Washington, D.C. Washington, D.C. Photo: Diego M. Radzinschi/ALM

The jury remains out on how the Washington, D.C., legal market fared in 2018 with some analyses expecting the nation’s capital to lag behind other regions nationwide.

A Citi Private Bank Law Firm Group flash survey of the third quarter sounded the alarm that D.C. showed the lowest level of revenue growth among all of the 11 U.S. regions the survey covered. Citi’s survey did not include national and global firms that participate in D.C. but are based elsewhere, and it excludes some other new entrants. But there is reason to think Citi’s  findings may equally apply to those firms.

D.C. has faced more challenges than other regions because of changes in the level of regulatory and enforcement work coming out of President Donald Trump’s administration, said Lisa Smith, principal of consulting firm Fairfax Associates’ Washington office. Smith said the market is likely “down a little bit” because there has not been as much as enforcement as usual and the Trump administration is not fully staffed.

Smith said firms with a broad practice mix that are not as reliant on regulatory and enforcement work are well positioned for the future. While Smith said she knows firms are “thinking about what a downturn in the economy of legal services” could mean for their business, she said she expected much of the challenges present now to be short-lived and a “function of the current administration.”

But for some firms, the climate in Washington is making them all the more needed.

Tony Pierce, the partner in charge of Akin Gump Strauss Hauer & Feld’s D.C. office, said revenue is up at the firm and 2018 will be a good year. While Pierce said he expects the overall economy to slow down, the “dysfunction” in Washington has been “certainly good for Akin Gump.” He expects the firm to continue benefiting from the chaos wrought by divided government.

“I think that you’re going to see the business community need to be involved in what is happening on the Hill to a greater extent just to protect their interest and shape policy the way they want to see it,” Pierce said, looking ahead to 2019. “I also think you’re going to see an uptick in congressional investigations where I do not subscribe to the belief that Democrats are only going to investigate the administration. I think there will be investigations that relate very much to the business community and its connection to the administration.”

Akin Gump will also join the growing trend of Big Law firms on the move in Washington next year. Akin Gump is moving only a few blocks within its DuPont Circle neighborhood—Pierce said the firm expects to make the move May 4th—but others are relocating to Pennsylvania Avenue or nearer to the Potomac River, at the Wharf. Among the firms relocating to Pennsylvania Avenue are Cleary Gottlieb Steen & Hamilton; Miles & Stockbridge; and Wilmer Cutler Pickering Hale and Dorr. Fish & Richardson already moved to the Wharf in 2018 and Michael Best & Friedrich is following in 2019. Williams & Connolly, meanwhile, has said it is heading to the Wharf, too, and will make the move in 2022.

Smith said she thinks firms’ relocations are primarily responsive to where there are large spaces suitable for law firms and that firms are not trying to send a message by moving away from K Street.