The story of the leveraged finance recruitment market in 2024 for the top-tier legal profession has been one of seismic partner moves and continued growth in associate ranks. For London lawyers, this means navigating a constantly shifting landscape.
Let's take a closer look at the key trends shaping the leveraged finance recruitment market and what it means for legal professionals in London.
War for Talent
As we move into Q4 of 2024 we are in the midst of a battle for legal talent within leveraged finance. This competition for talent, which has been raging since last year as firms looked to come out of a downturn and take advantage of an improving market, is still fierce.
In April 2023, there was the tectonic launching of Paul Weiss’ UK law offering with the hires of Neel Sachdev and Roger Johnson from Kirkland. Paul Weiss’ subsequent recruitment blitz of some of the City’s leading corporate and private equity lawyers was aggressive. It was a market shifting move which ushered in a spate of partner moves at the very top tier of the private practice market.
Kirkland responded by hiring the former Paul Weiss London head Alvaro Membrillera, one of Europe’s leading private equity lawyers. Kirkland also secured leading Simpson Thacher finance leads, Ian Barratt and Sinead O’Shea.
The announcement of market shaking leveraged finance partner moves keep coming. In the last few months alone we have seen:
- Gibson Dunn hired leading partner David Irvine from Linklaters.
- Sidley Austin poaced a five partner sponsor side team from Latham & Watkins in London, led by Jayanthi Sadanandan.
- Kirkland hire Vanessa Xu, a high-profile partner move from Simpson Thacher.
- Latham & Watkins take Jonathan Brownson, Joydeep Choudhuri, and Prue Criddle from Cahill.
- Simpson Thacher recruited Paul Hibbert and Emma Serginson from Weil Gotshal
- Paul Hastings hired Reena Gogna from Weil.
- A&O Shearman hired leading lawyer Filippo Crosara from Barclays.
The graph below also showcases the sheer uptick in lateral partner moves within leveraged finance.
Key Drivers of Recruitment
It is clear we are in an improving market for private equity investment. This is reflected in how busy the City’s leading leveraged finance teams are and in how active the recruitment market is.
To better comprehend why it is worth re-looking at what some of the world’s leading firms predicted for the year ahead from a broader M&A perspective as well as a debt finance angle...
After a downturn in M&A towards the end of 2022 into 2023 and with inflation sticky and higher interest rates plateauing there was the expectation that 2024 would bring a gradually improving M&A market as long as nothing came along to hamper it.
This is a scenario the Private Equity team at Cleary Gottlieb highlighted in their superb PE outlook for 2024 report for the Private Equity sector. They noted that with inflation declining and interest rates stabilising, "should the environment remain largely unchanged, then this could begin to signal better conditions for private equity investment and activity could pick up again over the course of 2024."
A sentiment Sarah Jones, Global Head of Corporate at Clifford Chance, succinctly summarised in Clifford Chance’s 'Global M&A Trends for 2024', with:
"Uncertainties caused by complex geopolitics and upcoming elections could put a dampener on this activity, so the full extent of the increase is hard to predict."
Despite geopolitics becoming more complex, certainly in the Middle East, a new Labour government and the first reduction in interest rates in over four years have meant that cautious optimism has transitioned into a less cautious and more optimistic environment for M&A activity and PE investment.
For a sweep of the issues that affected the European leveraged finance landscape from the downturn at the end of 2022, through 2023 and looking at the outlook for the rest of 2024, look no further than the brilliant report 'European Leveraged Finance Enter a New Era' from White & Case.
Key Insights:
‘In 2023, financial sponsors grappled with one of the toughest deal financing environments since the global financial crisis.’
‘Refinancing existing debt facilities emerged as a dominant trend in leveraged finance in 2023, with sponsors exploring opportunities for assets that require novel capital structures.’
‘Following a challenging period and with the expectation of lower interest rates, sponsors may soon find deal activity and financing alternatives opening up once more.’
In Summary...
From a recruitment perspective we expect to see the fight for elite level talent for the leading leveraged finance teams to continue through 2024 and into 2025.
Given the substantial investments made by many prominent debt finance teams in partner hires, the demand for elite leveraged finance associates remains robust, with ample opportunities available in the top tier.
Growth in associate moves over the last quarter is highlighted in the graph below.
However, for associate recruitment, in stark contrast to the hiring boom in the covid recovery period, where the demand was such that firms were looking far and wide for talent, today, the leading teams can afford to only consider the most appropriate candidates, and are being far more stringent in their assessments.
Overall, there is a distinct preference for local talent—individuals trained and qualified in the City at comparable firms. Lawyers from other jurisdictions are expected to possess an exceptional profile, including experience with leading teams, responsibility on significant transactions, and ideally, a stable career history with no moves.
Again, there is ‘cautious optimism’ that 2025 will be a busier year for M&A activity than 2024 and therefore it is reasonable to expect the leveraged finance recruitment market to get even busier.
If you are a leveraged finance lawyer looking to advance your career in the City, reach out to me directly for a deeper dive into the market and opportunities:
📧 jonathan.taylor@sonderconsultants.com
🔗 https://www.linkedin.com/in/jonathan-taylor-rec
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