UK Law Firms in London
In the recent past a partnership was for life. This is not the case today.
Currently, almost all firms in London are looking to hire partners. Some of the bigger firms have a need for partners in as many as a dozen different sectors.
The result of this enormous demand has been that many individuals now find themselves with a choice: To stay or to move on.
Types of UK Firms
There are vast numbers of UK law firms in London that can be categorised into:
- Magic Circle practices
- Medium to large practices (including national law firms that have large London practices – sometimes referred to as ‘Silver Circle’)
- Small to medium sized practices
- Niche law firms
Demand for UK Partners within UK Firms in London
Magic Circle firms do not recruit many partners into their London practices. When they do the recruitment tends to be strategic in nature. Partners in demand at this level will often share clients and be known by the hiring firm. Demand tends to be for specialist finance lawyers and those in private equity or in niche areas.
Medium to large firms are highly active in recruitment. Much of the hiring is strategic, although many firms of this size are also opportunistic. In reality it is often a combination of the two.
The majority of the demand is for partners in the following areas:
- Insolvency
- Corporate
- Banking and finance
- Structured finance/securitisation
- Capital markets
- Private equity
- Intellectual property
- IT
- Real estate
- Insurance/reinsurance
- Projects/PFI
- Funds
Small to medium-sized firms are highly opportunistic. Many firms of this size are interested in 'business case' as against specific area of law. By this we mean as long as the individual brings in sufficient following compared to expected earnings, then that is acceptable. Strategic needs tend to be dominated by areas such as:
- Pensions
- Tax
- IP/IT
- Corporate
- Employment
- Commercial property
- Private client
Niche firms - These practices tend to be in areas such as (and recruit specialist partners in) IP, IT, employment, commercial property, shipping/aviation, commercial litigation and corporate. These firms often compete with larger practices and attract top quality lawyers in their specialist fields.
Followings Required to be Considered For UK Firms in London
Whilst there are areas of law that occasionally do not require any following, these are very much the exception. Such areas can include: tax, pensions, finance and, when the market is very active, corporate.
In today's market, followings are almost essential to make a successful move.
For Magic Circle practices, being known and being a recognised player is just as important as being well connected with serious clients. The clients for these firms will, in most circumstances, be expected to generate at least £1.5/2 million and the clients will have to be ‘specific' clients. As most hires within these firms are strategic, simply having a multi-million pound following will often not be enough.
The medium to large practices will almost always expect a following as a sign of the individual's ability to generate and develop relationships with clients. The value of the followings sought will vary depending on the specific firm, but will normally be in the range of £500,000 - £1 million.
The small to medium-sized practices are very opportunistic and will always expect individuals to bring decent followings. That value required will differ enormously, but will typically be in the range of £250,000 to £400,000 plus.
Niche practices are normally very small in terms of the number of partners, but often require followings in excess of £500,000.
In general, many practices work on the basis that equity partners should generate three times whatever they wish to earn. Whilst this is not an exact arithmetic calculation for many medium-sized firms, for the smaller firm it can be as precise as this. So if an individual wished to earn c.£250,000 they would be expected to generate c.£750,000 in fees. With very small practices, some pay up to 50% of what individuals generate.
Capital Contributions
These vary enormously from firm to firm. The most common level for plateau equity partner is between £150,000 - £200,000. In practical terms this figure can be as low as £100,000 and as high as £500,000.
Notice Period
The vast majority of equity partners in the largest firms are on 12 months notice. This is often 6 months within the smaller London firms.