After a sluggish 2023, the London legal market is poised for heightened activity in the second half of 2024, supported by stabilising economic conditions such as steady inflation, declining interest rates, and recent political shifts that have increased business confidence. A notable surge in deal flow has emerged, driven partially by low-valued UK companies becoming prime takeover targets for larger US groups, Corporate teams in London are getting busier. This has intensified the competition for legal talent.
Profits at leading firms like Clifford Chance, Linklaters, and Allen & Overy soared to £2.8 billion for the last financial year, reflecting a 12% increase from £2.5 billion. Profit growth has been fuelled by a resurgence in deals, alongside numerous litigation and restructuring mandates, and expansion into the US market, even as the IPO landscape remains subdued. Additionally, increased emphasis on data privacy, cybersecurity, and green energy is contributing to a steady stream of work.
Paul Weiss has surpassed the $2 billion global revenue threshold, achieving a 10.8% increase compared to last year, fueled by its ambitious recruitment efforts in London. Meanwhile, despite some departures in London, Kirkland has strengthened its status as the largest law firm globally, with a 10% rise in global revenue to $7.2 billion last year, as reported by The American Lawyer.
These dynamics have heightened the competition for legal talent, prompting top-tier law firms to enhance their recruitment strategies and salaries to retain associates, as partners gear up to meet rising client demands in this increasingly business-friendly environment.
Here’s how law firms have been gearing up to win over more work and marketshare in H2:
Partner Hires:
Last year, London experienced a remarkable surge in partner hires, reaching a record 510, with Kirkland & Ellis at the forefront with 18 new partners. This momentum has carried into 2024, with 265 partner recruits recorded in the first half of the year. Notably, US firms are actively poaching partners from one another, with 49 lateral moves occurring in just the first six months.
Recent months have witnessed several high-profile partner transitions within transactional practice areas, including corporate, private equity, and funds, significantly reshaping the competitive landscape of the London legal market.
To name a few, Paul Weiss has notably strengthened its presence in London through a series of strategic partner hires. Most recently, they targeted Kirkland & Ellis, bringing on board Jeremy Leggate as a partner and co-head of European investment funds. Before this, James King from Kirkland joined Paul Weiss to lead their UK funds practice, marking a significant expansion for the firm. Also joining King from Kirkland we’re partners Roger Johnson, Andreas Philipson in corporate, and tax partners Timothy Lowe and Cian O'Connor.
Kirkland has made significant hires to strengthen its practices, with the latest addition being Vanessa Xu, who joins from Allen & Overy and is poised to enhance the firm’s debt finance team.
Meanwhile, Freshfields Bruckhaus Deringer has reinforced its capital markets division by bringing on David Boles from Cooley, anticipating an increase in capital markets activity. Additionally, Akin Gump has recently recruited talent from Cooley, welcoming Justin Stock and Stephen Rosen to its private equity transaction team, while David Bresnick has bolstered its technology transaction practice.
Associate Salary Increase:
Law firms are not only focusing on expanding their practices but also on offering attractive remuneration packages to retain key talent. UK “magic circle” firms Freshfields, Linklaters, Clifford Chance and A&O Shearman have all this month increased salaries by 20 per cent for newly qualified lawyers (NQs) to £150,000, while their US peers with London outposts have pushed up compensation to as much as £180,000 this year.
Here’s a recap of all firms who have increased salaries so far in 2024:
- Quinn Emanuel (US Firm): NQ salary £180,000
- Sidley Austin (US Firm): NQ salary £175,000
- White & Case (US Firm): NQ salary £175,000 (Active 1st Jan, 2025)
- Paul Hastings (US Firm): NQ salary £173,000
- Davis Polk (US Firm): NQ salary £170,000
- Willkie Farr & Gallagher (US Firm): NQ salary £165,000
- Ropes & Gray (US Firm): NQ Salary £165,000
- Cleary Gottlieb (US firm): NQ salary £165,000
- Freshfields (Magic Circle): NQ salary £150,000
- Clifford Chance (Magic Firm): RNQ salary £150,000
- Linklaters (Magic Circle): NQ salary £150,000
- Macfarlanes (Silver Circle): NQ salary £140,000
- Herbert Smith Freehills (Silver Circle): NQ salary £135,000
- Hogan Lovells (Global Firm): NQ salary £135,000
- Reed Smith (International Firm): NQ salary £125,000
- Ashurst (International Firm): NQ salary £125,000
- Mayer Brown (US Firm): NQ salary £120,000.
- Taylor Wessing (International Firm): NQ salary £115,000
- Katten Muchin Rosenman (US Firm): NQ salary £115,000
- DLA Piper (Global Elite Firm): NQ salary £110,000
- HFW (Silver Circle): NQ salary £100,000
- Bird & Bird (International Firm): NQ salary £98,000
- Gowling (International Firm): NQ salary £98,000
- Pinsent Masons (International Firm): NQ salary £97,000
Kirkland and Paul Weiss still top the table at £180,000, in line with the U.S. Cravath scale that was increased in 2023. The compensation for NQs in London has increasingly become a benchmark for success, as UK firms strive to compete with their wealthier US counterparts with City offices.
Associate Hiring:
After slow demand last year, lateral hiring has since picked up considerable pace in 2024. Demand is very much still at the mid-level, with junior roles few and far between as firms focus on only hiring the very best talent. Standards are high, but so are the rewards. We don't expect these standards to drop anytime soon, but we do expect more look-in from talented overseas lawyers in the Corporate space.
‘’Firms are expanding their transactional practice teams in response to newly stabilised economic conditions, including steady inflation and declining interest rates. These factors have enhanced understanding of business value, facilitated discussions on valuations, and helped establish price points for M&A transactions. Consequently, this has led to increased deal growth, prompting firms to strengthen their teams to better address the evolving needs of clients in corporate advisory, private equity, and regulatory compliance.’’ - Jonathan Taylor, London Legal Recruiter, Sonder Consultants
To delve deeper into current legal market trends, gain valuable insights, and stay informed about new salary benchmarks, Sonder Consultants offers an exclusive, comprehensive legal market guide designed to empower lawyers in navigating the market with confidence.
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