Paul Hastings is set to hire a three-partner finance team from Ashurst's troubled London office as it emerges that regulatory partner Nicola Higgs is joining Latham & Watkins in the City.

Partners Michael Smith, Diala Minott and Cameron Saylor are all joining Paul Hastings in the latest in a string of exits from Ashurst, which earlier this year reported that average profit per equity partner (PEP) had plunged to its lowest level since 2004-05.

Higgs meanwhile is set to follow fellow regulatory partner Rob Moulton to Latham.

Smith has been a partner at Ashurst for 19 years and specialises in structured finance, securitisation, capital markets and derivatives. Minott and Saylor both also focus on structured finance. Minott, who also has particular expertise in Luxembourg-regulated credit funds, has been a partner at the firm since 2014, while Saylor joined Ashurst as a partner in January 2015.

Higgs joined Ashurst in 2010 from Nabarro and made partner in 2015. She specialises in advising banks, investment firms, asset managers and insurance firms in relation to a range of regulatory conduct issues and on a wide range of regulatory and compliance issues.

Her move will reunite her with Moulton, who handed in his notice at Ashurst for Latham in July, less than a fortnight after Latham also hired restructuring and insolvency partner Simon Baskerville.

Latham's London head Jay Sadanandan said: "Nicola's arrival will be another significant step in the development of our practice as we look to establish top-tier regulatory capability in London."

The Paul Hastings team meanwhile, will be reunited with a team of nine lawyers – including three partners – who left Ashurst in the US in July last year. That team was co-led by Ashurst's global co-head of securities and derivatives, Scott Faga.

The hires come as the firm plans to move between 25% and 30% of its London lawyers and staff to a new office in 201 Bishopsgate, close to its existing office in Bishops Square, which will remain the firm's London headquarters.

Paul Hastings' London office chair Ronan O'Sullivan said the addition of the Ashurst team would enable the firm to offer "an integrated, versatile practice", with a connection to its structured finance team in New York and Washington.

The four partners are the latest in a stream of partners to leave the Anglo-Australian firm's base in the City.

In addition to Baskerville and Moulton joining Latham in July, restructuring and insolvency partner Diane Roberts left for Reed Smith.

Ashurst announced disappointing financial results for 2015-16, with revenue and PEP both falling for the second year running.

The firm's turnover dropped by 10% to £505m in 2015-16, down from £561m the previous year. PEP plunged further still, with partners taking home an average of £603,000, 19% down from last year's figure of £747,000.

Ashurst announced this summer that it is closing its offices in Rome and Stockholm, leaving it without a base in Sweden.

Last month, the firm voted in changes to its partner remuneration structure, adding an extra 10 points to the top of the equity ladder and introducing a bonus pool.

The firm also opted to delay paying out the profit distribution due to partners last month as a result of the poor financial results. It had last delayed profit distributions in 2012.

The firm's recently elected managing partner Paul Jenkins told Legal Week the same month that he wanted to draw a line under the previous year's poor performance and turn the firm around.

Commenting on the partner exits to Paul Hastings, an Ashurst press spokesperson said: "We have a broad, transatlantic, structured finance capability as part of our wider securities and derivatives offering and we will continue to maintain that."

With regards to the departure of Higgs to Latham, the spokesperson added: "We have a very strong global financial regulatory offering and we are in the process of adding further capability to our London team."