Hogan Lovells

When Hogan Lovells announced last Monday it had rehired a private equity team that had joined Paul Hastings a year earlier, many people had questions. Why would the team leave and the rejoin so soon? Had something happened? Why would Hogan Lovells simply take them back?

When the team, comprising partners Ed Harris and Leanne Moezi in London, as well as partner Adam Brown in Northern Virginia, left to join Paul Hastings last July the hiring firm had described it as "another example of the calibre of talent our private equity practice attracts".

But while attracting talent is one thing, retaining it is quite another as Harris and his team soon discovered.

Four people with knowledge of the matter told Law.com International that they heard Harris had had a conflict with another London-based Paul Hastings partner over a client relationship. One former partner and a current partner at Hogan Lovells said they were told the client in question was private equity investor Pantheon.

He added: "Sometimes when two partners from different firms, but with the same client, move to a new firm, that's an issue they can encounter because both will claim it's their client."

Two former Hogan Lovells partners and a current partner at the firm also said they'd heard the team's fee rates may have been "too low" for Paul Hastings.

"Sometimes when two partners from different firms, but with the same client, move to a new firm, that's an issue they can encounter because both will claim it's their client."

A spokesperson for Paul Hastings said in a statement: "There appear to be a lot of rumours surrounding Ed's departure and client relationships. We do not comment on such matters but sincerely wish Ed and the team the very best on their return to Hogan Lovells."

Two people close to the situation said the reasons behind the team move were "a lot more complicated" than those issues.

Ed Harris and Hogan Lovells declined to comment on those matters. However, Harris told said he decided to rejoin Hogan Lovells "for the reasons I joined the firm in the first place", citing the firm's culture of collaboration, its offerings in global financial centres and the team's strong connections with colleagues.

He said: "In a prolonged period of remote working, that is extremely important to have colleagues whom you respect and know will serve our clients well."

He added that he is looking forward to growing the private equity practice, and "help it build out what it has been creating in the buyout space".

Filling a gap

Rehiring a team that had chosen to leave is not common practice. But Hogan Lovells' decision to rehire Harris and his colleagues did not come as a surprise to several former partners.

The firm had a gap in its corporate department following the departure of five London partners between August 2018 and October 2019, according to the firm's Companies House filings. All of them moved to U.S. firms in London, including: private equity partner Robert Darwin; corporate partner Steven Bryan; M&A partner Derek Meilman; the firm's former global head of private equity Tom Whelan and Ed Harris and his team.

And the firm had not made up the difference from its junior ranks. In this year's promotions round, the firm promoted one London-based corporate lawyer to the partnership.

The firm's private equity and funds team in London has 24 partners and 81 other lawyers. Critics might argue that its client list, featuring the likes of DWS Investments, growth investor Grafton Capital, the IFC and Santander Innoventures, does not feel as impressive as some of its private equity rivals.

However, Hogan Lovells' global head of the corporate and finance practice, David Gibbons, disagreed. He told Law.com International: "We are now a capable match for any of the leading corporate teams in the City. Indeed, most of our work is opposite the Magic Circle and elite U.S. firms."

Two former partners and two recruiters said that in the past year, the firm has been "desperate" to hire new corporate and private equity partners, and build up the practice in London. One former partner added the firm "would be pleased" with the team move because Harris "brings in business" and is "a good operator".

Another former partner said: "I think it's a win-win for the firm and the team. The firm would welcome them back with open arms, and it's a place where the team knows the people they're working with, it's an environment they're comfortable in."

Further growth

One former partner said it was important for Hogan Lovells to build up its transactional practice in the U.K. as the firm's profitability still lagged many of its U.S. competitors.

He said: "We're all looking for that rainmaker. It's a war for talent and client relationship. Hogan Lovells has been dipping its toes in the water with big potential private equity hires from good firms, but I think they probably got outbid every time."

David Gibbons denied this, saying: "Over the past five years, we do not believe there is a single situation where there was a lateral private equity partner that we were unable to recruit because we were outbid. We are a $2.4 billion business and have the financial wherewithal to compensate at competitive levels for the right talent."

However, he acknowledged that the firm has encountered "bumps" on the road to hiring private equity partners in London in the past year.

"We do not believe there is a single situation where there was a lateral private equity partner that we were unable to recruit because we were outbid"

Gibbons stressed that the firm sees the London corporate practice as "one of the key engines of the firm", and that there is "palpable ambition" within the corporate team to grow, private equity being a "significant part of that."

He added that the firm will be looking to promote corporate lawyers to the partnership in the coming years while still looking for strategic lateral partner hires.

However, despite the competitive nature of the private equity hiring space, he said the firm is not "interested in buying a book of business" but is rather more focused on making "a long term investment in individuals or teams" who can "fit in with our collegiate culture" and benefit from the firm's platform.

Given fitting in with the culture can always be a risk for any hiring firm, perhaps it could even make the hire of Harris and his team a low-risk move.

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