Large national law firms based in Boston could overtake local law firms that have operated as solo or regional firms for decades.
Large law firms including Simpson Thacher & Bartlett, Paul Hastings and Blank Rome announced plans to open new offices in Boston this year. Law firms including Covington & Burling, Arnold & Porter and Akin Gump Strauss Hauer & Feld opened branches in Boston last year.
“A lot of these companies are going after hot industries,” said Jennifer Moss, managing director of the Boston Partners practice group at recruiting firm Major, Lindsay & Africa. In Boston, hot sectors include life sciences, healthcare, investment management and energy, including clean tech and high tech, she said.
Goodwin Procter poached five technology and life sciences partners from Cooley in Boston in April. “Law services in these verticals will be consolidated,” Pat Mitchell, one of the partners who moved to Goodwin and co-founded Cooley’s Boston office in 2007, said at the time.
Healthcare and energy have outperformed other industries in a sluggish market, in part because healthcare giants CVS, Pfizer and others have ample cash on their balance sheets, and because favorable commodity prices and tax breaks from the Inflation Control Act are fueling spending on clean technology in the energy industry.
“Boston is in a bit of a bubble compared to a lot of other markets in the country and hasn’t been as affected by the economic conditions that are affecting other markets,” Moss said.
Law firm openings in Boston have grown exponentially over the past decade. More than 40 firms have opened offices in Boston since 2016, including four in the past month, according to a list compiled by MLA. The range includes regulatory-focused Covington LLP and UK-founded Magic Circle firms such as Allen & Overy (now A&O Shearman), which opened a Boston office in 2022.
Consolidation of legal costs
As large firms flock to Boston, local law firms are at risk of losing lawyers to new entrants.
“There may be other law firms that could lose groups to larger law firms or full-service law firms. This is a national trend,” said Divya Bhalla, founder of Avance Partner Search, a boutique law firm recruiting firm. “I don’t think Boston is immune to this trend.”
MLA Moss said a market dominated by companies with higher profit margins and a wider range of services makes it harder for single-office businesses and smaller regional firms to compete for customers and talent.
“Clients are looking to consolidate their legal spend into fewer firms, which means they need to use a platform that gives them everything they need,” Moss said.
Boston-founded Burns & Levinson, which lost 17 employees to Arent Fox Schiff this week, is considering merging with other firms or hiring more in the future. “We are exploring several growth options,” the firm said Tuesday.
Burns & Levinson also moved its 25-lawyer corporate and finance team to Blank Rome, which last month opened a Boston office led by dealmakers Frank A. Segal and Joseph B. Borman.
Still in its early stages
The newest addition to one of the nation’s oldest cities, a major law firm, is just getting started.
“A lot of national players have planted the flag, but there seems to be a bit of hesitation,” said Jason Winmill, managing partner at legal consulting firm ArgoPoint.
Simpson Thacher is the largest and most profitable of this year’s new entrants. Founded in Manhattan, the firm’s Boston office is currently comprised of partner Kenneth E. Burdon, who will be joined by Nathan Somogyi from New York. Both are registered fund partners.
“While we will be starting with a small core team of lawyers, we see great opportunity in the Boston market and are excited about its outstanding talent base,” Alden Millard, chairman of Simpson Thacher’s executive committee, said in a statement last month. “As with other offices we have opened, we plan to expand our local team in a thoughtful and meaningful way.”