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Linklaters has undertaken a review of its banking practice, coming just months after Freshfields carried out a similar assessment of its City department.
The review is understood to have started last summer in a bid to improve profitability in the practice.
Sources say discussions have led Linklaters to trim equity points in the practice by over 100 – falling in line with a trend of magic circle firms having to adopt their models as a results of relatively static turnover growth.
In 2015/16, Linklaters’ revenue grew 3 per cent to £1.31bn after an increase of 1 per cent in 2014/15.
The results were similar to that of Clifford Chance and Allen & Overy (A&O), which both posted a 2 per cent jump in revenue. Freshfields Bruckhaus Deringer meanwhile saw gains of 6.6 per cent.
The review, which is now completed, is understood to have most affected senior figures at the top of Linklaters’ equity.
A number of partners said lawyers “felt under pressure to leave” as a result of the review, with news spreading in the last few weeks of an uptick of Linklaters CVs on the market.
“This has been on the cards for a long time,” said one source. “A lot of the UK’s finance firms are dependent on revenues from the banks. But this is difficult to maintain given the challenge from alternative lending or funds work.”
Linklaters maintains there are no plans to reduce headcount in the practice, making up one banking lawyer in its most recent promotions round in the City.
However, it has already lost a number of banking partners worldwide including German banking and financial restructuring head Kolja von Bismarck to Sidley Austin in Munich. Sidley has also hired two Linklaters restructuring lawyers in the last few months.
Fellow magic circle firm Freshfields started to restructure its finance practice last May, resulting in the consolidation of teams such as asset, project and aviation finance into broader umbrella groups.
The review was first mooted towards the end of last year following several senior finance hires, including high-yield star Ward McKimm from Kirkland & Ellis. Freshfields also took Andy Hagan from Kirkland for the same team in February.
Linklaters was contacted for comment.
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