Partners Assessing A Secondary Market Move: Finding The Right Firm And Office

Back in December, we suggested that the expansion of Am Law firms into new secondary markets may have been the defining Am Law firm story of 2022, and we explained some of the many reasons why partners at Am Law firms in major cities are moving to secondary markets in unprecedented numbers.

As the 2023 partner lateral market comes into focus, we can report that opportunities at Am Law firms in secondary markets remain plentiful. This is especially true for practices that are less dependent on a strong economy such as litigation, antitrust, privacy, data security, intellectual property, employee benefits, and tax.

Secondary market Am Law opportunities may appeal to partners in two categories. First, they may be a fit for partners interested in moving from outside the state to a secondary market, for the reasons described in our December article. Second, they may be attractive to partners already based in a secondary market who see a chance to “trade up” to an Am Law firm that has recently arrived in their city.

If you find yourself in either of these categories, what are the most important factors to consider as you search for the right firm and office?

Practice alignment with office strategy

The most important criterion to assess is how well your practice aligns with the firm’s strategy for the particular secondary office you’re considering. Note that office-level strategy is not the same thing as firm-level strategy!

Typically, when a firm opens in a new city, it will have identified specific priority practice areas and clients (both existing and potential) for the new office. Two office openings from last month offer clear examples. Goodwin launched in Philadelphia, targeting health care, life sciences, private equity, and financial services work. Meanwhile, Davis Wright opened in Culver City with the aim of expanding its entertainment, media, and healthcare practices.

If your practice area aligns with the new office priorities, that’s an excellent sign. Especially where the firm has publicly announced the practices it intends to build, there will be a sense of urgency internally to back up the talk with demonstrable success. If your practice fits into the plan, you can expect the firm to make a real effort to support you. Conversely, if your practice is not a priority for the office in question, think twice. Even if the firm is willing to bring you in, you cannot expect the same level of support as will be extended to partners in the priority practices.

Cross-selling opportunities

A critical component of strategic fit is the extent to which you can reasonably expect to benefit from cross-selling opportunities, both at the local office level and firm-wide.

Cross-selling can sometimes be driven by proximity to key existing and potential clients: the logic is that by being nearby, partners will be positioned to build strong relationships that lead to servicing an increasing proportion of the client’s legal needs. In interviews about the Culver City opening, Davis Wright partners took care to emphasize their focus on creating cross-selling opportunities on LA’s Westside for lateral partners. Similarly, firms opening in Miami—one of the most popular secondary markets for recent Am Law office expansion—are taking care to site their offices as close to priority clients as possible, in some cases securing space in the same prime Brickell developments that are drawing recently arrived leading hedge funds.

Platform benefits

Although office strategy should be at the forefront, it’s also critical to consider the platform offered by the firm as a whole. How valuable would this firm’s platform be for your practice? K&L Gates’s communications around its office opening in Nashville in 2021 highlighted this factor. In the firm’s press release, partners connected the strong local opportunities in healthcare to the firm’s national healthcare practice and emphasized the value of “a fully integrated law firm with the breadth of practice area capabilities, industry insights and knowledge, and geographic reach that K&L Gates offers.” It’s particularly logical that K&L Gates would play up this factor in Nashville, which historically has not drawn interest from Am Law firms with global reach. But platform is an important consideration regardless of your destination.

Talent pool

Access to talent has been a key driver of recent secondary market expansions. That includes not only newly hired associates and counsels drawn to secondary market offices but also lawyers currently employed by the firm who may stay longer if given the opportunity to transfer. The secondary markets that firms have favored are viewed by many as nice (and cost-effective!) places to live. Consider, for example, Kirkland’s new offices in Boise and Salt Lake City. Another selling point for many secondary market offices is the lack of state income tax. Think Miami, Austin, or Seattle.

Talent has also been a key selling point in attracting lateral partners to these new offices. One reason that partners already working in secondary locations are often eager to join firms in the Am Law is because Am Law firms feature a materially more sophisticated legal talent pool, which newly arrived partners can leverage to accelerate their practices. For Am Law firms arriving in secondary markets, depth of talent is a key advantage—this is a dimension on which the regional firms with a longer history in these markets typically cannot compete.

Lateral partner integration

It’s also essential to inquire about and understand your potential new firm’s lateral partner integration plan. Successfully integrating new partners into the firm’s existing practices is in everyone’s best interests, but even so, we’ve witnessed many cases of poorly managed integration.

For an example of a firm vocalizing its commitment to integrating lateral partners, consider Latham’s opening in Austin in 2021. Latham brought in three lateral partners with deep Austin ties to anchor the new office, two from DLA Piper and one from Wilson Sonsini. In the press release, Latham Chair and Managing Partner Rich Trobman spoke of the firm’s intention “to offer clients in Austin the very best of the Latham platform, by combining our new partners’ experience and skill sets with our already deep and successful bench-spanning capital markets, venture capital, and private equity.” If you’re considering a lateral move of any kind—but especially to a relatively smaller office—you will want to make sure your new firm is similarly committed to integrating you effectively.

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If you are a partner interested in exploring secondary market opportunities, we invite you to get in touch. Although there are ample partner-level opportunities out there, partner needs are hardly ever posted. Drawing on our longstanding relationships with leading Am Law firms, we make it our business to know who is looking. We assist with interview and business plan preparation, and when you reach the offer stage, we can negotiate on your behalf, minimizing awkward interactions with your soon-to-be partners. Remember, we do this for a living. It’s a wise choice to avail yourself of the benefit of our experience.