Back in the Dark Ages when I had recently started my recruitment career, I spoke with a polite yet reserved magic circle partner. Cordiality reigned until the point I suggested he might want to bring a partner across to the firm I was promoting. The hearing in my right ear remains muffled.
The concept of a 'team move' or, to use US parlance, acquiring a 'group' is not new. Nonetheless, as with all things in the City lateral market today, rapid evolution and an increasing appetite to hire in quantity from a competitor has been driven, in the main, by US firms. Contractual restrictions, garden leave clauses, extended notice periods and non-solicitation clauses do occasionally put a spanner in the move. However, invariably, after a period of negotiation and the desire to get on with it, business prevails.
The benefits of a team move are obvious. The group has worked together and understands each other’s working practices. It offers cohesion and the opportunity for the acquiring firm to fill or materially enhance its presence in a practice area and bring on board new clients whilst avoiding protracted merger discussions.
Of course, there are risks. For example, creating a 'firm within a firm' or, in other words, the danger that the commercially muscular team simply does not, or will not, assimilate to their new firm’s culture, leading to unhappiness on both sides.
However, team hiring was identified as a key sector trend for the year ahead in Major, Lindsey & Africa’s recent Global Law Firm report. In fact, our research indicated that, in both the UK and the wider market, firms now prefer onboarding two-to-three partner teams over individual partner hires, so long as doing so does not upset the ratio of partners per associate.
Indeed, one can find recent high-profile examples littered across the global market. In February, Shepherd and Wedderburn successfully poached an entire 20-strong private client team from Dentons, and last March saw a highly rated four-partner energy team move from Watson Farley & Williams to Orrick.
Lateral hiring is a complex and detailed undertaking for a firm – whether that be an individual partner or a team. However, the efficiency and pace now applied by many firms when hiring is materially changing the lateral partner process. That said, whilst absorbing the use of technology into processes is going to be key and is a powerful tool to utilise when appropriate, it cannot replace face-to-face meetings entirely.
Ultimately, we will see continued appetite for teams in the City and in the major financial centres across Europe; it makes sense. Risk and reward must be weighted on both sides of the table, but the commercial effect of acquiring a high-performing team can accelerate market penetration and erode market share held by competitors.
Seamus Hoar is senior partner at Major, Lindsey & Africa