Ten years ago you would not be able to find a US lawyer at a prestigious firm such as Milbank Tweed who would seriously consider jumping over to a UK firm. Now it is hard to find US securities lawyers in Asia who have not considered that jump.

The latest move comes as Ian Johnson leaves Milbank Tweed Hadley & McCloy, where he was of counsel, and moves to Allen & Overy as a partner. Yoon Shin, who was an associate with Johnson at Milbank, joins him in the move. Johnson's role at A&O will be to expand the firm's distressed debt practice, the hottest product in Asia at the moment.

Johnson brings with him an impressive pedigree. During his three years at Milbank in Hong Kong he represented a number of investment banks on their distressed debt dealings, including Merrill Lynch and Lehman Brothers. In particular, he worked on the Lehman Brothers/Woori NPL joint venture that is seeking the resolution of nearly $8.4 billion of bad loans from various Woori subsidiaries (FinanceAsia's Best Distressed Debt Deal of 2002, see FinanceAsia December 2002 issue). In total he has worked on some 40 distressed debt deals in the region.

When Johnson joined Milbank in Hong Kong three years ago it was envisaged that he would be spending most of his time on private equity deals and M&A. But those areas have proved nowhere near as busy or lucrative as distressed debt. Interestingly it is when Asia's markets start to pick up that bad debts start to get resolved.

"Even in the current economic climate, the distressed debt market has continued to be extremely buoyant given the levels of non-performing assets in Korea, China, Taiwan, the Philippines and other parts of Asia," says Brian Harrison, head of Asia of Allen & Overy. "As distressed debt encompasses elements of restructuring, M&A and structured finance, Ian's diverse background will definitely make him the ideal candidate to spearhead our development in this exciting area and capitalize on opportunities in this market."

Johnson's move to the 'magic circle' firm is the latest in a trend of senior US lawyers who have transferred from US to UK firms. Over the past decade, the UK firms have rapidly increased their profitability and now partners at UK firms earn as much if not more than those at US firms, according to the avidly read rankings in American Lawyer magazine. Thus from a purely economic point of view, there is little to choose between the two types of firm in the region.

However, the UK firms also make a point of practising local law wherever they can in Asia, unlike most of the US firms. And Asia's markets these days are all about local law. There are not enough large, international deals coming around to keep all the international lawyers in Dupont ties. Indeed, in areas such as distressed debt, having a local law capability seems to be crucially important.

"I am delighted to have joined a firm with such a strong commitment to Asia," says Johnson, commenting on the move. "The depth of the firm's Asian practice with its large footprint in virtually all of Asia's financial centres and wide range of services provided will greatly enhance my ability to serve our distressed debt and other clients better. I am particularly excited about the firm's significant expansion in China as I expect that the distressed debt market there is poised to grow rapidly."