Most foreign law firms targeting the City are stuck in a destructive cycle of hiring and losing partners. Kirkland's James Learner and Graham White argue that a more sophisticated approach is essential

International law firms have been setting up offices in London for decades. Some have left but many have remained. These international firms seem to have adopted two very different strategies for competing in the UK market, the first being solely to service local law needs of existing clients of their home office and to obtain UK referral work, and the second to become a competitor to UK-based local firms. The latter strategy presents the most challenges.

Becoming a real competitor to the top UK law firms requires an international law firm to (a) attract and retain the best quality lawyers (hopefully with a strong client following); (b) obtain the best quality work; and (c) consistently operate at the highest levels. Achieving these three prongs requires a great deal of effort and time. The firm needs to be seen constantly at the top of the legal community to build and retain a reputation that places it among the UK's premier legal services providers.

All top UK law firms have top quality lawyers, but the pool of high quality, highly motivated and well connected legal practitioners is relatively small. For a non-UK-based firm with a limited UK presence or track record to attract a top partner from well-established UK players requires the individual to buy into a vision of the medium and longer-term prospects of the non-UK firm.

merrygoroundConversely, that firm must convince the individual of its medium and long-term vision and commitment to the UK market. Having bought into a vision, the talent needs to see and believe that the vision can be achieved. This can take years, and requires patience to achieve that reality. If you can persuade them to join, it doesn't stop there. You have to make sure they stay.

Lateral hires statistically tend to come and go, usually to another international law firm, in a never-ending merry-go-round. Failure to achieve a vision (which, more often than not, happens because similarly well respected practitioners are unwilling to buy into the vision and themselves make the jump to the international firm and help it to make the vision a reality) seems to be the underlying and principal reason. In many respects, the success (or failure) of international law firms in the UK is self-perpetuating.

International law firms need time to establish themselves. It takes years to get the right team of people in terms of experience, ability, breadth and scale. 'International head offices' need to understand that particular truism: give encouragement, independence and breathing space. A lack of support or – even worse – uninformed meddling in a local practice is a recipe for disaster.

Leadership is critical. A non-UK-based law firm's international practice must not be headed solely by expatriates. A significant expat presence in a UK office is vital to act as a bridge to the rest of the network, but it takes proper local law operations and senior local personnel who have management input alongside the expats to become effective and establish a genuine presence in the UK market.

If you can attract the best talent, they invariably need to be involved in the most interesting matters. It helps if they have client relationships already in London. It is critical to the success of a local office that a large majority of the work coming into the office is derived from local relationships.

This will provide the office with a stable and strong local market presence that will allow it to take advantage of opportunities presented by firm institutional clients in the local market. Once the work comes in the door, the client relationships must always be closely watched.

As mentioned, laterals tend to come and go. The vicious circle of lawyers coming and going with no consistent client contact kills any relationship. Top UK law firms tend to hunt in large client teams. One or two leaving that team has little, if any, effect. International law firms are by and large much smaller, with an exponentially larger negative effect on client relationships if one or two key individuals decide to depart. The key is to attract and retain the best and most talented individuals with the right, complementary skillsets and to allow the practice to continually to build until it reaches a critical, stable mass.

Coming back to effective competition, there is little point in an international firm setting up in London with the ultimate goal of challenging the magic circle for primacy in every practice area. They need to choose their battlegrounds carefully and stick with them. Challenging local firms on every front will likely never work. But after choosing the battleground and successfully hiring and retaining the best people, where does an international law firm go? Do they stick to their strong but limited focus or pushing on, expanding as far as they can into new areas of practice?

We think the answer is the former. A firm should stick closely to its strengths. Sure, it can expand to support existing areas and supplement them with new and needed expertise, but to plough on to take on the magic circle across the board is folly. Even if ultimately successful, it could take decades. That is a time when your eye is off the ball, fighting a fight that is not core to the firm's long-term strategy.

Slow, steady supplemental expansion is best. Don't erupt into a spate of mergers. Slowly get the right people. Clients want the right people with the right depth of expertise and support rather than a merger between diverse practices from different geographies and competing (if not clashing) cultures, values and key practice areas.

James Learner and Graham White are corporate partners at Kirkland & Ellis' London office.