US law firms have made a major impact on the London marketplace, gaining leading roles in big-ticket work and leaving UK law firms increasingly squeezed. Despite many of the 100 or so in London not covering all their costs, they are picking up lead roles on M&A and private equity transactions and corporate and securities investigations as well as pouncing on the best lateral hires. According to the 2018 Client Advisory report,  a club of about 15 law firms have emerged, 10 US firms and five Magic Circle firms - which get the best work globally leaving the next tier of UK law firms on the sidelines when it comes to winning major transactions.

More committed than ever to London

The report, by Citibank, reviewed the legal marketplace in 2017 across the globe. It said the UK market was 'something of a roller coaster' which improved with firms achieving a two to four per cent growth rate whilst those with an international presence achieved double-digit revenues, albeit through sterling's weakness. It said that US law firms had around 5000 UK lawyers working for them now and a number of them were 'more committed than ever to the London market.' However, it added that there were challenges in the London offices of less focused US firms and noted that multiple merger discussions were occuring. The report highlighted Germany as an active market for merger discussions with profitibality of German firms  struggling to match that in London or the US.