'Nobody wants to miss the party': London firms continue to bet big on private equity

While private equity may be grappling with more challenging exit routes and an evolving deal landscape, on the hiring front, London law firms are still going full throttle.

According to a new report from transatlantic legal recruiter Macrae, in the first half of this year alone, there were 21 private equity partner moves - up from 13 during the same period in 2024, and ahead of both 2023 (17) and 2021 (8). The trend continued into July which was particularly active, with DLA Piper, Mayer Brown, Latham and Freshfields all announcing high-profile PE hires.

At the current pace, 2025 is on track to surpass each of the past five years in total PE partner moves. Macrae recorded 28 in 2024, 31 in 2023, 12 in 2022, 22 in 2021 and 15 in 2020.

Unsurprisingly, US firms have set the pace. Of the 129 partner moves since 2020, 80% of laterals joined top 50 US firms, while 56% of exits came from that same group. The top 15 UK-headquartered firms have accounted for just 13% of arrivals and 17% of exits over the past 18 months.

No sign of slowing

Despite some question marks around the sustainability of PE-led growth - the Financial Times recently reported that private equity firms are making record use of continuation funds (another fund set up by the same PE group to buy companies from an existing fund nearing the end of its life) as firms navigate a more challenging exit environment - recruiters say law firms remain undeterred.

"We haven’t seen any signs of concentration risk for firms that are focusing on building private equity practices", said Siobhán Lewington, a partner at Macrae in London. "Quite the opposite - firms are focusing on the risk associated with not building private equity capability. There is this real fear of being left behind and nobody wants to miss the party."

That’s reflected in the types of hires being made. According to Macrae, 70% of PE-related partner moves in the last 18 months have been "plug-and-play" laterals with existing books of business, not external promotions or moves from in-house.

Firms scrambling to catch up

David Morley, former Allen & Overy senior partner and now co-founder of legal consultancy Dejonghe & Morley, said the intensity of the lateral market was no surprise.

"PE remains the engine room of premium transactional work, and firms underweight in the sector are scrambling to catch up", he said. "Add in aggressive US firms doubling down, and the economics of big books, and churn is only going to intensify."

"It’s putting real pressure on the traditional partnership model. Unlike their PE clients with capital and carry at stake, law firm partners have little to lose by moving. Even firms like Wachtell and Cravath are feeling it."

How long can it last?

The continued growth in PE partner moves can only reflect a deep belief in the sector’s long-term prospects from firms, even amid a slowdown in traditional exit routes.

But with so much top-tier hiring now focused on private equity, firms may have to start asking what happens if the deals don’t land as fast as the partners do.