In the world of international law, contrasting trends are emerging. While several law firms are closing their offices in China, there is a surge in hiring in London, despite the UK economy being in recession.
Expansion in London
In the first two months of 2024, law firm partner hires in London ran at the second highest pace on record. This trend continues despite the UK economy technically being in recession. According to a report by legal recruiters Edwards Gibson, there were 101 announced partner-level hires in the UK capital in January and February. This is an increase of 7% on the same period last year, when there were 94, and up 9% on the cumulative five-year and 10-year averages of 92 and 93 respectively.
“Despite being naturally hedged with disputes and restructuring offerings, London’s BigLaw firms remain overwhelmingly transactionally focused. As such hiring at City law firms tends to reflect the strength of the underlying economy, so, with the UK now in recession, we might reasonably expect to see a slowdown in hiring relative to previous years,” said Scott Gibson, director of Edwards Gibson.
The rate of hiring was only higher in 2017, when the figure was artificially inflated following the collapse of KWM’s European arm. The report argues that the red-hot business law firm hiring market of early 2024 continues a trend seen in 2023 when U.S. firms bet heavily on the expectation that high inflation and global interest rate hikes would prove temporary.
This expansion in London is part of a larger trend in the UK legal sector, which remains resilient and is poised for growth in 2024. Despite a challenging economic climate, specific pockets of expertise remain in high demand. This is reflected in the steady growth of law firms, with utilization, realization and collection rates appearing healthy.
Retreat from China
On the other side of the world, Perkins Coie is the fourth law firm to announce an office closure in China within the last eight months. Other firms that recently closed offices in mainland China are Proskauer Rose, Akin Gump Strauss Hauer & Feld, and Latham & Watkins. Despite the closure of its Shanghai office, Perkins Coie emphasizes that it remains committed to its China practice and clients.
The closure of law firms in China is part of a larger trend as well. Since 2020, a string of prominent U.S. law firms including Orrick Herrington & Sutcliffe, Baker Botts, McDermott Will & Emery, Vinson & Elkins, and Latham & Watkins have closed at least one of their offices in China. Dentons announced last year its untangling from Beijing-based Dacheng, undoing a 2015 merger that catapulted the combined entity to become the largest law firm in the world. According to the Chinese Ministry of Justice’s annual report, the number of foreign law firms with operations in China declined from 244 in 2017 to 205 in 2022.
“China has one of the world’s most dynamic technology and business markets for established companies, venture capital, startups, and entrepreneurs and we remain committed as a firm to our China practice and clients,” a Perkins Coie spokesperson told Law.com International. “We are providing significant support to our lawyers and staff in Shanghai during this transition and truly appreciate their commitment to the firm and our clients.”
