Los Angeles-based City National Bank, a unit of Royal Bank of Canada, is looking to step up its lending to the legal industry with two new banker hires from Citi Private Bank’s Law Firm Group, which dominates the field alongside Wells Fargo.
With the addition of Ray Martinez and Erik Larsen, both in LA, City National wants to expand on its reputation as “bank to the stars” with a concerted effort to target firms in the Am Law 200. The bank, known for serving entertainment industry clients ranging from Frank Sinatra to Steven Spielberg to Wolfgang Puck, has been lending to law firms and their attorneys for 30 years.
“ We’re enhancing and increasing the delivery we can make to them and bringing in folks who have been focused on that particular area,” Peyman Salehi, who leads the bank’s Private Banking Law Firm Group, said of the new focus on the Am Law 200.
Larsen has 17 years of experience in lending to the legal industry, while Martinez has 13 years of experience in the area.
Salehi said their presence would help the bank continue its practice of targeting specific industry segments for lending. In addition to entertainment, City National is strong in lending to players in the health care and food and beverage industries.
“Unlike a lot of institutions who have jacks of all trades, we like to have specialists within the industry,” he said. “That allows us to be a good adviser. Flinging product is not our thing.”
The bank made a previous move towards growing its law firm business in 2016 when it hired banker Robin Burton from J.P. Morgan Chase & Co. in Washington, DC.
Salehi said the bank focused on cash balance plans and cash management for firms along with contribution and other loans for partners.
He noted that law firm borrowing had not fully reached the level last seen before the Great Recession, but that a thaw was underway.
“Firms are using more [debt] than they were three to four years ago, but it’s nothing compared to the level prior to 2008-2009,” he said.
Salehi also acknowledged that talent acquisition was growing increasingly challenging for law firms, but he said there was no indication yet that the latest round of salary increases was prompting firms to take on more debt.
He said that law firms were facing greater competition from other entities for law school graduates, and that they would have to look at lifestyle changes in addition to simply compensation. And he posited that the bank’s offerings would also have a role in helping these young attorneys—many facing immense student loan debt—feel financially secure.
City National is also looking to add bankers focused on the legal industry in other markets where it already has a footprint: Washington, D.C., New York and San Francisco.
The bank, founded in 1954, was acquired by the Royal Bank of Canada in 2015.