Atlanta. (Photo: John Disney/ALM)

With growing employment opportunities for both lawyers and legal support professionals, Atlanta and Austin stand out from the crowd.

The two cities both saw double-digit growth for lawyer employment since 2015 while adding more legal service jobs over that same period than any other American city, according to a newly released study from real estate services firm CBRE.

Atlanta was home to 16.3 percent more lawyers in 2017 than two years earlier, labor market data compiled by CBRE showed. That growth was over four percentage points more than the runner-up, Los Angeles, where lawyer head count grew at 11.9 percent. Other cities with double-digit growth included Kansas City, Austin and San Francisco. The national average was 3 percent.

Looking at the wider category of legal services, Austin added jobs at an 11.1 percent clip, while Atlanta was second at 8.3 percent. Phoenix, Detroit and Dallas/Fort Worth rounded out the top five, all growing between 4 percent and 5 percent. The national average was 1.5 percent.

Austin is a really interesting story, from a lot of perspectives. If you look at why law firms are growing where they are, it’s clear that they’re following business services in general,” said Julie Whelan, head of occupier research for the Americas at CBRE. 

Whelan said the city was emblematic of the tech boom that’s been fueling growth across markets in the South and the West, but notably less so in the Northeast.

“Austin is such a hot spot for legal services growth because it’s also a hot spot for ‘office-using employment’ growth,” she said, using the industry term for jobs in the professional and business spheres, including startups. 

In an era when even growing law firms are shrinking their space, Austin was also one of only three markets with positive net absorption—more square feet becoming occupied than vacated—by law firms over the last 12 months.

Austin’s burgeoning millennial population is also part of the story, particularly in a legal marketplace where competition for the top layer of young talent is escalating. The city has the highest concentration of millennials in the nation, at 28.2 percent of the population, a figure that has grown 12.2 percent since 2012.

Thus far in 2018, Reed Smith and Shearman & Sterling have placed bets on the city.

“We see that Austin will continue to be a hot millennial market, even growing faster in the future,” Whelan said. 

The CBRE report also flags Austin as a top locale for establishing a law firm “center of excellence”: the company’s term for shared-service hubs consolidating information technology, finance, human resources and marketing professionals, alongside staff attorneys.

After sparking a flurry of headlines a few years back, announcements of law firms opening such hubs have been scarcer in recent years. Whelan said the extended economic expansion has encouraged firms to maximize revenues rather than taking big bets to lower costs by becoming leaner. Instead, she suggested, they’ve been simply looking to contract space while growing business in low-cost areas.

That could change closer to 2020, the year in which a growing number of economists are predicting an economic slowdown, or even a recession.

“Law firms will have to look for operational efficiencies,” she said. “We figured it was time to plant the seed for this discussion.”

According to CBRE, Atlanta also makes sense as a site for these shared-service hubs, even though as an “established market,” it falls into a different classification than growing Austin. As a top-10 market in terms of total numbers of lawyers and legal service professionals, there’s a skilled local population, while costs are lower than New York, Washington, D.C., Los Angeles and San Francisco.

Am Law 100 firm Squire Patton Boggs, Am Law 200 firm Adams and Reese and Denver-based litigation boutique Wheeler Trigg are among the firms that have set up traditional offices in Atlanta since 2017.

The study estimates the yearly cost of hiring a mix of 100 legal professionals at $6.77 million in Atlanta and $6.70 million in Austin, both below the national average of $6.82 million and the New York City rate of $7.95 million.

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