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by
Robert Burke
Virginia Business
December,
2003
The
legal profession has always been a bird dog of sorts
for business trends. Find a region or a particular sector
that is heating up and it’s likely that lawyers
will soon gather nearby. In recent years, that hunt
for new territory has been dominated by the expanding
reach of large firms that seem bent on becoming even
larger. If a firm is not big enough to cover an emerging
or underserved market, or lacks a presence in a major
urban market, a merger or acquisition often follows,
which naturally gives these new, larger firms an advantage
in seizing profitable new turf. In recent years they’ve
been more aggressive than ever.
According
to the consulting firm Hillenbrandt International, the
number of law firm mergers peaked in 2001 with 82. The
figure dropped to 53 last year and so far in 2003 there
have been only 30 mergers, but the effect is being felt.
The big firms can go to major clients and offer a host
of services and locations in major urban markets.
Pittsburgh-based
Reed Smith, for example, has about 100 lawyers in three
offices in Virginia. The firm’s most profitable
location in Virginia is its Leesburg office, where its
land-use attorneys are caught up in a heated legal fight
over growth. Reed Smith attorneys are involved in the
200 or so lawsuits filed against the county over land-use
restrictions put in place by county supervisors, says
James P. Gallatin Jr., managing partner for the firm’s
Virginia locations. After passing the restrictions a
few years ago the county set aside $1 million to defend
the expected legal challenges. They might as well have
waved a red flag at attorneys, says Gallatin.
Reed
Smith’s foothold in Loudoun County came out of
its 1999 acquisition of the 85-lawyer firm of Hazel
& Thomas, which had an established land-use law
practice. In recent years, mergers and acquisitions
have pushed Reed Smith to 1,000 lawyers and expanded
its reach across the U.S. and into new practice areas.
In March it acquired the immigration practice of Richmond-based
firm McCandlish Holton. “I think it’s the
full-service firms like ours that are doing fine,”
Gallatin says.
Richmond-based
McGuireWoods LLP has also recently completed a major
merger and expansion. In October it established a health
care department with 22 lawyers focused solely on that
industry. The move was triggered in part by the July
merger with Chicago-based Ross & Hardies, which
has had its own health law department for more than
20 years. The combined firm has 725 lawyers.
McGuireWoods
Chairman Robert L. Burrus Jr. says firms are increasingly
moving away from selecting new locations based on the
needs of a particular client. “I think the movement
toward consolidation has become much broader than that.
I think firms will open where they feel it would be
good for their practice to be and where there’s
a culturally strategically good fit without first finding
a client that wants them to be there.”
With
an eye toward cutting costs, more companies are choosing
to outsource their legal work, and they’re reducing
the number of law firms they hire, Burrus says. That
is putting an even greater squeeze on mid-sized firms,
says Virginia Bar Association Executive Vice President
Breck Arrington. “I think life is getting tough”
for smaller firms, he says. Those firms can still provide
their knowledge of ever-changing state laws, but sometimes
struggle to offset the effect of consolidation. It’s
similar to Wal-Mart’s impact on small local retailers.
“Maybe it’ll be ‘Law-Mart,’”
he says.
Excellence
in the legal profession, however, can be found at firms
of any size. For the fourth year, Virginia Business
has tried to identify the best lawyers in the commonwealth.
With help from The Virginia Bar Association we polled
more than 5,500 lawyers, asking them to nominate lawyers
in their own firms and outside in 12 categories of law.
On the following pages are short profiles of the 12
top vote getters in each category, along with an alphabetical
list of others cited by colleagues for their outstanding
work.
Return
to Virginia Business - December 2003
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