Table of Contents

• EDITOR’S RAMBLE 🗣

• FEATURED REPORT 📰

• A BIT OF FUN 😄

• IN OTHER NEWS 🗞

• AROUND THE WEB 🌐

• STUFF THAT MIGHT HELP YOU 👌

EDITOR’S RAMBLE 🗣

Hey gang!

You might have noticed I’m trying to do more law firm collaborations (if you’re interested in these, follow my LinkedIn).

I want to make sure I’m reaching out to the firms you actually want to work at.

If you’ve got 3 seconds to answer this one question about working locations, it would be a huge help to me.

Idin

FEATURED REPORT 📰

🪑 Musical chairs (with law firm partners)

What's going on here?

The number of partners moving between top law firms hit a five-year high in the first half of this year. In the last six months, there have been 100 partner moves at the Magic Circle and top 50 US firms.

Why are partners moving firms?

Law firm partners fall into one of three categories:

1. Looking to move,

2. Open to a move (but not actively looking), or

3. Loyal to their current firm.

Since the influence of US firms in London has been rising, that second category has grown – more partners are being convinced to move firms. Why? Well, star partners at London offices of US firms (particularly those working in private equity) can earn up to $20 million a year.

Why are law firms recruiting new partners?

Law firms recruit new partners for two main reasons:

• 📈Growth in new areas: If a firm wants clients in a new geography or sector, they’ll recruit senior partners who work with those clients, hoping the clients follow them.

• 📄 Managing workload: If a firm is really busy in a particular area (or expects to become busy) they’ll hire senior partners to help oversee the work.

Most lateral hires right now are happening for that second reason – busy teams need more senior people. It takes at least 6 months to recruit a law firm partner. So, teams that are hiring heavily now are probably those that had an uptick in work last year.

For example, hiring in the area of white collar crime has increased 300%. This is because (1) there was a new director appointed at the Serious Fraud Office (the UK agency that investigates financial crime), and (2) there was a major regulatory change which relates to fraud, bribery and corruption. So, law firms expected the number of white collar investigations (and white collar legal work) to increase.

But hiring isn’t up in all areas of law. For example, private equity hiring is down 78% in London. This is because recent high interest rates have meant fewer private equity deals, so there was less legal work in the last half of 2023.

How are law firms responding to their partners being poached?

A senior partner leaving is a blow to any law firm. So, naturally, firms are making changes to keep their people.

For example, Linklaters scrapped cessation payments – a payment made to partners who left the firm after working there for more than twenty years. This change means partners won't get a large payout if they leave, so leaving the firm is less financially attractive.

Kirkland & Ellis also changed the terms for any equity partners (the senior partners that own a share of the firm) that leave. At Kirkland, 55% of its equity partners’ annual pay is withheld until the following year. But Kirkland can now refuse to give this money to partners that leave. Average profit per equity partner at Kirkland is around $8 million — this means partners leaving for a competitor could lose out on $4.4 million, on average.

Are changes like these going to stop partners moving? Probably not – but, to convince them to leave, the recruiting firm might have to cover the money the partners would have been owed by their old firm. So these changes make it more expensive to poach partners.

Why should I care about this?

Partner lateral moves are heavily reported in the legal press – and if you’re an aspiring lawyer, you might think they’re not relevant to you.

But following these trends can help you when you’re applying for firms.

You might be able to spot what the firm’s strategy is, where they’re busy or expecting growth. Partner moves can also show you which firms are competitors – they’ll be competing for the same talent (for example, US firms are poaching private equity partners from Magic Circle firms).

So information like this can help you in researching law firms – you can write more tailored applications or come up with well-researched questions to ask in an interview.

Credit: Laura White

A BIT OF FUN 😄 

I can’t help you with a parking ticket

IN OTHER NEWS 🗞

• 💼 The upcoming Employment Rights Bill means employment lawyers are going to be busy. In the King's Speech, Keir Starmer promised to “level up workers’ rights” with this bill, aiming for 'security, respect, and dignity at work' for everyone. Lawyers are preparing for a flood of questions as businesses navigate the broad outline of the changes. Robbie Sinclair from A&O Shearman highlighted the anticipation and uncertainty around the specifics. Travers Smith's head of employment noted an increase in client queries too.

• 🇿🇦 Keenan Horne, a paralegal at Mayer Brown’s Paris office, is competing in the 2024 Summer Olympics. Keenan is part of South Africa’s field hockey team. Horne shared on LinkedIn how he loves balancing sports and his career — imagine saying you’re an Olympian in your next competency interview (also — he’s playing today against Spain at 6:45pm).

• 🇬🇧 Hogan Lovells and Pinsent Masons are leading NatWest’s acquisition of part of Metro Bank. This deal helps NatWest boost its customer base after buying Sainsbury’s Bank last month for £125 million. For Metro Bank, this sale brings much-needed cash, though they’re selling at a 4% discount, leading to a £105 million loss. Hogan Lovells is advising Metro Bank and Pinsent Masons is advising NatWest.

• 📈 Revolut finally got its banking licence approval, in part thanks to Linklaters. After three years of trying, the fintech received initial approval last Thursday. Now, Revolut enters a ‘mobilisation’ stage for up to 12 months, with deposit restrictions until the PRA and FCA (the UK financial regulators) are sure it can operate safely as a full bank.

• ⚖️ Nearly 40% of insurers are considering pulling out of the professional indemnity insurance (PII) market. PII protects professionals (like lawyers) against negligence claims. This issue has come up after the recent Discovery Land v Axis case. The court ruled that an insurer can only deny coverage for dishonesty if all firm partners condoned the dishonest act (if you’re interested, here’s a breakdown of the case). Insurance rates are already high — between 3% and 9% of annual turnover. If insurers pull out, that means more expensive PII and less coverage (bad news for both law firms and their clients).

AROUND THE WEB 🌐

• 📱 Useful: Share TikToks with people who don’t have the app

• 🧘‍♀️ Focus: Working somewhere distracting? This white noise site could help

• ☎️ History: BT phone boxes (which controversially replaced thousands of red ones in the 1980s) could be given listed status following a new campaign

Credit: r/internetisbeautiful

STUFF THAT MIGHT HELP YOU 👌

• 📹️ Free application help: If you're applying to commercial law firms, check out my YouTube channel for actionable tips and insights into the lifestyle of a commercial lawyer in London.