A variety of factors motivated recent moves.  For example, seven lawyers left the Geneva office of Hogan & Hartson upon announcement of its merger with UK-based Lovells, and moved as laterals to Akin Gump.  And some firms are making particular investments in particular legal specializations, e.g., Bingham (which picked up Susan Merrill, former head of enforcement for FINRA) and Cadwalader (which picked up Proskauer’s litigation co-Chair Louis Solomon and antitrust co-chair Colin Underwood, DLA’s Beijing private equity head Rocky Lee, and a 9-partner energy and commodities group from McDermott).

One firm that has been particularly active in bringing on laterals is DC-based Covington & Burling.  Among other 2010 acquisitions, Covington brought on board John Dugan (former comptroller of the currency), Edward Yingling (former president and CEO of the American Bankers Association), Gerald Waldron (former staff director and chief counsel of the House Select Committee on Energy Independence and Global Warming), Steven Fagel (former deputy chief of staff to Assistant AG Lanny Breuer), and James Garland, deputy chief of staff to Attorney General Eric Holder).  Outside the US, Covington added such lateral partner-level attorneys as Timothy Stratford (former US Trade Representative for China Affairs—Beijing office), Peter Camesasca (former Howrey antitrust attorney—Brussels office) and Robert Amaee (formerly of the UK’s Serious Fraud Office—London office).

Dewey & LeBoeuf also showed substantial activity, recruiting such big-name partner rainmakers as Henry Bunsow (IP litigation, formerly of Howrey), and James Carter (international arbitration, formerly of Sullivan & Cromwell).

Approximately 2,000 partners switched firms in the NLJ-250 in 2010, a number which may rise in 2011, in light of steady movement and significant developments like the demise of firms like Howrey during this year.  Partners considering a lateral move are encouraged to contact Charles River Recruiting for a confidential consultation.

Despite the lingering effects of the 2008-2009 recession, some law firms are benefitting from strong countercyclical practices.  Such may be the case at Cadwalader, where government investigations and antitrust- and financial services litigation have reportedly been strong.  And Curtis Mallet reports a 24% rise in profits per partner, to $1.41 million, on strong arbitration and bankruptcy results—e.g., the million dollars per month that the firm is reported to be billing in connection with the Lehman Brothers matter.  There are several implications of this for lateral law firm partner recruiting.  In the first place, diversified firms with countercyclical practices are likely to be attractive destinations for lateral partners challenged by their current firms’ concentration in disfavored sectors.  In addition, firms with booming countercyclical practices—e.g., bankruptcy—are likely to be hungry for even more talent in those areas, even as practitioners are in greater demand both at their own firms and elsewhere.

The year 2010 furnished more evidence that US-based firms are seeking international legal recruitment, with a continuing trend toward expanding their geographic footprints.  For example, demonstrating that European legal recruitment is quite active, K&L Gates opened two new offices in 2010 (Tokyo and Moscow), with Brussels slated to open in 2011.  These moves follow on the heels of K&L Gates’s expansion to Frankfurt, Singapore and Dubai in 2009.  Other firms opening opportunistically include Kilpatrick Townsend & Stockton, which just announced the establishment of a Tapei, Taiwan office with a team of four from Howrey.  New York-based Curtis Mallet recently opened in Ashgabat, Turkmenistan and indicates it is considering an outpost in Baku.  Bingham opened its second European office (Frankfurt); the firm’s first is in London.  Dechert opened an office in Dublin, Ireland while expanding its presence in Moscow.

UK firms have also expanded their international legal recruiting efforts, with four of the major London-based firms establishing or strengthening their Australia connections:  Morton Rose, Allen & Overy, DLA, and most recently Clifford Chance.

Domestic US firms have also been searching for legal talent while expanding their geographical footprint.  For example, Gordon & Rees recently recruited 2 partners in Atlanta from Epstein Becker & Green, including C. Anthony Mulrain, who will head his new firm’s sports, media and entertainment law practice.  Akin Gump picked up several IP (intellectual property) partners from Woodcock Washburn in Philadelphia.  And Bingham expanded its Washington, DC presence with the acquisition of McKee Nelson and its 120 tax and structured finance specialists.

Debevoise is another firm that attributes its results to cost-cutting efforts in the past few years, according to presiding partner Martin Frederic Evans.  (Debevoise’s profits per partner were up 11%–to $2.06 million on revenue that was down by 1.6 % to $657 million).  Dechert also saw profits up (2.6%) despite down revenue (-9%) in 2010, with gross income of $649 million and profits per partner of $1.41 million.  This may be attributable to the fact it is now a much smaller firm:  headcount was down 8.8% between 2009 and 2010, on top of a 12% decrease in 2008-2009.

DLA also appears to be reaping the benefits of a leaner operation.  Its US headcount (1,167), is down by 210 lawyers in 2 years.  Meanwhile, profits per partner jumped 12% to $1.38 million in 2010, as US revenue inched up only 1% to $1.03 billion.  Minneapolis-based Dorsey & Whitney likewise demonstrates the positive effect that “downsizing” has had on many firms’ profits per partner:  its profits per equity partner rose 4%, to $522,000 on a revenue decline of 6%, to $322.7 million, in 2010.  Dorsey, like other major firms, saw its attorney ranks decline from 613 to 567 since 2008, while it also reduced its number of partners, from 277 to 266.

The implications of these numbers for lateral partner recruiting are unclear.  Perhaps firms that have already squeezed out additional profit per partner through cost-reduction measures will appear relatively attractive to partner-level lateral candidates.  On the other hand, firms that are too leanly-staffed present a challenge to potential lateral partner attorney candidates because those candidates may seek, among other factors, a firm with sufficient associates to staff their client matters.

San Diego recruitment Fitzgerald hailed his former firm as top-notch, but said that his practice will be better suited to San Diego litigation boutique Chapin Fitzgerald Sullivan (CFS).  That practice includes plaintiffs work, which few large firms are able to accommodate.

However, there has been a trend of Am Law 200 IP litigation partners moving to smaller firms due to price pressure from clients.

The American Lawyer quoted Fitzgerald as saying he had once called up former Latham mentor and CFS founder Joseph “Jay” Wheeler and “hearing him scream across the office to [longtime friend] Ed [Chapin] about a conflicts check.  And he [quickly] had his answer."  (Latham, on the other hand, has 2100 lawyers).

Schwartzbaum will land at Greenberg Traurig’’s New York office. Revenue at the 1,730-lawyer firm in 2008 was $1.2 billion, while profits per partner increased slightly to $1.3 million.

Jones Day in Paris recruited Baud and Latham associates Aurélie Verdier and Nathalie Marchand.

And Allen & Overy recruited Baud’s former partner Jean-Christophe Tristant, an IP licensing and litigation lawyer.

According to Am Law 100 data, Latham’s profits dropped over 20 percent in 2008, and profits per partner fell from nearly $2.3 million to $1.8 million.  Latham laid off 90 associates and 250 staff members early last year, but recently opened an office in Beijing.

Read more.

White & Case recently recruited eight lawyers and 42 staff from German insolvency boutique Schröder Rechtsanwälte.  The Berlin legal recruitment took about half the German law firm’s lawyers.  The team will focus on “major and difficult insolvency proceedings.”

Action on the continent is looking promising, but it’s too early to say whether 2010 will be a better year for lateral moves.

Some in Hong Kong are worried, but should they be?

Hong Kong has been booming.  Its exchange has had more public offerings than any other in the world.  It’s a banking power with a well-developed and trusted legal system.

Shanghai Legal Recruiting vs. Hong Kong Legal Recruiting

But Shanghai was Hong Kong before Hong Kong was Hong Kong.  Before the communists took over in 1949, Shanghai was the area’s leading financial center.  With communists still in charge, will they keep their largesse on the mainland?

Still, Shanghai has a long way to go in setting up the appropriate infrastructure – a well-educated population of English speakers, a stable legal system, a convertible currency — and some think 10 years is too soon.

And, as Anthony Lin points out, “such surveys [as Eversheds’] are to be taken with a grain of salt; after all, over a tenth of Eversheds’ respondents predicted Dubai would emerge as the world’s preeminent financial center in decade’s time.”

Some years ago, mainland Chinese companies that made an initial public offering in Hong Kong would also list their offering on a U.S. market. Such dual listings are now more rare – and that presents lost opportunities to U.S. firms that have no capabilities in the market that last year led the world in IPOs, at $27.2 billion. (But see predictions that legal recruiting will turn to Shanghai within 10 years).

But not all firms consider these facts dispositive.  Some lawyers point to the reduced fees and lower profit margins available in Hong Kong as compared to U.S. legal practice.  Others believe it’s harder to maintain a consistent level of high quality work in foreign-law practice.  Simpson Thacher & Bartlett, Davis Polk & Wardwell, and Sullivan & Cromwell have historically stayed away, or focus on U.S. IPOs for China-based companies.

Still, firms like Shearman & Sterling, London’s Magic Circle and major U.S. firms like Latham & Watkins and Skadden, Arps, Slate, Meagher & Flom, have a long history of establishing local practices globally.  Indeed, Anthony Lin writes in The Am Law Daily blog on AmericanLawyer.com that Shearman & Sterling has recently acquired a Hong-Kong-ready practice by recruiting partners Colin Law and Peter Chen from O’Melveny & Myers. Law, who will lead the office, is experienced in capital markets and once worked for Lovells.

Matthew Bersani, Shearman’s Asia managing partner, says more and more clients are looking for "one-stop-shop" firms. "In Hong Kong listing work, it’s very rare now to see separate U.S. counsel hired.”

Mr. Lin points out that Hong Kong offers only one bar exam a year, in October, and that firms who are merely considering a move may be wise to have their attorneys take and pass it:  “The Hong Kong Law Society requires foreign firms practicing local law to have an equal ratio of Hong Kong-qualified and foreign-qualified lawyers. Having U.S. lawyers who can also be counted as Hong Kong lawyers makes it much easier to meet this ratio requirement should a firm decide on local practice.”

Related:  Mayer Brown calls its merger with Hong Kong’s largest law firm, 260-lawyer Johnson Stokes & Master, an unqualified success.

The Company You Keep

In some markets, you’ve got to be wary of very rich clients, and do your due diligence.  Mainland China, like Russia, has a lot of new and often corrupt wealth.  And some lawyers learn that the hard way.

In 2002, Forbes named Shanghai property developer Zhou Zhengyi the 11th richest man in China.  Not long after, he came up with some tricky methods to acquire a publicly traded company that did property development.  It happened to be part of a history of fraud and corruption, and he ultimately got 19 years in prison.  But that’s not the interesting part, which is:

His lawyers joined him in prison.

Well, maybe not the same prison,  But the three Hong Kong lawyers who worked on his deal — Donald Koo and Vivien Fan of Paul, Hastings, Janofksy & Walker’s Hong Kong office and Simon Lai of Hong Kong-based Deacons – got terms of 2-3 years for drafting the disclosure documents that concealed Zhou’s plans from investors and regulators.

That has led to a lot of soul-searching on the need for more due diligence in wild-west markets like Russia and China, especially on clients whose situations seem too good to be true.

Read the full story of the Hong Kong lawyers caught up in Zhou’s fraud.