Dewey refugees fuel 40% hike in City lateral hiring by US firms

The collapse of Dewey & LeBoeuf helped drive partner hiring by US law firms in London to record levels in 2012, with senior lateral recruitment in the City climbing by almost 40% during the last calendar year.

Legal Week's annual survey of London partner recruitment trends at some of the leading US law firms found there were 141 lateral partner hires made by the City arms of 47 US law firms last year, compared with 103 across the same firms in 2011.

Dewey, which collapsed into bankruptcy on 28 May last year, accounted for more than 25 of the lateral moves in 2012, but, even excluding exits from the failed firm, lateral hiring still increased by 13% year-on-year across the group.

Such was the level of recruitment last year that 11% of all partners at US law firms on 1 January 2013 had joined their present firm during the previous 12 months.

The biggest London beneficiary of Dewey's collapse was Morgan Lewis & Bockius, which took on a seven-partner team led by Dewey's former London head Peter Sharp, with McDermott Will & Emery, Proskauer Rose, Willkie Farr & Gallagher, Dechert and Akin Gump among others to pick up partners from the failed firm.

In addition to the Dewey hires, Morgan Lewis also recruited a further three London partners in 2012, making the firm, which has historically been quiet in the London lateral market, one of the most active recruiters in the City.

The hiring contributed to the firm more than doubling its London partner count in 2012 to 20 as of 1 January this year.

"Dewey presented us with the chance to take on a group of first-class lawyers, and, while this scenario is not going to come around all that often, the teams practice in areas we focus on, where we have strengths and where we had additional need," said Morgan Lewis London co-managing partner Chris Harrison.

Dewey had little impact on the most active recruiter in the City last year, Locke Lord, which brought in 18 lateral hires (including nine from Salans) to launch its first base outside the US.

Looking at recruitment on a longer-term basis, Reed Smith has brought in the most lateral partners since the boom times of 2007, with 45 joining the firm over the last six years, including nine hires in 2012.

Other firms particularly active over the period include Mayer Brown, Jones Day, McDermott Will & Emery and K&L Gates.

Reed Smith EMEA managing partner Roger Parker (pictured) said: "A firm's confidence in its strategies and financial performance can reflect in the acquiring of external talent. When legal spend and organic growth across markets is under pressure, lateral hiring grows in importance."

Around 90% of the firms surveyed made at least one partner hire during 2012, with notable exceptions including Skadden Arps Slate Meagher & Flom, Gibson Dunn & Crutcher and Sullivan & Cromwell.

Looking ahead to 2013, Vassos Georgiadis of Melton Legal Search said: "There will be a healthy amount of lateral hiring this year, largely fuelled by the firms that are continuing to reshape their practices, and by star partners at struggling firms – such as those that have recently undergone mergers where profits might be considerably down – who are not prepared to wait around."

The survey does not include transatlantic tie-ups such as DLA Piper, Hogan Lovells, Squire Sanders and SNR Denton.

US firms in London: top partner recruiters in 2012
Locke Lord – 18
Morgan Lewis – 10
Reed Smith – 9
Dechert – 8
McDermott Will & Emery – 7

US firms in London: top partner recruiters in 2007-12
Reed Smith – 45
Mayer Brown – 34
Greenberg Traurig – 29
K&L Gates – 29
McDermott Will & Emery – 24

For more analysis, see Revolving doors – City partner churn at US firms reaches new heights.

• Related: Aggressive US firms push London partner hiring to five-year high