London partner market cools amid top-tier talent squeeze

London’s lateral partner market recorded its slowest opening quarter in three years in Q1 2026, according to a new report from legal search firm Macrae.

There were 122 partner moves during the quarter, down from 151 in Q1 2025, pointing to a more subdued start to the year after several years of elevated activity across the City market.

Siobhán Lewington, a partner at Macrae in London, said: “The market is extremely competitive. There’s intense competition for the best talent, and lawyers who are moving often have competing offers or counteroffers from their current firms.

“At the top end of the market, there simply is not enough top-tier talent to go around.”

The practice mix

Despite the overall slowdown, corporate and finance continued to strengthen their hold on the London lateral market, making up over 40% of all moves in Q1. Both practice areas reached new Q1 highs as a share of total activity.

“We’ve seen a noticeable increase in demand for strategic M&A over the last six months,” Lewington said. “Firms are focused on growing those practices - it’s no longer just about private equity.”

The report also pointed to sharper divergence across other practice areas. In financial services regulatory and insurance, a niche area, activity fell significantly, dropping to less than 2% of total moves from more than 8% in Q1 2025.

Bankruptcy and restructuring recorded its third consecutive Q1 increase, rising to more than 7% of moves. The trend also reflects how restructuring work has become increasingly international, with London emerging as a key venue for large cross-border debt workouts and restructuring plans.

“The secondaries market remains very hot,” Lewington added. “We’re also seeing strong demand for commercial litigation, restructuring, and leveraged finance continues to be very tight at the top end of the market.”

Active firms

Hiring activity was led by a mix of US and UK firms - Paul Hastings, Pinsent Masons and Sullivan & Cromwell.

Ashurst, DLA Piper, Eversheds Sutherland, Norton Rose Fulbright and Sidley Austin also featured among the most active firms in the London lateral market during the quarter.

Despite the softer headline numbers, Lewington said demand for leading lateral talent remained strong.

“We’re not seeing any slowdown in demand,” she said. “If anything, the real issue is a shortage of talent in the areas where demand is strongest.”

“For UK firms, we may see a flurry of moves towards the end of Q2 and into Q3.”