Elite City law firms face major financial and strategic hurdles breaking into the US legal market, as fierce competition for top talent and high partner compensation make organic growth and brand-building especially challenging, writes Maria Ward-Brennan Breaking into the US has been on the agenda of many elite English law
Maria Ward-Brennan
Thursday 16 July 2026 6:00 am | Updated: Wednesday 15 July 2026 3:25 pm
Elite City law firms face major financial and strategic hurdles breaking into the US legal market, as fierce competition for top talent and high partner compensation make organic growth and brand-building especially challenging, writes Maria Ward-Brennan
Breaking into the US has been on the agenda of many elite English law firms, most notably four-fifths of the magic circle, but building a brand in the New York market is not easy. It requires spending a lot of cash.
There are two global hubs for law firms to thrive – London (thanks to English soft power) and New York.
It has been well established that elite US law firms have moved into London over the last decade and taken the market by storm. Now the elite are trying to flip the board and bring their brand across the pond, but it won’t be as easy as it was for the Americans in the City.
Some firms opted to merge with US firms that have an established brand awareness for US clients, such as Allen & Overy merging with Shearman & Sterling, a historic, New York-founded white-shoe law firm in 2024, or the recent merger of Hogan Lovells with one of New York’s oldest law firms, Cadwalader, Wickersham & Taft.
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Others, such as Freshfields, Linklaters, and Clifford Chance, have opted to grow organically by opening new offices and bulking them out with known lawyers. This week, Linklaters revealed it snagged two of FIFA’s lawyers from Paul Weiss’s New York office to bolster its litigation, arbitration and investigations practice.
Money talks
The problem with the latter plan is that it requires substantial capital.
Max Campbell, a New York-based headhunter, said: “Where US firms entering the London market were able to attract recognised talent with large compensation packages, magic circle firms have not been able to do the same as easily in the domestic US market.”
City lawyers are well paid – is it a running gag that in London, lawyers are the new bankers. As a result of the US expansion project into the City, the most junior lawyers at top firms are earning between £150,000 and £180,000. While most partners at elite firms are millionaires, the average profit per equity partner (PEP) ranges from £2m to £3.5m in the magic circle.
Read more Magic circle Freshfields ousts equity partners amid US push
While paychecks put the sector in the top one per cent of earners in the UK, they don’t scratch the surface of what elite lawyers are pocketing in New York. In the Big Apple, Big Law average partners take home between $5m and $12m.
This week it was revealed that senior partners at Freshfields were forced out as the firm focuses on boosting growth to fund its US expansion.
“The reality is that firms competing at the very top of the US market need greater flexibility to reward their highest-performing partners,” says Nick Woolf, partner at Woolf&Co. “Traditional lockstep systems can struggle to accommodate that. What we are seeing is the continued influence of US compensation practices on the leading UK and international firms.”
This move comes as the elite legal giant also introduced a strict performance-based compensation system last year, stripping equity points from long-serving European partners to compete with rivals in New York.
“Freshfields is effectively acknowledging that the economics of the global legal market are increasingly being set by the US firms. Once you decide to compete for the same talent, it becomes very difficult to maintain a compensation system built for a different era,” Woolf added.
Ultimately, City giants’ attempt to conquer the lucrative New York market means more firms will undergo fundamental restructuring of their traditional compensation models.
“Without either sufficient domestic brand recognition or requisite capital to compete with the large offers from leading US firms domestically, decisive strategic expansion through the hires of top talent is very difficult,” Campbell added.
Eyes on the Law is a weekly column online and in the newspaper focused on the legal sector.
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