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Fastest Law Firm Growth Was Fueled by Energy Markets
The National Law Journal
Oil-rich cities topped the list of areas in which the nation’s 350 largest law firms added the most lawyers during 2012. Denver, Houston and Dallas showed the biggest gains, with Pittsburgh’s Marcellus shale work fueling growth there.
Of the top 25 U.S. markets that The National Law Journal tracked for our survey of the nation’s largest law firms by headcount during 2012, 15 cities saw gains—mostly modest—while nine lost lawyers. One region, Orange County, Calif., remained unchanged.
The findings are from our NLJ 350 Regional Report. Overall, firms on the list grew by 1.1 percent last year.
The greatest change was Denver’s 7.5 percent head count increase. A big reason for that growth was Bryan Cave’s 2012 merger with Denver’s Holme Roberts & Owen, an energy-focused firm with about 150 lawyers.
“Energy is hot,” said Kent Zimmermann, a consultant with Zeughauser Group. “As energy companies grow, they more frequently release value in transactions and settling disputes over assets. As a result, their demand for legal services goes up.”
Kansas City, Mo., saw the biggest decrease in headcount—a loss of 4 percent. Shook Hardy & Bacon, the largest NLJ 350 firm in Kansas City, declined by 7.2 percent overall and by 8.3 percent in Kansas City.
Asked for an explanation, Shook Hardy chairman John Murphy said the firm had "transitioned away from working for longtime client Lorillard Tobacco Co.," although it continues to represent Philip Morris USA/Altria. Lorillard and Philip Morris, he said, decided it was best to retain separate counsel.
Kansas City’s economy has been heavily weighted in manufacturing and telecommunications and was “tripped up” by a slowdown in those sectors, according to Moody’s Analytics, which reported that the city is at risk of recession.
Chicago headcount declined by 2 percent. The decrease likely was on purpose, according to Zimmermann. “Many firms in other parts of the country are shrinking headcount to grow financially stronger,” he said. “Chicago's headcount drop may be related to this trend.”
Because the NLJ this year for the first time gathered regional data for the 350 largest law firms (it previously did so only for 250 firms), regional comparisons are based on year-over-year data for the nation’s 250 largest firms).
Here’s a look at how the U.S. cities in the Regional Report fared: