When New Jersey-born Parker Ibrahim & Berg opened in Orange County, California, a few years ago, firm leaders opted to lease roughly twice the office space needed.
The Somerset-based firm has since used up that 20,000 square feet, and added 6,000 square feet more.
It might look like a gamble that worked out, but according to managing partner Sanjay Ibrahim, it was a very measured move: the transaction costs of leasing extra space right away, rather than waiting until additional hires necessitated more space, made financial sense, he said.
With geographic expansion, “I don’t necessarily think you have to swing for the fences every time,” Ibrahim said. “Expansion is not something you decide overnight. It’s got to be part of a macro-level plan.”
Indeed, other New Jersey firms have taken a similarly measured approach.
Lowenstein Sandler in 2008 opened in Palo Alto, California, and in 2016 expanded to Utah, in each case looking to leverage legal work generated in technology centers.
More recent examples came from McElroy, Deutsch, Mulvaney & Carpenter, which earlier this year hired Locke Lord partner Paul Dwyer Jr. to open a Providence, Rhode Island, office, and in June 2017 opened a Tampa office with the addition of litigation attorney James Myers of McRae & Metcalf.
Standing out for its international approach is Lerner David Littenberg Krumholz & Mentlik, a Westfield-based intellectual property boutique that in the past decade has boosted its supply of frequent flyer miles by opening outposts in Asia.
“There was a conscious decision made that … our size was not going to be a detriment to us,” Lerner David co-managing partner William Mentlik said. “We believed that it might actually be to our advantage.”
“We decided as a small firm we were going to go right to where the action is and develop a name for ourselves,” he added. “China doesn’t think of us as a small firm.”
Big, small or in-between, there appears to be good reason to exercise caution in branching out. Recent data analysis detailed on law.com, for example, concluded that “the payoff from being a truly national or international law firm just may not be what it used to be.”
“In short, the firms who grew from regional to national or international are bigger but not necessarily better,” wrote Marcie Borgal Shunk of The Tilt Institute, a law firm consultancy. “Being national or international is an attractive position with somewhat mixed results. The appeal is not ubiquitous.”
For New Jersey-based firms, recent efforts at expansion—particularly beyond the traditional “Amtrak strategy” of opening offices in the Boston-Washington, D.C., corridor—have been relatively few.
Two main motivators for geographic expansion appear to be: demand by existing clients for a physical presence in an important market or jurisdiction, or firm leadership zeroing in on a market as one suited for strategic growth. A third factor is the desire by law firms to keep referrals in-house. Of course, the three aren’t mutually exclusive, and one can lead to another.
For Hackensack-based Cole Schotz, all three factors have played a part in the firm’s geographic expansion, which has elements of the Amtrak strategy but also includes the additions in recent years of a Florida shop and two offices in Texas.
Administrative partner Glenn Kazlow, like Ibrahim, reached for a baseball analogy.
“It’s either ‘Field of Dreams’—build it and hope people come—or go to an established infrastructure,” Kazlow said. “Our philosophy has always been, we’ll start with the people and figure out the logistics.”
Kazlow pins the expansion period as beginning in 2006, when the firm decided to beef up its New York-based bankruptcy practice, acquiring 10 lawyers from Angel & Frankel and opening a midtown Manhattan office. It was the bankruptcy practice that again prompted the firm to expand into Wilmington, Delaware, and Baltimore, when it took on a group of debtor-side lawyers from Saul Ewing. (At the time, Saul Ewing was trending toward representing lenders, while Cole Schotz was trending toward a debtor-side practice, according to Kazlow.)
Things got geographically more interesting when the Saul Ewing contingent recommended hiring another bankruptcy practitioner: Texas-based Michael Warner, who joined Cole Schotz and brought two lawyers—and a Fort Worth office—with him. Then, Warner, asked where he referred litigation matters, pointed to James “Big Jim” Walker, a Dallas-based attorney then with Walker Sewell. Walker joined Cole Schotz in 2013, and the firm, rather than have him commute to Fort Worth, picked up its Dallas office, albeit a small one, with just two lawyers.
Cole Schotz’s entire Texas presence, in fact, is just four lawyers.
Then two years ago came the firm’s expansion into Florida, with the opening of a Boca Raton office with an estate planning and probate duo from Sachs Sax Caplan. That office has recently grown to seven lawyers, including real estate and tax lawyers, as well as litigators.
It was a strategic, and deliberate, move. The firm had many clients with property or second homes in the state, and an eight-year search was conducted prior to the opening, according to Kazlow.
“I could see that office grow to 10 or 15 attorneys in short order,” Kazlow said.
The out-of-state offices are principally supported by staff in Cole Schotz’s Hackensack headquarters. Firm leaders try to foster unification, including by equipping all lawyers with video phones—not video conferencing, but desk phones with video function for everyday calls, Kazlow said.
“Anytime you start to have multiple offices, you’re concerned about how that affects the culture of the firm,” so it’s important to make everyone feel included, Kazlow said. “If it means flying secretaries in when we do a group Mets or Yankees game, we’ll do that.”
“It’s easy not to do those things and go have lunch with your buddies,” he added. “Be willing to put in the time and effort and investment to make it work, because if you don’t do those things, it’s going to fail.”
Lerner David, a Westfield-based intellectual property firm of about 60 lawyers, has a pair of Asia offices that Mentlik says came about in different ways.
The Guangzhou, China, office, opened in 2010, came about as firm leaders saw technology companies based there seeking to protect their IP in the United States, according to Mentlik, who said the firm does not practice in China or advise on Chinese law, but rather engages Chinese clients in connection with U.S.-based legal work. The office there has one full-time attorney but is “not a law office per se,” he noted.
“It’s very important to have the face time with the Chinese companies,” Mentlik said. “There’s a lot of competition with other U.S. firms.”
China-based business, Mentlik acknowledged, has “developed more slowly than we thought it would,” but “we have turned that corner,” and are representing Chinese companies in stateside litigation matters currently, he said.
He noted that the firm has yet to see any direct impact from the Trump administration’s recent stances on international trade.
Lerner David’s ties to Japan are well established—through client Sony, for which the firm has long done procurement, patent prosecution, licensing and litigation work. That relationship in 2014 led to the opening of a Tokyo office, at Sony’s suggestion, according to Mentlik.
“In Japan, as contrasted with China, we have actual registered U.S. patent attorneys on the ground and practicing,” Mentlik said. “What you find is, there are a fair number of U.S. expats living in Japan.”
The firm has since developed some business in Korea, and has a native Korean partner practicing in the United States, though there are no immediate plans to open an office in that country, Mentlik said.
With clients in Far East Asia, the firm has found that a physical presence matters, as executives expect to have personal contact with counsel.
“There’s nothing like face-to-face contact to develop client relations,” Mentlik said.
For Parker Ibrahim, which has expanded quickly since its 2011 launch by three former in-house counsel of JPMorgan Chase, geographic expansion has become a natural part of the growth process. Philadelphia, New York and Chicago offices, and new practice areas, have come since the opening.
In the Costa Mesa, California, office, the firm has gone from nine to 25 lawyers over the past three years. More recently, the firm opened an office in Boston where, because real estate costs are so high, leaders were more conservative with space, leasing 10,000 square feet, Ibrahim said—though another 5,000 square feet were since added.
The risks have been numerous, including and especially the monetary sort, but despite the number of moves, Parker Ibrahim’s leaders remain cautious, he said.
“Over the last two years, I’ve spent an ungodly amount of money” on technology, staff and office renovations, among other expenses, Ibrahim said. But, he added, “we’ve turned down more deals than we’ve accepted.”