What Drove BigLaw To Flock To These 3 Regions In 2023

Law360.com, December 20, 2023

By Aebra Coe

Large U.S. law firms took particular interest in two domestic and one international region in 2023, opening up offices for the first time in Florida, California and Saudi Arabia.

BigLaw is already well established in California, but a number of firms saw a chance to open a second, third or even fifth office there this year outside Los Angeles and San Francisco. Alongside this movement, several smaller firms also planted flags in the state.

Meanwhile, in Florida, large and midsize law firms alike have continued to flock primarily to Miami, continuing an influx that began several years ago.

And Saudi Arabia presented an appealing target this year, reducing restrictions on the practice of law by foreign firms, which led to global firms opening up offices and making alliances with local law offices in the kingdom. Here, Law360 Pulse looks back on the factors that drove large law firms to flock to California, Florida and Saudi Arabia in 2023.

California

The expansion of BigLaw in California this year was primarily fueled by law firms already in the state moving into the smaller markets of San Diego and Orange County.

Examples include the expansion of Manatt Phelps & Phillips LLP, which was founded in California, into San Diego with a physical office to support the firm's work in the city. The firm announced in November that it was opening the office with the hiring of outgoing U.S. Attorney Randy S. Grossman as managing partner.

Manatt CEO and Managing Partner Donna Wilson said at the time that the industries fueling San Diego's growth mirror the firm's core practice sectors such as healthcare, and now it has a formal, physical presence in the city to expand its work there.

Another expansion was Reed Smith LLP's decision announced in January to open an Orange County office, the firm's fifth in California, and Greenberg Traurig LLP's January announcement of its sixth California office in San Diego.

In the Greenberg Traurig announcement, CEO Brian Duffy said the firm was attracted to San Diego because both the state and city are "global economic players with platforms on the international stage."

Roberta Kass, a longtime legal recruiter in California at SeltzerFontaine LLC, said the new offices represent a "steady expansion" into secondary markets, following an earlier influx into the state by BigLaw in the 1980s, 1990s and 2000s, mostly in Los Angeles, San Francisco and Silicon Valley.

Meanwhile a number of less large and midsize law firms are moving into California for the first time to cement their statuses as truly national, as opposed to regional, law firms, according to Jenny Swan Meyer, president at Swan Legal Search Inc. in California.

They include Armstrong Teasdale LLP's February entry into California with the hiring of a employment attorney from Lewis Brisbois Bisgaard & Smith LLP in Orange County, and Frost Brown Todd LLC's combination with 23-lawyer AlvaradoSmith, which went live in January and gave the firm three California offices.

"In order for the midsize firms to stay competitive, they often look towards geographic expansions. It's a strategic move to gain strength in numbers," Meyer said. "Establishing roots in California gives firms that West Coast presence and often the ability to develop a national presence."

Kass said there isn't a single factor driving the movement into the state, but the expansion does appear to be primarily client-driven.

"The most common [driver] would be demand by a firm's existing clients who have ongoing legal work in California — telling the firms they will give them California work if they have boots on the ground here," Kass said.

As for secondary market expansion, she said, housing in Los Angeles and San Francisco has been getting more expensive, and since the COVID-19 pandemic hit, a number of attorneys sought to move their families to more affordable locales.

"We've heard anecdotally that some of the new offices and growth in Orange County and San Diego were partly motivated by post-COVID realities and the California housing market," Kass said. "While not cheap housing markets, they are more reasonable than Los Angeles and the San Francisco Bay Area, and are recognized as lovely places to live."

Florida

Law firms opening offices in Florida in 2023 were primarily interested in Miami. The firms that moved in include Cooley LLP, Dinsmore, Vedder Price PC, Mintz Levin Cohn Ferris Glovsky and Popeo PC, and Osborne Clark LLP.

A handful of firms also opened up new offices outside Miami, including Stinson LLP and Porter Wright LLP in Tampa.

With the exception of Cooley, those law firms skew on the smaller side of BigLaw or fall solidly within Mid-Law, as a substantial number of large law firms already have a presence in Miami.

However, the moves this year show there was still more room to grow as the local economy flourished, according to Florida legal recruiter Chris Holtzhauer of Holtz & Bernard LLC. South Florida has been booming with financial and technology companies migrating to the region, Holtzhauer said.

"That creates a heck of a lot of opportunity for big law firms with a presence in South Florida who have the capacity and expertise to service the legal needs of these companies," he said. "That market share is up for grabs, and big law firms who are able to service the complex legal needs of these companies recognize that as a substantial opportunity."

Holtzhauer said he's seeing the latest arrivals in South Florida focusing primarily on financial services, mergers and acquisitions, private equity, capital markets, and complex commercial litigation in Florida and Latin America.

"Miami has long been established as the hub for Latin America, which continues to grow, making Miami a uniquely attractive location for law firms doing business in Latin America," he said.

The COVID-19 pandemic has also been driving movement into Florida, according to Lisa Garcia of Florida-based Garcia Legal Search.

"The pandemic caused law firms to reevaluate their culture, costs and workforce. Living and working in larger cities, especially when much of their population started working remotely, became expensive for businesses," Garcia said.

Ultimately, she said, both law firms and their clients have been drawn Florida's low taxes and diverse workforce, along with the average annual temperature of around 70 degrees.

"All these things combined, created a welcoming environment for new law firms to move into Florida," she said.

Saudi Arabia

Saudi Arabia has increasingly loosened restrictions on outside law firms looking to operate in the kingdom, and in 2023 another piece of the puzzle fell into place with changes to the kingdom's Code of Law Practice to allow foreign legal firms to give consultations on its laws.

A number of firms jumped on the opportunity to serve existing clients in Saudi Arabia and expand their offerings by setting up shop there.

In March, Greenberg Traurig opened an office in the capital, Riyadh, in a joint venture with Khalid al-Thebity Law Firm.

Also in March, Dentons, which has long had offices in the kingdom, obtained its foreign law firm license there.

And at the end of October, Kirkland & Ellis LLP announced that it was opening a Riyadh office, saying that Saudi Arabia's fast-growing economy and its status as an international business hub make it a big draw. Days later Mishcon de Reya LLP said it had applied to open an office in Riyadh, through a joint venture with the Ebrahim Al Habardi Law Office. And in mid-November Gibson Dunn & Crutcher LLP opened in Saudi Arabia as well.

Greenberg Traurig Executive Chairman Richard Rosenbaum told Law360 Pulse the decision to move into Saudi Arabia was a long-term strategy based on economic growth in the region.

Rosenbaum pointed to "giga" real estate projects, "giant projects of unprecedented size and investment," that are underway in the kingdom. The projects include city-like resorts and construction of what will be the world's tallest building in Jeddah.

"In today's world where real estate has been slowing, this is an exception," Rosenbaum said. "If you're a law firm in London, New York or elsewhere and you see that coming, it's clear there is going to be incredible activity for a number of years."

Oliver Clark, director of boutique legal recruitment firm Clark Burnell, said he has been recruiting in the region for more than 15 years and has seen more interest among large law firms recently.

Riyadh is beginning to follow the lead of Dubai, United Arab Emirates, and transform itself into a "world-class metropolis," Clark said.

"It is a truly exciting time for Saudi people. Secondary and tertiary industries are sprouting, while sport, entertainment, recreation, tourism are growing fast," he said. "In recent years we've seen Saudi make international plays above and beyond the usual luxury real estate investments; they are getting their fingers in all sorts of pies, and the sky is the limit."

--Additional reporting by James Mills, Emily Sawicki, Tracey Read, Lynn LaRowe, Madison Arnold, Rose Krebs, Andrea Keckley and Aaron West. Editing by Brian Baresch.


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