In a significant reshuffling of legal talent within New York’s elite financial law circles, a high-profile team of leveraged finance attorneys has departed Latham & Watkins to join rival firm Paul Hastings. The move represents one of the most noteworthy lateral shifts in the specialized field this year, potentially altering the competitive landscape for legal services in debt financing.
The team, led by several veteran partners with decades of combined experience, brings with them established relationships with major private equity firms and investment banks. Sources familiar with the matter indicate the transition involves attorneys specializing in complex leveraged buyout financing, high-yield debt offerings, and restructuring work.
“These types of moves can significantly impact client relationships and deal flow,” explains Gregory Peterson, managing director at Legal Recruitment Analytics. “Leveraged finance remains a cornerstone practice for elite law firms, especially those servicing private equity clients who rely heavily on debt financing for acquisitions.”
The timing is particularly noteworthy as leveraged finance activity shows signs of rebounding after a challenging period. According to data from Refinitiv, leveraged loan issuance in the U.S. has increased approximately 15% year-over-year, reaching $283 billion in the first half of 2024, though still below pre-pandemic peaks.
The lateral move underscores the continued premium placed on specialized finance expertise as law firms position themselves for an anticipated uptick in deal activity. Federal Reserve officials have signaled potential interest rate cuts later this year, which typically stimulates borrowing and financial engineering in the leveraged finance market.
Market observers suggest the team’s departure likely came with substantial compensation guarantees, reflecting the high-stakes competition for rainmakers in specialized practice areas. Elite leveraged finance partners at top New York firms typically command compensation packages exceeding $5 million annually.
“Law firms recognize that leveraged finance expertise is a difficult capability to build organically,” notes Sarah Williams, editor at Legal Practice Intelligence. “These practitioners bring immediate revenue potential and strategic client relationships that can take decades to develop internally.”
Paul Hastings has been aggressively expanding its transactional practices in recent years. The firm reported average profits per equity partner of $4.25 million in 2023, according to data from The American Lawyer, positioning it competitively among elite law firms for talent acquisition.
The team’s departure creates both challenges and opportunities for Latham, which has historically maintained one of Wall Street’s premier leveraged finance practices. Industry analysts will be watching closely to see how client relationships migrate and whether additional attorneys follow the partners to their new platform.
For corporate clients, the movement of senior legal talent can create both opportunities and complexities. “Sophisticated financial institutions and private equity sponsors often maintain relationships with individual partners rather than firms,” explains Michael Thomas, finance director at Acquisition Capital Partners. “These moves can trigger reassessment of outside counsel panels and potentially lead to fee negotiations as firms compete for retention.”
The leveraged finance legal market has experienced substantial evolution since the 2008 financial crisis, with increased regulatory complexity driving specialization. Attorneys in this field navigate intricate capital structures, covenant packages, and compliance requirements across multiple jurisdictions.
Beyond the immediate impact on the firms involved, this move reflects broader trends reshaping the legal industry. Law firm loyalty continues to erode as lateral movement normalizes, particularly for partners with portable business. According to data from legal consultancy Altman Weil, partner mobility has increased 37% over the past decade.
Looking ahead, industry observers anticipate that this high-profile transition could trigger additional movement within the leveraged finance bar as competing firms reassess their strategic positioning. The practice area remains essential for firms with ambitions in the private equity and investment banking spaces.
As one senior banking executive who requested anonymity noted, “Having the right legal team can make or break complex financing transactions. These relationships are built on years of deal experience and crisis management. When key attorneys move, it creates ripple effects throughout the market.”
For now, all eyes will be on how client relationships transition and whether the team’s practice flourishes on its new platform at Paul Hastings. In the high-stakes world of leveraged finance, where billion-dollar transactions are routine, the movement of legal talent remains a critical indicator of market dynamics and competitive positioning.
