Latham & Watkins has well-proven form for raiding the magic circle for high profile City recruits and its latest efforts suggest it has no intention of slowing down any time soon.

The US firm announced yesterday that it is recruiting Slaughter and May finance partner Sanjev Warna-kula-suriya, with the move coming hot on the heels of Friday's hire of Allen & Overy (A&O) former banking head (and failed senior partner contender) Stephen Kensell in London.

The pair take the number of partners leaving UK firms for Latham in London to five since June, with the US firm also boosting its City partnership with two non-private practice lawyers during the same period.

Coming weeks after Latham showed its penchant for magic circle partners on the other side of the Atlantic with the recruitment of Freshfields Bruckhaus Deringer executive partner and litigator Michael Lacovara in New York, the firm appears to be very much in expansion mode.

It might get them closer to the banks

Kensell is expected to strengthen Latham's existing leverage and acquisition finance practices in London, as well as adding a new specialism through his focus on advising banks lending to corporates on less highly leveraged deals.

"Historically we haven't competed in this area in London," comments Latham's London finance head Chris Kandel. "For instance, one of my clients is Deutsche bank and Stephen does investment-grade acquisition finance for them and I don't, even though Deutsche is one of my big clients."

One City banking partner at a rival US firm says Kensell is an "excellent catch for Latham", adding: "Stephen does a lot of mainstream banking so it might get them closer to the banks."

In addition to Deutsche, Kensell's clients include BNP Paribas, UBS, Societe Generale and Bank of America Merrill Lynch.

Market sources meanwhile suggest Warna-kula-suriya's departure will be a loss for Slaughters' structured products group, where  he has particular expertise.

One Slaughters partner says: "He's a really gifted partner in the structured products area and has a successful practice dealing mostly in this work."

While Kensell, with more than 20 years at A&O including 18 as a partner, is the better known name of the two, Warna-kula-suriya's hire from Slaughters is more unusual, as it remains relatively rare for partners to leave the elite magic circle firm for a rival.

A Linklaters finance partner comments that he is "a very good lawyer", adding: "I come across him in a broad range of different finance transactions and he is always nice to work with. He is a strong name in the structured finance market."

With some 20 partners and more than 90 other lawyers remaining in Slaughters' finance team, Warna-kula-suriya's departure is unlikely to have a material impact on the firm.

"There could be some company treasurers who really like him and follow him to Latham but overall Slaughters' corporate relationships tend to be so strong," says one City finance partner.

The same is likely true of A&O, which also saw the departure of its former real estate finance head Mark O'Neill to Linklaters in April, with Cleary Gottlieb Steen & Hamilton hiring financial regulation head Bob Penn in London the same month.

In fact, despite the exits in London, on the other side of the Atlantic A&O hired a five-lawyer finance team in New York last week, including three White & Case partners.

I'd be amazed if there was a client that no longer used A&O because he'd left

One London A&O partner says Kensell's exit is "perfectly understandable", given that he failed in his quest to become senior partner at the firm earlier this year. He adds: "He wanted a new challenge. I don't think it will have a meaningful effect on the practice. I'd be amazed if there was a client that no longer used A&O because he'd left."

A Slaughters partner meanwhile points to Latham's apparent appetite for hiring some more senior partners in recent months. "I think it is an age and stage thing for them. Some of the partners going over to them are not necessarily the youngest."

Another City partner adds: "Traditionally, Slaughters put partners out to pasture in their mid-50s to make room for newer partners – that was the traditional way out to make room for newer partners. It is relatively rare for there to be a partner over the age of 55."

Notable exceptions to this include M&A partner Nigel Boardman and tax partner Steve Edge, who both joined the firm's London office in 1973.

Of course, Latham is not entirely outside the war for talent. Most recently, Gibson Dunn hired two Latham Frankfurt corporate partners in June – Wilhelm Reinhardt and office managing partner Dirk Oberbracht.

Last year, Legal Week revealed the firm had been reshuffling its European operations. In 2015, it saw other Germany exits in banking and corporate, including Munich M&A partner Jorg Kirchner, who left for Kirkland & Ellis in July, as well as a handful of departures in Italy and in Paris. It is understood that a number of partners were de-equitised.

Based on recent events though, Latham appears to be more of a threat to the magic circle's market share in the City than prey.

As one head of banking at a top 20 UK firm concludes: "The market still perceives A&O, Linklaters and Clifford Chance as the leading banking and finance firms for English law, but I don't know if they are alone in justifying that reputation now. There are plenty of very good alternatives now, including the US firms."

 

Latham City partner hires announced in 2016

February

Joshua Kiernan, White & Case Israeli head and capital markets partner

Jonathan Parker, Competition and Markets Authority director (joined as competition partner)

May

Sophie Lamb, Debevoise & Plimpton, arbitration

June

Jeremy Trinder, Dechert, real estate finance

Rob Moulton, Ashurst, global co-head of regulation

July

Quentin Gwyer, GE Capital real estate executive counsel (joined as finance partner)

Simon Baskerville, Ashurst restructuring

Stuart Alford QC, UK Serious Fraud Office (joined as a litigation partner)

Stephen Kensell, A&O, finance

August

Sanjev Warna-kula-suriya, Slaughters, finance