The Race for Partners: How Lateral Hiring Is Reshaping London’s Legal Market

Introduction

Lateral hires in London are at historically high levels, and this is continuing to reshape London’s legal market and the way and speed at which firms grow. Partners at prestigious law firms have long been a valuable commodity, but recently, substantial compensation packages and other incentives offered by firms looking to attract partners have shown how much value is placed on a senior lawyer’s connections, expertise and ability to generate business.

According to Edwards Gibson, 668 partner moves were announced in 2025, up 21% on the previous record of 551 in 2024. A further 319 partner moves were recorded in the first half of 2026, the second-highest first-half total in its records. These figures count announced partner-level moves, not only moves between existing partnerships, so they should not all be treated as lateral hires in the strict sense. [1][2] This data presents two questions: why are so many partners moving, and what is the impact of such an active lateral hiring market? This article will explore both questions, looking beyond compensation packages to examine where partners are coming from, where they are going and whether this high rate of movement is sustainable in the long term.

Why Are There So Many Lateral Hires?

Edwards Gibson notes an interesting trend in the legal industry. Firms are redesigning the way they invest in different practice areas as they continue to grow. Two things are happening in particular. Most crucially, some firms are directing more investment towards practice areas that can bring in higher revenue, including corporate, private equity and other private-capital-related work. This does not mean that lower-grossing practice areas, such as employment law or real estate, are inherently unprofitable; their value depends on a firm’s strategy, clients and margins.

Second, firms may be reducing practices that create significant client conflicts. This means that, for example, a firm may decide to reduce a practice that could prevent it from representing a major corporation in another matter. It is essentially a trade-off that allows the firm to prioritise the practice or client relationship it considers more valuable. The result can be an increase in partner movements. Firms reducing investment in certain areas may seek partners who specialise in higher-grossing areas, while other firms may have an opportunity to recruit skilled lawyers from practices being scaled back. These lawyers are not simply ‘scraps’: a practice that is less attractive to one firm may still be profitable for another.

Connected to this is the increasing prevalence of group lateral hires. This is where an entire team, or several partners and their wider team, are recruited by a law firm, with the intention of bringing across their expertise, client relationships and connections. Edwards Gibson’s 2025 report recorded several multi-partner team moves, including Fladgate’s recruitment of a nine-partner team from Memery Crystal. [1] These moves show how a firm can build a practice more quickly than it could by recruiting and training lawyers individually. Group lateral hires can, however, be riskier and more expensive than individual hires. Clients do not automatically follow a team, and the hiring firm must consider compensation, integration, conflicts and whether the expected work will materialise. When successful, these moves can be highly profitable.

The legal market in London is also seeing a certain amount of ‘Americanisation’. US firms have expanded in London, particularly in corporate and private-capital-related practice areas, and this has contributed to competition for experienced partners and teams. Partnership structures are part of this picture, although they vary between firms. Some firms have equity and non-equity partnership tiers, while others use a combination of seniority-based remuneration and performance-related elements. These structures can give firms more flexibility when recruiting partners, but it would be inaccurate to suggest that all American firms use the same system or that two-tier partnerships were created solely to enable external hires.

The main theme here is that firms are hiring partners and teams to become more competitive and profitable. What we see, however, is that competition for lawyers who can bring substantial client relationships or revenue can increase the compensation packages offered to potential partners. Firms can find themselves in a compensation arms race, and partners may benefit from the resulting competition. This, in turn, can cause further lateral movement as partners are attracted by higher compensation and new opportunities, making the process a continuous cycle. Therefore, this challenges the idea that lateral hires are caused mainly by compensation; many other factors must be explored before coming to that conclusion.

Where London’s Partners Are Moving

Expectedly, the firms that are able to attract highly sought-after lawyers are typically those that can offer substantial compensation packages and a convincing platform for the lawyer’s practice. In general, London’s legal market has seen prominent recruitment by elite US law firms specialising in corporate and private-capital-related work. Their established operations in the United States and other major markets can generate revenue and provide access to clients and transactions that support investment in London. London’s Magic Circle and other major UK firms also recruit valuable partners, although the scale and focus of hiring vary by firm and practice area.

US firms active in lateral partner hiring include firms such as Kirkland & Ellis, Paul Weiss, Paul Hastings, Sidley Austin and White & Case. UK firms pursuing growth, including Addleshaw Goddard and Shoosmiths, have also been active recruiters. Edwards Gibson’s figures show, for example, that Addleshaw Goddard and Shoosmiths were among the leading recruiters in 2025. [1] It is important, however, to distinguish total partner hires from lateral hires, since some reported moves involve promotions to partnership upon moving from another firm.

In terms of where these partners are coming from, traditional UK firms, including Magic Circle and other leading firms, have been important sources of talent for competitors. Firms looking to grow in the UK or Europe may look to London’s experienced lawyers to lead or expand a practice. There is also movement between US firms as rivals compete for partners and teams. In-house lawyers also move into law firm partnerships, although Edwards Gibson’s data shows that these make up a relatively small proportion of total moves. In the first half of 2026, 14 moves, or 4% of the total, were from in-house roles into law firm partnerships. [2]

The Commercial Consequences of Lateral Hiring

Such an active lateral hiring market has significant implications for London’s legal market and law firm economics.

Primarily, the way that law firms expand or introduce new practice areas can change. Previously, firms would use their existing talent to do this by investing in training and development. However, this can be time-consuming, as it takes time for firms to become competent in a completely new practice area. With increased hiring activity among partners, a firm can recruit a partner or an entire team from another organisation, potentially accelerating that process. Essentially, instead of building a practice entirely from within, firms can acquire an established team that brings expertise and, potentially, client relationships.

In conjunction with this, growth can become riskier. When a firm hires a high-performing team from another organisation, it may need to offer substantial compensation to persuade the partner and the team to move. The investment in salaries and other costs can be considerable. Although training is time-consuming, organically building a practice may allow a firm to develop talent and client relationships over time. Lateral hires, however, carry their own risks. A firm may hire a team and commit to significant annual costs without receiving the expected return. Clients may not follow, or the partner may not generate the work anticipated, quickly turning an investment into a mistake. In some cases, lateral hiring takes time before it becomes profitable. The attraction is that it can accelerate growth, but firms must weigh that potential benefit against the cost and uncertainty.

Moreover, changes at larger firms can leave opportunities for smaller city or regional firms to develop expertise in certain areas. As mentioned, some firms may reduce or downsize practices that create conflicts with valuable clients or that are less central to their strategy. This can allow other firms to recruit lawyers who specialise in those areas. For example, work in conveyancing, personal injury or public-sector matters does not disappear simply because a large firm decides to place less emphasis on it. Demand may remain, allowing smaller firms to develop or strengthen practices. However, this is an opportunity rather than a guarantee: clients and work do not automatically transfer when lawyers move.

Finally, activity in the lateral hiring market can influence compensation structures. Some law firms have traditionally used ‘pure lockstep’ systems, in which partners’ profit shares are linked primarily to seniority. However, firms use a range of models, and performance-related elements are not new. Competition for partners who bring substantial business can increase pressure to offer more flexible remuneration, meaning that a newer partner may sometimes earn more than a more senior colleague. Some firms also have non-equity partner tiers. These can allow lawyers to hold partner status without receiving the same equity stake as equity partners, helping firms expand their partnership ranks while managing how profits are shared. The details vary between firms, so these structures should not be treated as universal.

Conclusion

All of this partner movement among firms in London cannot automatically be classed as a good or bad thing. As with anything else, there are benefits and disadvantages. But the main theme here is change. Practice areas are changing, partners are changing, teams are changing, law firm economics is changing, and above all the legal market is changing. This raises the sustainability question: is all of this change sustainable in the long term?

From a realistic perspective, there will always be partner movement, but in my opinion, movement at today’s levels raises questions about long-term sustainability. If recruitment costs continue to rise, firms may find it increasingly difficult to justify the investment when expected revenue does not materialise. Smaller firms specialising in corporate law may also struggle to compete with the compensation packages and resources available to larger US and Magic Circle firms. However, it is too early to conclude that smaller firms will become obsolete or that large firms will monopolise corporate practice areas. Internal tensions can also arise when newer partners are paid more than colleagues with greater seniority, potentially affecting morale and the stability of a practice. All in all, London’s legal market is at an interesting phase and presents much to be monitored.

Sources

[1] Edwards Gibson, “Law Firm Partner Moves in London – Issue 90” (November–December 2025). Read source.

[2] Edwards Gibson, “Law Firm Partner Moves in London – Issue 93” (May–June 2026). Read source.

Cover image: Rob Bye, “Foggy London skyscrapers”, via Wikimedia Commons, CC0. Image details and licence.