Instructions
Approach any group of thieves. They are clustered in packs of four, and you will see a symbol over the heads of the group to indicate that you can hire them. Thieves will also be wearing cheap and dirty clothes to more easily blend in with the local populace.
Press the "Triangle" button once you're next to the group of thieves to hire them. They will then follow you.
Press "L1" while near a group of guards to target one of them. Press "Triangle" again to send your hired group of thieves in to distract the targeted guards. This will take the thieves out of your service, and you'll have to hire another group to use thieves again. If you start a fight with guards while thieves are in your service, they will automatically fight the group of guards until the guards have been defeated or the thieves killed.