Compared to some of its flashier US rivals, it’s fair to say Davis Polk has not taken the fastest route to building up in the City.
Despite having an office in London for more than five decades, the firm only started practising English law in 2012, and has been relatively cautious about lateral recruiting ever since. Until now.
With the addition of four partners in London over the last six months, the firm has overhauled its strategy in the City, helping to take London lawyer count above 60.
Discussing this shift, firmwide chair and managing partner Neil Barr tells Legal Business: ‘We realised that our London platform wasn’t scaled to deliver the full spectrum of services we wanted for our clients, which prompted us to rethink our approach.’
London M&A partner Will Pearce (pictured), who heads up the firm’s Europe practice, points to private capital-driven work as a key growth opportunity for the office, and a principal driver behind the recent recruitment. ‘With the increased importance of private capital for transactions, and in step with developments in New York, it became clear there was a real client-driven opportunity to strengthen our finance capability and add UK and European-focused private equity to our M&A practice.’
This strategic focus on private capital reflects what Pearce describes as a ‘natural evolution of what we’ve achieved in London over the last ten years or so.’
Lateral leap
However, not all of Davis Polk’s recent inroads into the London lateral market are directly connected to private capital.
Most recently, the firm secured the hires of Mark Knight and Jifree Cader, the co-heads of Sidley’s London restructuring team, to launch a City practice for the firm.
Barr described their hires as a ‘natural next step,’ kickstarting its European restructuring offering.
The hires came after Davis Polk also welcomed Luke McDougall, the former global co-head of Paul Hastings’ finance practice in May, followed by private equity partner Gordon Milne from A&O Shearman in August.
With McDougall’s addition and the recent promotion of finance counsel Aaron Ferner to the partnership, the London finance team now comprises four partners, including practice head Nick Benham. As Barr notes: ‘this expanded team brings greater depth and scale, enhancing our ability to service matters that are not only US-based but also sourced out of the UK.’
For McDougall, part of the appeal in joining Davis Polk was the ‘unique opportunity’ to join at a ‘critical’ juncture in the development of its London operations, bringing with him a robust reputation and extensive experience in UK and cross-border leveraged finance, corporate finance, and restructuring
Meanwhile, Milne will lead the growth of the firm’s transactional M&A and finance practice in London, working US private equity funds investing in Europe and globally.
‘US PE firms are increasingly seeing potential value in European assets, and we see clear opportunities in our ability to advise our US clients on current European market practice,’ Milne told Legal Business. ‘Furthermore, European PE clients and their portfolio companies are increasingly looking to acquire assets in the US or tap the greater pools of capital in the US.’
‘London remains a global hub,’ he continued, ‘it is fundamental to have top-tier legal expertise in London.’
As Pearce summarises: ‘In Luke and Gordon, respectively, we found a visible, well-connected leveraged finance partner with a track record of business growth, and a seasoned private equity partner with longstanding European relationships.’
Barr continues: ‘We recognised them as lawyers with established client followings, who were highly likely to bring those relationships to Davis Polk, and that has indeed proven to be the case.’
Underscoring its commitment to London, the firm has also signed a lease for 31,800 sq ft of space in the Square Mile’s Whittington Building.
Staying competitive
Davis Polk’s shift in approach does not apply solely to London – it has also made a number of high-profile hires in the US.
In August, the firm strengthened its New York finance team by bringing in three prominent asset management partners – Andrew Ahern, Alisa Waxman, and Luke Eldridge – from Debevoise & Plimpton. Additionally, Elena Millerman, formerly global head of White & Case’s project development and finance group, joined as co-head of infrastructure finance, alongside sponsor finance partner Nick Caro from Goodwin. Rounding out these moves, Simpson Thacher & Bartlett funds partner Chris Healey joined the investment management team in Washington DC, with the firm also thought to be keen to expand in California.
A key aspect of its approach to lateral recruitment has also involved changing its remuneration structure in response to the heightened competition in markets like New York and London, where a handful of top names are now on packages worth more than $20m.
The firm initially shifted away from its its traditional lockstep model in 2020, but started looking at further changes to its pay model this year amid growing competition and heightened focus on pay.
Commenting on the firm’s new approach to hiring, one London recruiter told LB that Davis Polk’s London growth to date had been restrained by its comparatively conservative spending approach. ‘They have focused on only hiring the best, but haven’t been willing to open the checkbook enough,’ he said, adding: ‘With an open checkbook, they’ll likely target top talent.’
