How Big Law Firms are Growing: The Rise of Top Legal Professionals

SUMMARY

Big law firms are legal businesses that specialize in providing legal services to large companies and corporations. They are typically composed of hundreds of attorneys and support staff and operate in the high-end of the legal services industry. The primary focus of big law firms is on corporate litigation, regulatory compliance, international transactions and mergers and acquisitions.


Recently, big law firms have been experiencing a resurgence as an increasing number of companies are turning to them to handle their most complex legal matters. This is due to their expertise in areas such as international law, corporate law, intellectual property, bankruptcy and taxation. Furthermore, these law firms provide a level of service and expertise that many companies are not able to find elsewhere.

Another factor driving the growth of big law firms is the increasing demand for their services due to the globalization of the economy. With the emergence of new markets and business opportunities, many companies are turning to big law firms for legal counsel and representation. In addition, the demand for big law firms is being fueled by the rising complexity of corporate transactions and regulations, as well as the need to remain compliant with a variety of international regulations and laws.

In addition to their corporate clients, big law firms have also been quite successful in representing individuals in high-profile litigation cases. Their attorneys are well-versed in the legal intricacies of litigation and can provide expert legal advice on a variety of matters, including arbitration and alternative dispute resolution (ADR). This has led to a greater demand for the services of big law firms in areas such as real estate, family law and personal injury.

Due to their expertise and services, big law firms have become an increasingly attractive option for legal advice and representation. As a result, the demand for their services is expected to increase in the coming years. Furthermore, big law firms are likely to benefit from advances in technology, such as cloud computing, which will enable them to provide more efficient and reliable services. As such, big law firms are well-positioned to remain competitive in the legal services industry and to provide clients with the highest quality legal representation.

QUESTIONS ANSWERED IN THIS ARTICLE

 

The Big Law Boom Carries On

The big law firms of the United States have stayed busy through 2020 and into 2021, with a scarce number of deals and new business opportunities coming their way. The purpose of these firms is to provide legal counsel and representation to large corporations and organizations. This year has been the busiest for these firms in the last decade.
 

High-Profile Representations

This year, big law firms have taken on many high-profile representations, such as those concerning antitrust law, tax law, mergers and acquisitions, and corporate restructuring. Major companies such as Apple, Microsoft, and Amazon have all kept the law firms employed, helping them to maintain their strong position in the industry.
 

Tightening of Legal Reimbursements

Over the past decade, big law firms have noted an increase in the tightening of legal reimbursements, as clients look to keep costs down. However, despite these pressures, the big law firms have not sacrificed quality of service. In fact, the firms continue to work hard to deliver top-notch legal advice and representation, including to the most high-profile clients.
 

Increasing Pressure in the Legal Market

The legal market continues to be competitive and increasingly competitive. This means big law firms are under increasing pressure to maintain their competitive edge amid tight budgets and legal demands. Additionally, they have to ensure that their lawyers are up to date on the most recent legal developments and that their client base remains satisfied with the services they are provided with.
 

Long-Term Gains for Big Law Firms

Despite the competitive pressures and the increasing complexity of legal cases, the big law firms have seen long-term gains due to their focus on quality service and the ability to provide clients with legal advice that is tailored to their specific needs. With the rise of technology, these firms are also becoming even more efficient and cost-effective, resulting in the continued success of these firms.

Boutique firms and solo practices have their place, but sometimes bigger is better. Take these eight law firms, for example — already robust, venerable practices that lately have found themselves adding lawyers, increasing profits, leasing more office space, and expanding into new practice areas. Anyone care to argue that these are bad ideas? That they don't make a firm better? And what's intriguing — astonishing, in fact — about the growth of these firms is that they've managed to pull it off in an economic climate that's a tad, shall we say, unimpressive. This list isn't based on a scientific formula, and it's not meant to be all-inclusive. Instead, let this selected roster stand as evidence that any lawyer seeking a firm that's thriving for all the right reasons has plenty of options at the moment. You just have to know where to look. Start here.

DICKSTEIN SHAPIRO MORIN & OSHINSKY, Washington, D.C.

THE STATS
Total Offices 2
Fastest Growing Office Washington
Total Lawyers 2003 314
Total Lawyers 1998 239
Fall 2003 Incoming Associates 16
Web Site DSMO.COM

Just two years ago, Dickstein Shapiro was humming along nicely — two offices, 283 lawyers, and per-partner profits of $651,000. Real good — but not good enough, as it turns out. By 2002 the firm had squeezed 298 lawyers into those two offices, and per-partner profits had jumped to $1.1 million. That's an increase in profits of — we'll do the math for you — more than 70 percent.

How did the firm achieve such a don't-bump-your-head, pants-are-too-small, you-should-try-out-for-the-basketball-team growth spurt? "Managed risk," says managing partner Angelo Arcadipane, by way of explaining the firm's white-knuckle decision to forego hourly rates on two major litigations in favor of contingency fees. "We're building a brand in representing individual corporate clients in cases stemming from major class actions, where the corporations don't want to participate in the class but want suits brought on their behalf."

The risk paid off. Profits surged and gross revenues were the highest in Dickstein Shapiro's 50-year history, landing it among the country's top-grossing firms for the first time. But the overnight success didn't happen overnight. "Firms don't make more money just because they happen to make more money," says Newport Beach, California-based legal consultant Peter Zeughauser. "They make more money because they hire the best lawyers, who attract the best work and the best clients. Those things feed off one another."

Dickstein Shapiro's method is simple: "Be focused. Don't be faddish," says Arcadipane. "It's not a rocket science strategy." For Dickstein the focus falls on five core practice areas — energy, intellectual property, general litigation, corporate and finance, and regulatory affairs — and, increasingly, on a growing complex dispute resolution practice. Meanwhile, it seems the two offices are getting a little cramped. The firm recently signed a lease for some breathing room — 417,000 square feet of it — in Washington, D.C., which will be ready in spring 2006.

DUANE MORRIS, Philadelphia

THE STATS
Total Offices 22
Fastest Growing Office New York
Total Lawyers 2003 536
Total Lawyers 1998 279
Fall 2003 Incoming Associates 12
Web Site DUANEMORRIS.COM

When consolidation fever spread through the law firm community five years ago, Duane Morris chairman Sheldon Bonovitz and his partners had only one thought: road trip! They stocked up on Cheetos, piled into the car, and set out on a cross-country odyssey, snapping up office space and adding lawyers over the next four years in Boston; New York City; Princeton, New Jersey; Wilmington, Delaware; Washington, D.C.; Bangor, Maine; Pittsburgh; Atlanta; Miami; Chicago; Houston; San Francisco; and San Diego. They even hopped a flight to London. Increased presence in major markets, they figured, would mean increased competitiveness and profitability. "We've added groups of lawyers — anywhere from one to 12 — and developed from a regional firm into one that has a national footprint," Bonovitz says. (We made up the part about the Cheetos, by the way.)

Back at the Philly HQ, the firm's lawyer population has held steady, but the number of lawyers in other offices has more than doubled in the past five years, to 336. Like the geographic expansion, the firm's personnel and practice-area growth has been spread pretty evenly. "As we've grown, we've integrated into practice groups and added both lateral associates and younger associates in our various markets," Bonovitz says. In fact, 2002 saw the firm add 35 lateral partners.

Of Duane Morris's 14 practice groups, intellectual property and bankruptcy are among the fastest growing, a trend seen at other firms across the country. Bonovitz claims the expanding "platform" has attracted more national clients and additional work from existing clients. The plan now is to fill out the offices — and, while they're at it, to keep adding new ones. (For those of you following along at home, that probably means one thing: hiring.) "Right now we have nearly 350 lawyers in those other markets," says Bonovitz. "In the next five years we're going to add another 500. The firm will be at 1,000 lawyers by then." Gas up the car.

GREENBERG TRAURIG, Miami

THE STATS
Total Offices 20
Fastest Growing Office No Comment
Total Lawyers 2003 975
Total Lawyers 1998 360
Fall 2003 Incoming Associates 20
Web Site GTLAW.COM

Five years ago, Greenberg Traurig, which had specialized in real estate, corporate, tax, and international law, acquired one of the most prominent entertainment firms in the country, Katz, Smith & Cohen. Its leader was Atlanta-based partner Joel Katz, who had represented B. B. King, Willie Nelson, George Strait, and Jimmy Buffett, among others. It was, as they say in the business, a big deal. Virtually overnight, GT became a national force in entertainment law.

People noticed, to say the least — people like entertainment superlawyer Jay Cooper, a 25-year veteran of showbiz law in Los Angeles who counts Jerry Seinfeld and Sheryl Crow among his clients. A year later, Greenberg snapped up several established entertainment lawyers in New York City. Again, Cooper took note. A few months after that, a Greenberg partner contacted Cooper through a mutual friend in an effort to lure him to the firm. The conversation was not long.

"Here's this big firm, and you look at it and wonder, 'Why would an entertainment lawyer go with a big firm?' But I knew Joel Katz, so I had to look and see what it was all about," Cooper says. "I looked at what they'd been doing and who had joined, and realized this firm was serious about being a real player in the entertainment business. They're a force. So when they talk to you, they're not just another eastern firm that says, 'I want to be in show business.' They're already in. And you take them seriously."

The consolidation tactic has worked for Greenberg Traurig in other practice areas, too. "It became clear to us 15 years ago that there was a consolidation that was taking place in the legal marketplace, and it was worldwide," says firm president and CEO Cesar Alvarez. The firm seized on the trend, and what was once a three-lawyer Miami firm grew and grew and grew. The number of lawyers shot from 360 in 1998 to 750 in 2000, and today the firm is knocking on one-thousand's door.

GT's strength is that while they've come very far very fast, they have strived to keep the quality of their service from declining. Clients' demands are greater than ever these days, but most lawyers have less time on their hands. Information technology has raised expectations: When a client's on the phone, he wants his answer then and there. "Since you don't have the luxury of really spending a lot of time researching, you need to be pre-researched, to know the area well enough to respond immediately based on the knowledge you have," Alvarez says. What that means, in a practical sense, is having many lawyers with different areas of expertise everywhere. "To the extent that you can service a client even more by enabling its general counsel to access 10 or 15 areas of your firm, the client's ability to get great service improves overall, because the number of firms they have to work with is minimized."

Essentially, what Greenberg set out to do a decade and a half ago was to repackage itself as a major player in the national and international legal market. Sure, the firm's still strong in Miami (its 36-year history there has contributed to the general growth of that area). But, as Alvarez says, "To be a national or international player, you need to get to the size and specialization where you'll be viewed that way."

It appears that the firm is indeed being viewed as a national player — in the last few years, to cite just one example, 255 alleged victims of abuse by clergy have enlisted GT's services in lawsuits against the Boston Archdiocese.

HAYNES AND BOONE, Dallas

THE STATS
Total Offices 9
Fastest Growing Office Houston
Total Lawyers 2003 420
Total Lawyers 1998 300
Fall 2003 Incoming Associates 51
Web Site HAYNESBOONE.COM

Lately, while many firms have gone hog-wild with merging, Haynes and Boone has taken a shockingly counterintuitive path to growth: meeting its clients where they are. Revolutionary, eh? Here's an example of its ingenuity: "When NAFTA came along [in 1994], we had a number of clients express a need for a Mexico practice," says managing partner Robert Wilson. The firm's Mexico City office opened in 1995. "Where our clients lead us is where we will go." Brilliant!

In addition to Mexico, those clients — who include Bank of America, ExxonMobil, and Dell — have led H&B clear across Texas and all the way up to Washington, D.C. Even so, a regional firm with a significant national and international practice is still a regional firm. "If we're honest with ourselves, we can't say we're national, but we're a wanna-be," Wilson says. That aspiration has kept the fire burning under the firm as it makes the transition to the national stage. "We base our growth on the cold, hard stats," says Wilson. Probably not a bad idea for a firm that can boast the following cold, hard stats: From 2001 to 2002, gross revenues increased 8 percent to more than $180 million. Profits per partner are at $545,000. And the number of lawyers has risen almost 10 percent from one year ago, to 420. Especially impressive, considering that H&B was launched by just a handful of attorneys a mere 33 years ago — not so long in the life of a firm.

Haynes and Boone's next moves will likely be to New York City and then California, according to Wilson. Why? Because that's where the clients are. "We have clients who have needs in New York City," he says. "They can hire a New York law firm, but if we know their business and we know how they think, there's no reason we shouldn't be there."

HELLER EHRMAN WHITE & MCAULIFFE, San Francisco

THE STATS
Total Offices 12
Fastest Growing Office San Diego
Total Lawyers 2003 651
Total Lawyers 1998 405
Fall 2003 Incoming Associates 36
Web Site HEWM.COM

California seems like a great place not to be a lawyer these days. The spectacular nosedive that the state's economy took when the tech scene collapsed didn't leave law firms with many deals to do. From 2001 to early 2003, the casualties were staggering. Cooley Godward: 100-plus layoffs. Wilson Sonsini: 100-plus layoffs and a $55,000 decline in profits per partner. Brobeck: some 500 lawyers left jobless. Oh, and lastly, the layoffs at Heller Ehrman in the past two years: zero.

Yep, a big fat goose egg. Not only that, but its revenues, profits, and lawyers' ranks have actually grown. How has Heller pulled it off? By not putting all of its eggs — goose or otherwise — in one basket. Namely, the basket labeled "technology."

"We don't grow for growth's sake," says the firm's head of litigation, Matthew Larrabee. "What we ask is, 'What size do we need to be to meet client demand?' This avoids problems with just adding numbers." Unlike so many Bay Area and Silicon Valley law firms, Heller Ehrman never abandoned everything it knew in favor of an unnaturally tech-based practice. Though a significant percentage of its business today comes from technology clients, many of those are serviced by the venerable life sciences and biotech practice, a Heller Ehrman practice area that dates back nearly 30 years.

It was just at the moment when other West Coast law firms were betting their fortunes on technology practices, in late 1997, that Heller's management took a long, hard look at its capabilities and recognized they were more national. "We set about focusing our growth on particular practice areas — like emerging companies, IP litigation, big-case litigation, and securities — and we set about exporting our capabilities to the East Coast," Larrabee says. "We wanted to take our West Coast market position and show our clients that it was national." The Washington, D.C., office, which opened in 1995 with one lawyer, now has 50; an office sprouted in New York City in 1999; the San Diego office, which opened its doors in 1998, has grown 41 percent just in the last seven months and now employs 72 lawyers. And the Hong Kong office, a 28-lawyer outpost known for its IPO and real estate practices, more than doubled in size in the same period.

Don't be fooled by all that success elsewhere, though. Things are fine in Silicon Valley at the moment. Just ask Heller Ehrman.

LATHAM & WATKINS, Los Angeles

THE STATS
Total Offices 21
Fastest Growing Office No Comment
Total Lawyers 2003 1,536
Total Lawyers 1998 820
Fall 2003 Incoming Associates 112
Web Site LW.COM

A decade ago, Latham & Watkins would not have appeared on this list. In fact, they wouldn't even have been allowed to look at it. After soaring through the late 1980s, the firm was skidding. Several huge clients had fallen on hard times. The corporate practice had nearly bottomed out. There were layoffs, followed by major (and not particularly desirable) changes to the compensation structure for everyone, partners included.

Since that nadir, Latham has staged one hell of a comeback. In the past 10 years the firm has tripled its ranks to more than 1,500 lawyers. And it is now a major force on the global legal stage, making its way across Europe and Asia with a fierce determination. Nearly 300 of the firm's lawyers are based in one of its seven European offices, and another 33 work in Asia, where Latham has outposts in Singapore, Hong Kong, and Tokyo.

And the firm is making boatloads of money: Profits per partner in 2002 reached $1.14 million. In the most recent Vault ranking of the country's top 100 law firms, Latham was the only non-East Coast firm among the 10 most prestigious firms. Consultant Peter Zeughauser sees the growth continuing unabated. "It'll go to 2,000 [lawyers] easy — very easy — in the next five years," he says. "And that size doesn't hurt the quality of the work [they do] or Latham's reputation. The reputation the firm has is that it's getting an increasingly large share of the most interesting work — the best, most challenging work. If you really want to get into the major deals, it's firms of this scale and quality that are getting more and more of the premium work."

MCDERMOTT, WILL & EMERY, Chicago

THE STATS
Total Offices 12
Fastest Growing Office London
Total Lawyers 2003 933
Total Lawyers 1998 800
Fall 2003 Incoming Associates 31
Web Site MWE.COM

Back in January 2002, McDermott, Will & Emery participated in a growing trend when it opened a small office in Europe. Munich, to be precise. The office had only five lawyers — just enough to maintain a presence. But for a firm like McDermott, which is accustomed to being the resident juggernaut no matter what continent it's on — the firm's gross revenue in 2002 increased 12 percent to $628 million, landing it among the top 10 highest grossing firms in the United States — a mere presence doesn't cut it. In the 20 months since being established, the Munich office has quadrupled in size.

The push into European markets by U.S. firms has intensified in the last five years, thanks to EU competition and antitrust regulations, trade issues, European biotech and pharmaceutical clients, and corporate work on cross-border and cross-Atlantic deals. "The focus in Europe [for us] has been to build the same full-service capability as [we have in the United States]," says partner Doron Ezickson. McDermott lawyers in London, Munich, and Dusseldorf handle corporate matters, cross-border financings, tax issues, labor and benefits, and intellectual property cases. The European work accounts for an ever-increasing percentage of the firm's annual revenue, and McDermott expects to grow its European presence this year with at least one more office (the exact location of which remains top secret).

The build-out in Europe has been the most visible and most concentrated area of growth for McDermott lately, but new offices Stateside have contributed good old American dollars to the firm's coffers. The firm opened a three-lawyer office in San Diego this year, for example, which is busy with intellectual property work in the still-hot biotech sector (McDermott has expertise in health law, private liability, and FDA regulation). The three-lawyer office was added as part of the firm's growing life sciences practice, one that Ezickson places squarely in the "expanding" category for the coming year. The IP lawyers have been in a frenzy handling the development of intellectual property for companies and institutions and protecting the rights to that property. The firm issued 371 trademark registrations in 2002, an increase of 44 percent over the previous year.

STINSON MORRISON HECKER, Kansas City, Missouri

THE STATS
Total Offices 8
Fastest Growing Office St. Louis
Total Lawyers 2003 340
Total Lawyers 1998 274 (Combined)
Fall 2003 Incoming Associates14
Web Site STINSON.COM

New Yorkers and Californians like to kid about the middle of the country, calling it Flyover Land — what you fly over en route from one coast to the other. But spend a little time in market-addled Manhattan these days, or in tech-ravaged California, and the in-between states start to look pretty good — stable, steady, solid. "Here in the Midwest, we don't hit the high peaks of Silicon Valley, but we don't have the troughs either," says Brian Gardner, co-managing partner of Stinson Morrison Hecker, the Kansas City-based result of a recent merger between Morrison & Hecker and Stinson, Mag & Fizzell.

The Midwest has of late been kind to the law firms that call it home. Stinson Morrison — 340 strong after drawing lawyers in roughly equal numbers from both firms — is sitting particularly pretty, with offices in Wichita, Kansas; St. Louis; Kansas City; Overland Park, Kansas; Jefferson City, Missouri; and Omaha, Nebraska. Many a merger has been carried out with much fuzzy talk about synergy but little forethought about actually working together. Not so Stinson. "I think the cultures were nearly identical, if not completely so," says Gardner. "There was the same quality of work and approach to client service. What we both needed was to convey to larger companies that we had more depth in all the areas that we practiced in." Those include corporate finance, the business transactional group, a large employment practice, a strong general commercial litigation practice, a growing environmental group, and a hefty bankruptcy practice.

The firm plans to maintain its status as a merger to admire by confining future growth mainly to the cities where it already has offices. "That doesn't rule out the possibility of expanding into a different market," says Gardner. "I would say we're a Midwestern firm with a national reach. We'll continue to grow, but we'll be measured in that growth. There's a lot of room for growth right in our own markets, with existing clients." Stable. Steady. Solid.