Allen & Overy (A&O) is to open its second office in the US, with the firm launching in Washington DC next month through a team hire from O'Melveny & Myers.

The launch comes as magic circle rival Linklaters plans its own entrance to the US capital within the next year, at which point all of the magic circle bar Slaughter and May would have a presence in Washington.

It is understood that Linklaters is planning to open in Washington within the next 12 months. The firm declined to comment but it is believed New York competition partners Jeffrey Schmidt and Thomas McGrath could relocate to Washington if the firm does go ahead with a launch.

One Linklaters partner said: "Relocation [to Washington] would make sense for the two partners. They are currently travelling back and forth relentlessly and a launch in the regulatory capital of the world is inevitable for the firm."

A&O announced yesterday (29 June) that is due to open in Washington on 18 July, with the hire of two financial regulatory partners from O'Melveny and the relocation of US banking head David Slade from New York, who will become office managing partner.

Partners Barbara Stettner and Chris Salter, and Charles Borden, a counsel at O'Melveny who will join A&O as a partner, are expected to join along with a number of lawyers. A&O hopes to have 12 associates in place when the office opens.

In addition to regulatory advice, A&O plans to add capacity in securities enforcement, banking, commodities, antitrust, intellectual property, derivatives, project finance, anti-bribery & corruption and international arbitration.

Senior partner David Morley (pictured) commented: "Washington DC has been a strategic priority for some time but it was important to find the right team. If it is important to our clients, then it is important to us. Washington is not just the regulatory capital of the US, it also has a deep talent pool of good lawyers. It is important to note that this is a long-term investment for us and we intend to significantly grow the office going forward."

Additional reporting by Friederike Heine.