‘When it comes to English law, I don’t think clients are as focused on where a firm is headquartered, and they are willing to use a US law firm. The same is not true in reverse.’ Pranav Trivedi, Skadden
With the launch of our 2022 Global London report, we ask the leaders at US law firms in the City to weigh up the challenges ahead
Down the pipe
‘If you asked me what’s happening in 2022, I would say that there is a slowdown for venture capital and growth equity, while there is a renewed interest on private equity infrastructure deals. Given that there is an expectation for high inflation and probably a repricing of risk, there is a natural movement of limited partners to allocate capital to infrastructure that is perceived as a safer space.’
Alvaro Membrillera, London office head, Paul Weiss
GenNext
‘High compensation rates will grab people’s attention and it might get somebody excited for a couple of months, but pretty soon they will settle into, “What is my day job? Who am I working with? Do they actually care about me? And where am I going in five years?” That is becoming more important than ever to the next generation.’
Gemma Roberts, London co-chair, Goodwin
Nothing lasts forever
‘At the end of the day, if you’re thinking the massive flow of transactional work is going to go on forever then you’re very naïve. The real question is: when will the party end? I had a deep conversation with the chairman a few years ago, and even before Covid we were worried about the overheating of economies and the fact that a cycle can’t last forever. We decided as a firm, particularly in London and the US, to invest in distressed debt and restructuring lawyers. Firms that haven’t done that are going to find it very difficult to hedge a potential downturn in market.’
Dominic Griffiths, London managing partner, Mayer Brown
Critical mass
‘When I speak to recruiters, I get the impression that everyone is looking to fill out their corporate benches. The year before last it was leveraged finance. We tell them we want equity capital markets and venture capital and data protection, but everyone is picking the bones out of M&A. There’s so much transactional work right now that firms are just trying to hire bodies rather than build a business. We’re struggling to find corporate associates with the right level of talent.’
Mark Rowley, partner-in-charge of London office, Baker Botts
Magic’s gone
‘Clearly Magic Circle firms have figured out that in order to continue to compete with US-based law firms, they need to continue to invest in the US. When it comes to English law, I don’t think clients are as focused on where a firm is headquartered, and they are willing to use a US law firm. The same is not true in reverse. The premier US firms have a real advantage in terms of size, scope and history in the market when it comes to major US law-driven matters. The Magic Circle firms are not viewed in the same light, and it will take a long while for them to catch up.’
Pranav Trivedi, London office head, Skadden
On fire
‘It was a very busy, very successful year. It’s hard to pick out one area that was behind this because the office really was firing on all cylinders. There was a very strong client demand across pretty much all of our practice areas and that was driven by a buoyant M&A market, buoyant capital markets, a lot of IPOs and a busy credit market.’
Stephen Kensell, London managing partner, Latham & Watkins
Powder dry
‘The strength of the private equity markets is mostly driven by the ability of private capital to be nimble and find ways to deploy capital in almost any market cycle. Obviously, we are seeing macro events unfold in Europe that could not have been predicted, and they can have market impact, but private capital can adjust to almost any market event or market dislocation and still be active. In addition, there’s a lot of capital that the private equity houses must deploy. When you look at what the fundraisings were in 2021, there’s still quite a bit of dry powder.’
Tom Thesing, London managing partner, Sidley
Stiff competition
‘Firms that have been growing very slowly over the last five years will continue to struggle. In this market, you’ll struggle if you aren’t able to look after clients and put a good team on the field quickly. There’s just too much competition from good law firms. Many clients have an eye to the US and want to be doing activities there. As such, many of these companies want to work with a US firm because they want access to that market.’
Justin Stock, London managing partner, Cooley