Large national law firms settling in Boston could edge out local players, several of which have operated as single office firms or regional setups for decades.
Big Law firms, including Simpson Thacher & Bartlett, Paul Hastings and Blank Rome announced new Boston offices this year. Covington & Burling, Arnold & Porter and Akin Gump Strauss Hauer & Feld are among firms that opened outposts in the city last year.
“A lot of these firms are chasing industries that are hot,” said Jennifer Moss, a managing director in search firm Major, Lindsey & Africa’s Boston partner practice group. In Boston, that includes life sciences, health care, investment management and energy, including clean tech and tech, she said.
Goodwin Procter in April poached a five-partner technology and life sciences team from Cooley in Boston. “There’s going to be a consolidation in legal services around these verticals,” Pat Mitchell, one of the partners who moved over to Goodwin and had cofounded Cooley’s Boston office in 2007, said at the time.
Health and energy have both been bright spots in a slow deals market, outperforming other industries. That’s in part due to generous cash on the balance sheets of health care giants such as CVS, Pfizer and others, and favorable commodity prices and tax incentives from the Inflation Reduction Act that bolster the energy industry’s spending on clean technology.
“Boston is in a bit of a bubble compared to a lot of other markets around the country and we haven’t been as impacted by some of the economic conditions that impact other markets,” Moss said.
Law firm openings in Boston have grown exponentially in the last decade. More than 40 firms have opened shop in the city since 2016, including four in the past month, according to a list compiled by MLA. The wide swath includes regulatory-focused Covington and UK-founded Magic Circle firms like Allen & Overy, now A&O Shearman, which launched a Boston office in 2022.
Consolidating Legal Spend
Regional firms risk losing lawyers to new entrants as larger players flock to Boston.
“You may have other firms that could lose groups to Big Law, full service firms, and that’s just been a trend across the country,” said Divya Bala, founder of boutique legal recruitment firm Avance Partner Search. “I don’t think that Boston is immune to that trend.”
It is harder for single office firms, or smaller regional firms to compete for clients and talent in a market where firms with higher profitability and wider offerings have entered, said MLA’s Moss.
“Clients are trying to consolidate their legal spend into a smaller number of firms, which then means they need to be on a platform that offers everything their clients need,” said Moss.
Boston-founded Burns & Levinson, which lost 17 people to ArentFox Schiff this week, is contemplating a future merger with another firm or fortifying itself with hires. “We are exploring several growth options,” the firm said Tuesday.
Burns & Levinson also saw a 25-lawyer corporate and finance team decamp to Blank Rome, which launched its Boston office last month headed up by dealmakers Frank A. Segall and Josef B. Volman.
Still Nascent
Efforts by the newest Big Law entrants in one the nation’s oldest cities are still nascent.
“Many of the national players have planted the flag, but it feels a bit tentative,” Jason Winmill, managing partner at legal consulting firm Argopoint.
Simpson Thacher is the largest and most profitable of the new entrants this year. The Manhattan-founded firm’s Boston outpost currently consists of partner Kenneth E. Burdon, who will be joined by Nathan Somogie from New York. Both are registered funds partners.
“While we will have a small core team of lawyers as an initial matter, we are excited about the tremendous opportunities in the Boston market and its exceptional talent base,” said Alden Millard, chair of Simpson Thacher’s executive committee in a statement last month. “As we have with other offices we’ve opened, we anticipate growing our on-the-ground team in a deliberate and meaningful manner.“