With an uncertain general election then lying ahead and the market this side of the Atlantic only just fully back up to speed after the financial crash, international law firms in the City could have been forgiven for lying low in 2014.

However, this was far from the case. Research into lateral hiring trends at some of the largest international firms operating in the UK found that partner-to-partner recruitment jumped by 56% in 2014 compared with 2013, with 117 moves compared with 75 the previous year.

The hires were spread across 46 firms responding to Legal Week's international firm survey; the overwhelming majority of respondents are US outfits, alongside a handful of large international names without a clear headquarters.

On the face of it the increase in hires looks impressive, but delve a little deeper into the figures and the recruitment market was more divided than it appeared. Fewer than half of the responding firms (21) made more hires in 2014 than 2013, and the bumper haul was boosted by the demise of Boston stalwart Bingham McCutchen, with Akin Gump Strauss Hauer & Feld picking up 20 partners from the now defunct firm.

Leaving this mass move to one side, total UK partner-to-partner appointments at the responding firms rose by 29%. The overall hiring tally in 2014 fell just short of the high of 128 lateral hires made in 2012 – a figure itself boosted by the collapse of Dewey & LeBoeuf. Eight of the firms surveyed made no hires in the City, down from 12 the previous year.

In part the mixed picture simply reflects the different stages of development across these firms in the capital. With many now as large as some UK players, they are no longer as dependent on bringing in big-name laterals to find success and can instead grow organically.

"I think we are seeing very different strategies," says Ropes & Gray London senior partner Maurice Allen. "Firms like Kirkland & Ellis are prepared to go for star names and pay them top of the market [rates]. Some would see that as a short-term strategy but it seems to work well for them."

Ropes itself recruited one partner in 2014– Pinsent Masons investment funds partner Monica Gogna – compared to three in 2013. More recently it has added commercial litigation capabilities with the hire of K&L Gates partner Thomas Ross, who joined the firm in April this year.

In total 18 firms say they expect to see an increase in lateral hires in 2015 compared to 2014. Three believe the number of laterals is likely to remain flat year on year in 2015.

Opinions on the state of the recruitment market are as mixed as the numbers, with some partners confident that London is enjoying a hiring resurgence and others arguing the market will never be the same as it was before the financial crisis.

White & Case London head Oliver Brettle suggests that recruitment will never return to the rates seen a few years ago because clients no longer want high leverage ratios. "I don't think we are going to see a return to the leverage we saw before 2008," he comments. "Clients are very sophisticated and I don't think the lessons they have learned from the crash are going to be unlearned. Firms have not really come back in quite the way that some might have expected."

Syed Nasser, managing director of Stephen Bell, a legal recruitment specialist, adds: "The US firms were never going to sustain huge hiring over a long period of time. But there will always be new entrants to the market and the coming year will be no different, with several US outfits reviewing their strategies for Europe and London."

Akin Gump's Bingham hiring spree meant that it was the most active firm in the recruitment market in 2014, with more than twice as many laterals as its closest competitors. Squire Patton Boggs and Reed Smith, which each recruited nine partners, were the next biggest hirers.

Having hired no partners in 2013, and only one in each of the previous two years, Squire Patton Boggs' recruitment marks a change of tack following the merger between legacy firms Patton Boggs and Squire Sanders on 1 June 2014. The firm now has a total partner headcount in the UK of 122, with prominent hires in 2014 including ex-DLA Piper partners Martin Rees and Gary Paddison.

Reed Smith continued a spate of growth with its biggest partner haul in four years. The firm has seen a sustained period of expansion in the City, also sitting among the top five biggest recruiters last year. "We have continued to grow some of our branded business and raise our game in terms of transactions and disputes in a number of areas," explains Reed Smith's managing partner for Europe, Middle East and Africa, Roger Parker. "I think our brand is continuing to build from an overall international law firm perspective and we continue to be seen as competing in the high echelons of that group."

Big names
Headline hires are one way in which a firm can get noticed overnight in a heavily saturated market, and, while many of the more established international firms are now recognised names in the City in their own right, it undoubtedly remains the quickest way to build a practice area.

Gibson Dunn & Crutcher saw its profile in London boosted by the hire of former Ashurst senior partner Charlie Geffen in October. Speculation about his departure had been rife since his defeat in Ashurst's chairman election and he was linked with Gibson Dunn for months before confirming his move. Geffen joined former Ashurst colleagues Jonathan Earle, Nigel Stacey and Mark Sperotto at the US firm, which had – until recently – kept a relatively low profile in the City since its launch in 1979. The firm also hired Kirkland finance partner Stephen Gillespie. 

Ashurst, meanwhile, lost a number of other partners to US competitors over the year including Nick Benham, who moved to Davis Polk & Wardwell as the firm continues to build its English law practice headed by former Freshfields Bruckhaus Deringer partner Simon Witty. Capital markets partner David Quirolo moved to Cadwalader Wickersham & Taft.

Other headline hires saw Kirkland European head Graham White defect to Fried Frank Harris Shriver & Jacobson to lead its City practice.

Elsewhere, dispute resolution partner Tony Dymond left Herbert Smith Freehills for Debevoise & Plimpton, and Weil Gotshal & Manges lost high-yield star Gil Strauss to Simpson Thacher & Bartlett and banking chief Stephen Lucas to Kirkland.

However, as much as these additions turn heads in the short term, some partners are sceptical about the long-term benefits of star hires to a firm's reputation and workflow in the longer term. "My experience is that the impact of headline hires only lasts as long as the headlines themselves. With one or two exceptions most of our hires over the last five years have been junior partners who are on the way up and establishing their practice and that has worked for us," says K&L Gates London managing partner Tony Griffiths.

"With headline hires the market is changing," argues Allen. "Generally for establishing a presence there is no doubt that one or two headline hires often makes it easier to bring other people along, but you can still get the job done without big-name hires by bringing in people with the hunger and commitment to go out and build the business."

Geffen adds: "Although there will continue to be variations in the volume of hires, the trend is irreversibly upwards and will continue until the US firms reach critical mass."

Office launches or mergers
The first half of 2015 has already proved that London retains its allure for international firms, with several new office openings confirmed despite the already strong competition from established players.

To truly serve a global client base, the need to have a City outpost, particularly for US firms, is unlikely to diminish and, with the resurgent dollar increasing purchasing power, there are worse times to make a move.

Cooley's London office launch in January saw the firm take 20 partners from Morrison & Foerster (MoFo) and legacy Edwards Wildman Palmer just as the latter completed its merger with Locke Lord to form Locke Lord Edwards. Neither MoFo nor Locke Lord Edwards are included in this year's survey as both declined to take part.

"Consolidation in the market is continuing, as is the need for firms to be strong in both the US and the UK," comments Baker & McKenzie London head Paul Rawlinson.
"This is especially true for certain types of cross-border transactional work where clients require a mix of US and English law. For many firms organic growth is not quick enough, so alliances and mergers that are considered more sustainable will no doubt be preferred."

Meanwhile, March saw US firm Jenner & Block announce its move into the London market, relocating two partners from its US offices to the City.

For as much as the naysayers will continue to doubt London's capacity to support an ever-increasing number of international firms, the lure of the dollar looks set to continue tempting talent away from UK firms and driving consolidation.

Big-name hires alone are no longer enough to build a business in London though. Competition from a growing number of firms – particularly very large players without global headquarters that have resulted from multiple mergers, such as Dentons – means firms must have very clear strategies to succeed in the City, and these strategies need to evolve over time.

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Akin Gump's growth spurt
Although this year's recruitment figures are without a doubt up substantially from last year, the numbers have been affected by the mass migration of partners from the now defunct Bingham McCutchen to Akin Gump Strauss Hauer & Feld. In October last year Akin Gump finalised a deal that saw the firm take on 20 partners in the City as part of a 28-strong haul across offices in London, Frankfurt and Hong Kong.

The moves pre-empted the much-anticipated deal between Bingham and Morgan Lewis & Bockius, which saw the latter cherry-pick talent to bring into its partnership, rather than entering into a tie-up.

"Over the last year our position has changed quite dramatically in London, Frankfurt and Hong Kong," says Sebastian Rice, the partner in charge of Akin Gump's London office. "Our strategy was – and continues to be – to focus on our core strengths in the US and to replicate them internationally."

The firm's partner headcount in London has grown from 14 to 34 over the last year.
In the City Akin Gump is focusing on several areas of growth including energy, investment funds and international trade. The firm had been looking to match the strengths of its stateside restructuring team in London for some time. Led by former London head James Roome, the former Bingham team goes a way towards meeting that ambition. "For years we have been looking to do exactly that: to find the right team to complement our very strong US restructuring practice," adds Rice.

Roome comments: "That reputation has not previously been matched in the firm's European and Asian offices, and so the combination has substantially deepened the firm's resources and position in that core practice area. Since joining the firm, our team has seen a substantial in-flow of work from the US offices, endorsing the strategy of building around the firm's strengths."