourced from UK clients – rather than the London office serving as a place to deal with transatlantic referrals.

However, US firms have shown an appetite for continued expansion in the City without always being able to demonstrate the work to back up those ambitions.

"There is a real danger for firms that follow the argument that 'if we build it, they will come'," warns the London managing partner of one leading US firm. "You have to think very carefully about how you can fulfil an area not already being filled by a UK firm and [identify] where there is a real need for people to come in.

"I am sure every firm has thought through its own strategy very thoroughly, but I am in no doubt that targeting your practice is the way to go. You move outside the areas for which there is real demand among clients at your peril."

Yet after a period of relative quiet, the last 18 months have seen a pronounced return of the high-profile partner hire, with a string of major appointments demonstrating the willingness of some US competitors to splash the cash on marquee names.

Hire and hire

Among the most eye-catching appointments was the widely-trailed defection of Lovells private equity head Marco Compagnoni to Weil Gotshal & Manges. News of the move broke in February, further reinforcing Weil Gotshal's position at the forefront of the European venture capital market, although the firm was subsequently hit with a double partner loss to the City office of Philadelphia firm Dechert.

Lovells itself saw a further two partners exit at the beginning of the year, with Latham & Watkins hiring the firm's head of international tax Daniel Friel and tax partner Sean Finn. A number of US firms have been on the hunt for UK tax teams this year, to support growing corporate practices. "It is an area that is not the easiest to recruit in," says Latham managing partner Andrew Moyle.

Kirkland & Ellis was also on the hunt for private equity expertise, in March luring Linklaters partners Graham White and Raymond McKeeve and, in so doing, demonstrating that even average partner profits of more than £1m do not safeguard UK firms from losing senior talent to ambitious US rivals.

The Chicago giant hit the headlines again a month later when it subsequently tempted leveraged finance heavyweight Stephen Gillespie from Allen & Overy (A&O) – the firm which suffered most publicly at the hands of US aggressors.

That loss continued a run of departures from the magic circle giant over the past 18 months, with US firms invariably their destination.

Last autumn, heavyweight leveraged finance head Tony Keal quit for the City arm of Wall Street royalty Simpson Thacher & Bartlett.

Fellow leveraged finance partner Clive Wells quit the firm for Skadden Arps Slate Meagher & Flom; while corporate partner Vanessa Blackmore was the surprise hire chosen to launch a long-awaited UK corporate offering for elite Manhattan firm Sullivan & Cromwell. Corporate partner Michael McDonald also moved on, opting in May to join the City arm of international M&A leader Cleary Gottlieb Steen & Hamilton.

For whom the bellwether tolls

It has also been a mixed year for Shearman & Sterling, a firm traditionally regarded as the benchmark for the progress of US firms in London. Senior M&A partner Jonathan Coppin quit the firm over the summer to join Hogan & Hartson, while last November, former Ashurst corporate partner Adrian Knight decamped to Skadden. Finance partner Stephen Peppiatt was the latest to head for the doors, last month confirming a move to the local arm of US restructuring leader Bingham McCutchen.

"Shearman has been relatively quiet," says one London chief of a leading US firm. "Firms hire people on big-money guarantees and, if the business is not there when the guarantees run out, [departures are] what happens."

"There definitely seems to be a loss of momentum," agrees the London managing partner of another rival US firm.

However, Shearman has looked to fight back with a series of hires of its own, adding Lovells competition partner Matthew Readings to its ranks at the turn of the year and also moving to reinvigorate its depleted corporate practice with the eye-catching hire of respected Norton Rose M&A specialist Lawrence Levy.

US firms have also profited from the continued managerial ruthlessness on display at some traditional City leaders, with Shearman and LeBoeuf Lamb Greene & MacRae among those to gain from widely-publicised changes to the pension scheme at Freshfields Bruckhaus Deringer. This month former Freshfields co-head of dispute resolution Jo Rickard moved to Shearman, while the Manhattan-based LeBoeuf picked up three City partners in a week from the magic circle giant in real estate and environmental law, as well as an arbitration partner in Paris.

Grow your own way

The US firms' expansionary mood is set to continue, according to the findings of this year's Legal Week survey of US firms in London, which finds all but a handful of firms vowing to boost the lawyer head-count of their UK operations over the course of the next 12 months.

Indeed, 80% of respondent firms are expecting double-digit growth in headcount over the next 12 months, reflecting an increase on last year's figure of 73%.

However, despite the explosion of transactional activity over the last 12 months, with the UK and continental Europe enjoying a boom in big-ticket M&A not seen since the late 1990s and with corporate buyers having joined private equity investors at the table, ambition in terms of growth and launching new practice areas remains limited.

More than half (55%) of respondent firms predict modest expansion, with the number of fee earners in their City offices expected to grow by 10%-25%.

Just 12% of US firms participating in the survey anticipate growth of more than 50% in the year ahead, although this does reflect a slight climb from the 2005 poll, when 10% of respondent firms predicted expansion by more than 50%.

The figures indicate that few major US players are set to dramatically ramp up their UK offerings, preferring instead to concentrate on consolidation of their existing position and selective hiring to boost turnover.

San Francisco giant Orrick Herrington & Sutcliffe, which in May 2005 boosted its City presence after taking on much of the local arm of the dissolving Coudert Brothers, is among those firms again pledging significant growth, looking to boost its headcount by 50%-75%.

The San Francisco firm this month confirmed it had entered talks over a possible mega-merger with New York firm Dewey Ballantine – a tie-up which would, if successful, also see the two firms' London arms combine to form a 25-partner offering boasting more than 75 fee earners in total.

Reed Smith, far from a stranger to the UK market after its merger with Warner Cranston in 2001, will again see its headcount rise dramatically from 1 January, 2007, thanks to its upcoming merger with Richards Butler – a deal which ended the mid-tier City firm's lengthy hunt for a US merger partner.

Cleveland-based firm Squire Sanders & Dempsey is another firm plotting major growth – between 50% and 75% – in the wake of its acquisition in March of the London and Frankfurt offices of defunct German giant Haarmann Hemmelrath. The firm says it would consider a future merger with a UK firm as one way of achieving this significant expansion.

Of course, targeted hires are not the only way to expand a practice – or even the most rapid. Last year, just under a third (29%) of respondent firms indicated a willingness to consider a merger with a UK partner.

This year, with the deal that created DLA Piper still fresh in lawyers' minds and the Reed Smith-Richards Butler union set to go ahead next year, that proportion rises to 39%, subject to the customary caveats about 'cultural fit' and 'strategic synergies'.

Those contrasting merger deals – one characterised by its flexible attitude to what constitutes a genuine merger and the other by its eagerness to embrace full financial integration – demonstrate that firms are finding their own ways to tackle familiar questions.

Similarly, the findings of the poll suggest that the UK market is proving a harder nut to crack than some advisers had previously imagined.

Moving target

While the transactional boom appears not to have translated into a desire for rapid expansion among US advisers, it is unsurprising that further penetration in the corporate deal market remains the primary goal for many US firms in London.

Almost two-thirds of those firms that expressed a target area singled out corporate or M&A as areas for planned expansion over the coming 12 months, representing almost half of all respondents.

Akin Gump Strauss Hauer & Feld and Gibson Dunn & Crutcher are among those firms looking to ramp up in corporate.

Finance is a priority for firms including Hogan & Hartson – whose hire of Coppin from Shearman added to a roster already boosted by the hire of veteran Lovells competition partner John Pheasant in January – Bingham and Dewey, while Dorsey & Whitney intends to pursue the so-called 'twin engine' approach so successful in the US by planning investment in corporate and litigation.

Private equity, which has seen as much activity – both transactional and in terms of hires – as any other sector, remains high on the agenda for firms including Dechert, King & Spalding, Squire Sanders and, naturally, Weil Gotshal.

A new direction

While expansion is a recurring theme for US advisers, just 10% of respondent firms are intending to launch a new practice area in the City over the next 12 months.

By contrast, almost two-thirds (63%) are determined to concentrate on existing areas of expertise and explicitly rule out any expansion into new areas of UK law over the year ahead.

A further 10% adopt a more opportunistic stance – that presumably depends on the availability of suitable partners from domestic or US rivals – and do not rule out the launch of a new practice area, indicating a degree of strategic flexibility not always associated with US firms in the UK.

Hogan and Orrick both signal plans to launch an offering in intellectual property (IP), while Richmond-based firm Hunton & Williams, which has made a number of City partner hires over the last two years, has further plans to branch out into tax, environmental law, real estate and property finance.

Chicago firm Winston & Strawn is among those firms currently considering a launch into new practice areas in the year ahead, with IP and insolvency cited as possible areas for new investment. The firm certainly has room for expansion after last month's departures of former Barlow Lyde & Gilbert duo Graham Wedlake and Neil James, leaving the top 30 US firm with just four partners in its London base.

Investment funds specialist Schulte Roth & Zabel, meanwhile, is mulling over an assault on the super-competitive UK private equity market, as well as a possible launch in securities law.

Grass roots

Certainly those firms that have to date concentrated on US securities law would do well to diversify into UK law, with Sarbanes-Oxley a potent deterrent for clients that would previously have looked to list in the US – although de-listings have provided a lucrative, if necessarily finite, supply of work for some advisers.

While almost two-thirds (61%) of respondent firms to provide figures suggest that more than half of their work in the City is now sourced within the UK – including more than a quarter (26%) who claim more than three-quarters of their work is UK-originated – that figure actually represents a drop from the previous year's mark of 71%.

Practices suggesting more than three-quarters of their London work is UK-sourced include Bingham, Philadelphia firm Duane Morris, Kirkland and Latham and fellow Los Angeles giant O'Melveny & Myers.

Train and retain

Yet how far US firms can progress without demonstrating sustained organic growth remains to be seen.

"As much as we love our laterals, our preference is to promote home-grown partners," insists one senior City partner with a US firm, who says "cherry-picking a few stars to get you going" can be only the starting point for a truly ambitious firm. "It would be interesting to see how many firms have been making up their own [home-grown] partners. For many [US] firms it is about now that that process should be happening."

Yet the difficulty of making partner at a US firm in London remains a major factor in punishing attrition rates prevalent across many US advisers.

Just over half (51%) of respondent firms now take on trainees in their London arms, nudging up from last year's figure of 49%. Latham, Hogan & Hartson, Morrison & Foerster and Paul Hastings all launched formal trainee programmes this month. "Taking on trainees is a sign of the maturity of the office," claims Latham's Andrew Moyle.

"As US firms here grow up, it is part of their evolution to lose senior people at associate level," argues one partner, who insists that while bumper US salaries are "influential" in luring trainees, the opportunity to work on the major international deals is another key factor. "Sometimes there is too much emphasis on the term 'partner'. It is not so much losing people to other [law] firms but losing them to other areas of business like private equity houses and hedge funds – places where they can be part-lawyer, part business people."

Some firms, for example Kirkland & Ellis, argue that by having a much shorter track to partnership (and necessarily letting associates know their chances of partnership earlier on in their career then at many City firms) career choices are made simpler. Either you are up to it or you are not – rather than acting as wall-filler for years.

While question marks remain over the ability of US firms to retain the best up-and-coming talent over a number of years, there are few surprises as to the largest recruiters.

The long-established White & Case – by far the largest US firm in London by fee earners – is accord-ingly the heaviest single recruiter of UK trainees among US firms in the City, taking on 25-30 trainees a year.

Shearman and two firms to have already secured UK mergers – Kirkpatrick & Lockhart Nicholson Graham and Dechert – each take on around 15 UK trainees per year, while Latham, LeBouef and Weil Gotshal are also significant recruiters, each expecting to take on around 10 trainees this year.

Certainly, recruitment at the junior end of the profession continues to be a key battleground between US firms and the UK's commercial elite. While City giants have struggled to retain associates in recent years, with A&O among those firms making high-profile attempts to address internal concerns over work-life balance and the difficulty of attaining partnership, the difficulties are arguably even more pronounced among US challengers.

It may be that those US firms intent on a serious challenge to the UK's commercial elite are soon addressing similar issues themselves, with less emphasis on the marquee partner hire.

Certainly, doubts remain over whether 'counsel' and 'senior attorney' titles will prove sufficient to persuade the best young UK lawyers to forego aspirations of partnership.

However, a heavyweight US firm promoting half a dozen home-grown partners in London would really make the City sit up and take note.