US law firms outpace London rivals in race for larger City offices
American law firms with offices in London are taking up more space than their homegrown rivals as they push to aggressively expand.
Since 2020, more than 70 per cent of the 22 legal firms relocating office in London took up more space as they expanded headcount, with 14 of those US companies, according to new data from estate agent Knight Frank.
Knight Frank partner and head of tenant representation, Richard Proctor, told City AM that US-founded firms which already have a strong London presence, including Kirkland & Ellis and Latham & Watkins, know “that significant scale in London is important”, and that US firms are “the dominant element of the growth trend” of law firms expanding in the City.
“Not to say there are not UK firms who have also taken more space, but there is a slight dominance with US firms,” Proctor said.
Many American firms are opting to lease space in Bishopsgate in high-rise tower buildings, which Proctor ties back to firms from across the pond being “very used to towers”.
Offices designed to quash working from home
Proctor said many law firms, including those from the US, are designing office spaces in a bid to encourage employees to entice them into the office rather than working from home.
He added that many firms have “realised that you’ve got to get people to invest in their commute, particularly post Covid where people got used to the concept of effectively working from home.”
“A large part of what we’re seeing is creating an environment that encourages people to come in, because that’s what drives productivity, learning, and for younger members of law firms to be able to develop their careers and progress,” he said.
Knight Frank partner Jennifer Townsend told City AM aggressive hiring is driving the need for law firms to relocate in the City as they expand their presence in London.
“If you look at the London market, there’s been a very aggressive war for talent that’s been particularly driven by the large US firms,” Townsend said.
In order to tempt in and retain new hires, large American law firms are choosing and designing their office spaces specifically with state of the art gyms, dining spaces, and “quiet pods”.
“Obviously the office does have an integral role to play in terms of attracting and retaining talent, but also maximising the productivity of that talent as well,” Townsend said.
US firms drive pay war and nab high-stakes cases
US law firms are also driving a fierce pay war in London, leaving UK firms scrambling to keep up with surging pay for junior lawyers. City associates at Quinn Emmanuel in June saw their salaries increase by five per cent, with newly qualified (NQ) lawyers set to pocket £189,000, up from £180,000.
As well as taking up City office space, US firms are strategically positioning themselves in the London legal market by targeting high stakes disputes.
According to a report from consultancy, Solomonic, in May, US law firms are securing some of the biggest legal disputes in London and positioning themselves at the top of the litigation food chain.
The findings show over 100 law firms have “evidently established themselves as a go-to choice for the most complex, highest-value and most trial-intensive disputes in London”, with a few top firms taking on a large number of claims.