Boston (Photo: Dwight Nadig / iStockphoto.com)
A powerful combination of life sciences and technology transactions, venture-capital work and a commercial real estate boom is giving the Massachusetts legal market a big boost.
At the same time, a robust financial-services sector and the huge health care sector’s need for Affordable Care Act guidance are creating opportunities.
“It’s a good moment in the Boston legal market, the Massachusetts legal market,” said Newcomb Stillwell, co-managing partner of Ropes & Gray’s Boston head office.
A 10-year, $1 billion, state-funded life sciences investment initiative is building jobs and companies. Biotechnology and pharmaceutical company deal-making, in particular, has led to a “historical level of activity in many of our transactional practices,” said Mark Bettencourt, a corporate partner at Boston’s Goodwin Procter who specializes in technology companies.
In the first half of 2014, the state’s merger deal value tripled to $16.7 billion, up from $5.3 billion in the first half of 2013, according to the Merger Market Group. Deal count surged by 57 percent during the first half of the year — 99 deals, compared with 63 in the first half of 2013.
More good news: Boston was second only to the San Francisco Bay Area in terms of life sciences venture-­capital dollars, with $212.9 million to biotechnology and $93.1 million to medical-device companies, according to the first-quarter 2014 MoneyTree Report by Price­waterhouseCoopers and the National Venture Capital Association. Add to that Massachusetts’ 5.6 percent unemployment rate for May, compared with that month’s national 6.3 percent rate.
More life sciences and ­pharmaceutical deal-making means more opportunities for patent strategy and litigation, said Susan Murley, a Boston corporate partner and firm co-managing partner at Wilmer Cutler Pickering Hale and Dorr.
“The great thing about technology and life sciences companies is they are extraordinarily focused on intellectual property,” Murley said.
All types of technology companies are expected to drive a 3 percent boost in outside-counsel spending in Massachusetts over the next year to 18 months, said Michael Rynowecer, president of The BTI Consulting Group Inc. in Wellesley, Mass. BTI is a professional-services research and consulting firm. “Those industries all make a lot of medium-sized acquisitions to acquire product lines and technologies,” Rynowecer said.
There’s plenty of other legal action, said consultant Jeff Coburn of Boston-based Coburn Consulting, which specializes in management consulting for law firms. Real estate, financial services, environmental and employment law are just a few of several other hot areas, he said.
“It all adds up to one of the most diverse economies in the country,” Coburn said.
Commercial real estate is especially strong. Net office occupancy increased by 825,000 square feet in the first quarter to a historic 55.1 million square feet, according to a Colliers International report. The city of Boston, for example, is promoting development in the 1,000-acre Innovation District, which was launched in the South Boston waterfront area in 2010.
“It’s got to be one of the best times in recent history for commercial real estate lawyers,” Coburn said.
The overall picture is bright, but some practices are on the downswing. Rynowecer said BTI research indicates a decline in finance work for companies past the startup stage and in environmental law. He sees level demand in labor and employment. In addition, practitioners point to a decline in bankruptcy work. Law firms that support investment companies are still busy with regulations stemming from the 2008 stock market meltdown, said Joel Carpenter, managing partner of Boston’s Sullivan & Worcester.
Work for traditional banks, too, is rising with as real estate swells, he said. “There’s more financing activity going on,” Carpenter said.
Smaller and midsize shops are seeing more business, too, said Marc Crisafulli, managing partner at Boston-based Hinckley, Allen & Snyder. Lower rates are the main reason, he said. “It’s a vibrant, thriving time,” he said.
Population: 6.6 million
Number of NLJ 350 firms with offices in the state: 69
Number of NLJ 350 firms with their largest offices in the state: 16
Number of NLJ 350 lawyers in the state: 4,420
Largest NLJ 350 law office: Ropes & Gray (432 lawyers)
Number of ABA-accredited law schools: 8
Change in number of Boston lawyers (2012-13): 2.2%
State unemployment rate: 5.6%
Number of law schools: 8
Sources: 2014 NLJ 350; American Bar Association; U.S. Census Bureau