Legal Week research into recent recruitment trends by international firms in London has found the group brought in over 20% more partners in 2015 than the year before, with total partner numbers climbing by 6% across the group year-on-year.

Our analysis of the hiring activity of 36 primarily US outfits found the group made a total of 110 partner-level lateral hires in 2015, compared with 90 in 2014. The hires helped push up overall London headcount to new highs, with nine firms now housing at least 65 partners in London and Latham joining the elite band of firms in the group numbering at least 200 UK lawyers, excluding partners. 

The 2015 lateral hiring tally means more partners were hired by the group last year than at any point in the past four years – in excess of a third more than in 2012 and a full 80% more than the 61 partner-to-partner recruits brought in by the firms in the lowest recruitment year in the period – 2013.

Cooley's London launch at the start of 2015 meant the firm was responsible for more than a fifth of all the hires. It launched with 55 lawyers in January 2015 and has been adding to it ever since. By January this year, the office stood at 71 lawyers including 24 lateral partner hires.

• Click here to view the full table of headcounts for international law firms in London

Commenting on the office's growth, global chairman Joe Conroy says: "Since our launch in January 2015 with 19 lateral partners, we have continued to make several partner additions as we build out our full-service UK capabilities. For the industries and practices on which we are focused, London presents a tremendous opportunity. It is no surprise there is continued movement in the UK market, as partners identify the best opportunities for long-term success within a true partnership culture."

Cooley's London launch at the start of 2015 meant the firm was responsible for more than a fifth of all hires

King & Wood Mallesons (KWM) made the second largest number of hires during the period, with the firm adding 13 new partners to its legacy SJ Berwin office in London. However, its hires came alongside a spate of exits, leaving partner headcount flat between January 2015 and January 2016 and the firm is continuing to see a number of partners leave, some voluntarily and some as part of a restructuring.

After KWM, the international firms making the most UK hires were Morgan Lewis & Bockius, which brought in eight new partners, and Squire Patton Boggs and Dentons, which each brought in six.

• Click here to see the full table of lateral hires by international law firms in London

Looking over a longer period, Morgan Lewis has been the most active lateral partner recruiter in London since 2012, bringing in 30 partners during the period including some from now defunct Dewey & LeBoeuf. A law firm collapse also helped Akin Gump into second place alongside Cooley, with the firm's 24-strong haul in four years including 20 partners from Bingham McCutchen in 2014.

However, Akin Gump was one of ten firms making no partner-to-partner hires in the UK at all in 2015, compared with seven non-hiring firms in 2014.

"Lateral partner moves were up last year but the market has been once again propped up, certainly at the top end, by US firms, whether it is new entrants to the market or firms looking to significantly build out their London offices," says Syed Nasser, managing director of recruitment firm Stephen Bell Legal.

Big names
High profile hires in the City last year included Gibson Dunn's hire of Herbert Smith Freehills' partner Steve Thierbach, Kirkland's hire of three partners from Linklaters, including corporate partner Matthew Elliott, and Paul Hastings' hire of Linklaters' restructuring heavyweight David Ereira.

Lateral partner moves were up last year but the market has been once again propped up, certainly at the top end, by US firms

Not that all of the moves came from UK firms. Kirkland saw a three-partner funds team led by Mark Mifsud quit for Fried Frank in London, while Freshfields Bruckhaus Deringer showed that UK firms are still capable of hiring talent out of big-paying US firms with its lockstep-flexing recruitment of Kirkland high-yield partner Ward McKimm.

Elsewhere, Morrison & Foerster added Latham & Watkins corporate partner Graeme Sloan, while Dentons hired former Berwin Leighton Paisner corporate head David Collins as co-chair of its global M&A practice.

Across the globe there was a slightly different picture with regards to the most active hirers. Greenberg Traurig was particuarly active in Continental Europe and the Americas, where it took on 18 and 62 partners respectively. Baker & McKenzie also made a number of hires in Europe, bringing in 18 new partners.

With regards to Asia, KWM made the largest number of hires across the group, taking on 25. As a whole the group made 106 Asian hires, only marginally fewer than the 110 taken on in London in 2015. Just eight partners were hired in the Middle East last year with Bakers the only firm to take on more than one.

Headcount changes
As demonstrated by firms such as KWM though, the tide of moves has not been going one way only. While overall partner numbers have climbed year on year, rising from 1,366 in Jan 2015 to 1,443 in Jan 2016 – a total increase of 6% and an average increase of 7% across the group – individual performance differed markedly.

At one end of the scale, firms such as Kirkland, White & Case, Morgan Lewis, Ropes & Gray, Quinn Emanuel and Goodwin Procter saw double-digit increases in UK partner counts, with both Morgan Lewis and Goodwin seeing increases of 43% year on year.

At the opposite end of the spectrum though, 10 firms in the group saw partner numbers contract during the 12-month period, including Skadden Arps Slate Meagher & Flom, Sidley and Davis Polk. The firms with the biggest contractions in partner count year on year were Wilmer Cutler Pickering Hale and Dorr (-30%) and Winston & Strawn (-13%).

The headcount numbers show the scale and depth many US firms have now achieved in the UK through mergers and/or lateral hiring.

Three firms (Squire Patton Boggs, Dentons and Reed Smith) each have more than 100 UK partners, with a further six firms – including Latham & Watkins and Kirkland – counting at least 65 partners on 1 January this year.

For context, eight of the UK's 50 largest firms by revenue had total worldwide partnerships of less than 100 in 2014-15, including Macfarlanes, Travers Smith, Mishcon and RPC, while elite magic circle firm Slaughter and May had only 117 partners.

Given that 2016 has already seen a number of significant moves in the London market – including Cleary Gottlieb Steen & Hamilton last month making only its third London lateral partner hire in more than a decade with the recruitment of Allen & Overy's head of non-contentious financial services regulation, Bob Penn – the trend for US and international firms bulking up over here looks set to continue.

Indeed, 14 of the firms surveyed said they expect to make more UK hires in 2016 than in 2015.

All of which is going to continue to pile pressure on the UK firms as they scramble to find ways to protect their star partners from the lure of the dollar.

As Nasser concludes: "The magic circle [firms are] also now trying to compete by looking closer at the equity and remuneration structures they have in place to attract the higher profile and rainmaking partners, as well as allowing them more flexibility to retain the talent they have."

High profile partner moves in 2015

• Steve Thierbach joined Gibson Dunn from Herbert Smith Freehills
• Matthew Elliott joined Kirkland from Linklaters
• David Ereira joined Paul Hastings from Linklaters
• Mark Mifsud led a three-partner team from Kirkland to Fried Frank