Sun Never Sets On The Legal Empire As 22 Chicago Law Firms Go Global

Baker & McKenzie stood alone for years as the sole Chicago-based law firm with a vast network of offices worldwide.

 

With 3,031 lawyers in 63 offices, including 54 international offices, Baker still leads the pack; but now it has plenty of company.

 

At least 22 firms in Chicago have at least one office outside the United States, according to the Chicago Lawyer 2002 Survey of the Largest Law Firms in Illinois, which included responses from 102 firms of 20 or more attorneys.

 

"The breadth of our reach is still a lot wider than anyone else, and we tend to staff our offices with people who are native to that region," said David P. Hackett, managing partner of Baker & McKenzie's Chicago office.

 

Of the 22 surveyed firms, 16 had offices in London, the most of any non-U.S. city in the survey and considered by many as the financial capital of Europe. Some nine firms have offices in Brussels because of the city's role with the European Union.

 

"What's really driving the global growth is a maturing marketplace," said James Wilber, a principal with Altman Weil, a legal consulting firm.

 

For Baker, that means expanding where they are, as opposed to breaking new ground.

 

"We have expanded in many different markets, but the major focus of our attention is broadening our presence in the markets where we're already located," Hackett said.

 

The firm does not have "much of a presence in Africa, but I don't see that on the near-term horizon," he added.

 

Mergers and an increasingly international legal marketplace have boosted the number of Chicago firms with international offices.

 

"Presumably, they're responding to what clients are asking for," said Joseph Altonji, a principal with Hildebrandt International, a legal consulting firm.

Among the Chicago firms with global reach is Mayer, Brown, Rowe & Maw, the result of a February merger between Chicago's Mayer, Brown & Platt and London-based Rowe & Maw. The firm has 13 offices in six countries.

 

"We want to be thought of as an international law firm," said Tyrone C. Fahner, Mayer, Brown's chairman. The merger was prompted by "leaving money at the water's edge," and the firm's strategy to have significant offices in the world's major financial centers, Fahner added.

 

But, for many firms, crossing the borders will be a slow process dependent on client needs.

 

And, not every firm expects - or wants - to be a Baker with dozens of offices.

 

"We aren't seeking global domination," said Scott Pickens, managing partner of Schiff, Hardin & Waite, a firm with offices in Dublin, Ireland. "We're trying to grow where we see opportunities that fit. We don't currently plan to be intergallactic. That doesn't fit with our client service."

 

The top 12

 

Following are the surveyed firms with the most non-U.S. offices.

 

1. Baker & McKenzie leads the list of surveyed firms, with 54 international offices:

 

Bangkok; Beijing; Hanoi; Ho Chi Minh City; Hong Kong; Jakarta; Manila; Melbourne; Singapore; Sydney; Taipei; Tokyo; Almaty, Kazakhstan; Amsterdam; Bahrain; Baku, Azerbaijan; Barcelona; Berlin; Brussels; Budapest; Cairo; Dusseldorf; Frankfort; Geneva; Kyiv; London; Madrid; Milan; Moscow; Munich; Paris; Prague; Riyadh; Rome; St. Petersburg; Stockholm; Warsaw; Zurich; Bogota; Brasilia; Buenos Aires; Caracas; Guadalajara; Juarez; Mexico City; Monterrey; Porto Alegre; Rio de Janeiro; Santiago; Sao Paulo; Tijuana; Valencia; Calgary and Toronto.

 

Of the firms responding to the survey, the following firms had the most international offices after Baker & McKenzie (dates provided for opening of specific offices are included here; not all firms provided dates):

 

2. Lovells: 20 non-U.S. offices; 23 firm-wide offices; 1,146 lawyers firm-wide.

 

Non-U.S. offices: London; Alicante, Spain; Amsterdam; Beijing; Berlin; Brussels; Dusseldorf; Frankfort; Hamburg; Ho Chi Minh City; Hong Kong; Milan; Moscow; Munich; Paris; Prague; Rome; Singapore; Tokyo and Warsaw.

 

3. Jones, Day, Reavis & Pogue: 14 non-U.S. offices; 26 firm-wide; 1,649 lawyers.

 

Non-U.S. offices: Brussels, opened in 1989; Frankfort, 1991; Hong Kong, 1986; London, 1986; Madrid, 2000; Milan, 2001; Mumbai, 2000; New Delhi, 1995; Paris, 1986; Shanghai, 1999; Singapore, 2001; Sydney, 1997; Taipei, 1990; and Tokyo, opened in 1989.

 

4. Skadden, Arps, Slate, Meagher & Flom: 12 non-U.S. offices; 23 total; 1,737 lawyers.

 

Non-U.S. offices: Beijing, 1991; Brussels, 1990; Frankfort, 1990; Hong Kong, 1989; London, 1988; Moscow, 1992; Paris, 1990; Singapore, 1996; Sydney, 1989; Tokyo, 1987; Toronto, 1990 and Vienna.

 

5. Latham & Watkins: nine non-U.S.; 20 total; 1,425 lawyers.

 

Non-U.S. offices: Brussels, 2002; Frankfort, 2001; Hamburg, 2001; Hong Kong, 1994; London, 1990; Moscow, 1992; Paris, 2001; Singapore, 1997; and Tokyo, 1995.

 

6. Altheimer & Gray: eight non-U.S. offices; 10 total; 353 lawyers.

 

Non-U.S. offices: Warsaw, 1990; Prague, 1991; Kyiv, 1993; Bratislava, 1994; Istanbul, 1994; Shanghai, 1996; Bucharest, 1997; and London, 1999.

 

7. Holland & Knight: seven non-U.S. offices; 31 total; 1,275 lawyers.

 

Non-U.S. offices: Rio de Janeiro, Sao Paulo, Helsinki, Tokyo, Caracas, Tel Aviv and Mexico City.

 

8. Sidley, Austin, Brown & Wood: six non-U.S. offices; 12 total; 1,416 lawyers.

 

Non-U.S. offices: Beijing, 1994; Hong Kong, 1994; London, 1974; Shanghai, 1999; Singapore 1982 and Tokyo, 1990.

 

9. Mayer, Brown, Rowe & Maw: six non-U.S. offices; 13 total; 1,250 lawyers.

 

Non-U.S. offices: London, 1974; Cologne, Paris, January 2001; Frankfort, April 2001; Brussels; and Manchester.

 

10. McGuireWoods: three non-U.S.; 15 total; 582 lawyers.

 

Non-U.S. offices: Almaty, Kazakhstan, 1993; Brussels, 1990; and Moscow, 1998.

11. McDermott, Will & Emery: two non-U.S.; 10 total; 917 lawyers.

 

Non-U.S. offices: London, 1998; and Munich, 2002.

 

12. Winston & Strawn: two non-U.S.; six total; 821 lawyers.

 

Non-U.S. offices: Paris, 1995; and Geneva, 1993.

 

Some 10 firms each had one international office.

 

Long-time Londoner

 

Lord, Bissell opened its London office in 1979 to service Lloyd's of London, said Daniel I. Schlessinger, managing partner and chair of the firm's executive committee.

 

But, only an administrator staffed the office until two years ago, when Robert B. Robinson moved to London as a resident partner, Schlessinger said. The firm plans to expand its business in the London and continental European market and diversify its offerings beyond insurance matters, he added.

 

Robinson is not a British solicitor and "doesn't practice law in the English courts, but he helps clients with needs there and funnels them" to Lord, Bissell lawyers in the United States, Schlessinger said.

 

He said the firm has had inquiries about litigating in British courts, but that's not in the firm's immediate plans.

 

Beyond Europe, the firm has its eyes on the beach for another office in Bermuda because of the "large concentration of capital in the insurance and financial services industries" there, Schlessinger said.

 

Domestically, the firm has offices in New York, Atlanta, Los Angeles and Rockford. The Atlanta office, opened in 1982, expanded with the lateral acquisition of corporate partners.

 

"We are actively trying to do something along the lines of what we have done in Atlanta," Schlessinger said. "We have had insurance, regulatory and a litigation presence in New York.

 

"We're pleased with the inroads we've made in the merger and acquisitions marketplace; but like a lot of Chicago firms, there's a limit to how much you can do without a strong New York office."

 

The firm has 10 lawyers in its New York office, and "we would be happy with 30 or 40 lawyers, if they were the right people."

 

For the Los Angeles office, opened in 1979, the firm is "right in the middle of a planning effort to determine what we're doing there, Schlessinger said. "We have a very nice IP practice involving the TV industry."

 

Schlessinger said the firm plans to grow through lateral acquisitions.

 

"It's so much easier to do an acquisition than a merger," Schlessinger said. "That's what we're looking at for the time being."

 

Organically speaking

 

"We have a unique approach," said Kevin Evanich, a partner and member of Kirkland & Ellis' 15-member Firm Committee, the top governing body. "We have not grown by merger or acquisitions with other firms.

 

"Every time Kirkland has opened another office, it has been done by Kirkland attorneys. We grow organically, not by merger. The reason for that is we have a very strong and unique culture, and we believe our culture is part of our success."

 

Kirkland has offices in New York, opened in 1990; Washington, opened during the 1930s; Los Angeles, opened in 1989; and London, opened in 1984, Evanich said.

 

"We're very leary about engaging in the type of expansion other firms have," Evanich said.

 

Regarding future growth and new offices, Evanich said the Firm Committee's members' "minds are open. Globally, it's got to be Europe. The market is so large, and they subscribe to Western legal principles."

 

The Firm Committee has "debated at length" the wisdom of growing organically vs. merging with other firms, or hiring large numbers of lateral partners, but the partners think the firm "will do better in the long run by maintaining that Kirkland ethic," Evanich said. "We took notice of the fact that the industry is consolidating and asked whether growth for growth's sake was necessary." The Firm Committee determined the Kirkland "method of growth was still the better way to go."

 

Evanich said he wonders how some firms' managing partners sleep comfortably when the firm is composed of large numbers of lateral partners and merger acquisitions.

 

"How do you know how well they practice law if they were not raised in your system?" he said, adding that the Kirkland approach gives its partners a "tremendous peace of mind."

 

The global rush

 

The rush to create larger national and international business platforms has left some lawyers expecting the industry to continue consolidating and resemble the accounting and banking industries.

 

"I see each city having a half dozen or so firms dominating our practice," said Bruce R. Meckler, name partner of 68-lawyer Meckler, Bulger & Tilson, which has an office in London. "That's the best thing you can have for a firm like ours.

 

"Specialty practices will do better as other firms get bigger and bigger. While megafirms can serve the Fortune 100, they scare off the smaller companies."

 

Meckler said he expects the mid-sized, full-service firms to have a difficult time competing.

 

Other lawyers say conflicts in litigation will prevent the emergence of a Big Five in the legal industry.

 

"There's something very different about the legal industry," said Evanich of Kirkland & Ellis. "Conflicts will inherently prohibit law firms from becoming the sort of organizations that accounting firms have become. Will there be just six worldwide law firms? No."

 

Schlessinger of Lord, Bissell & Brook, agrees.

 

"I don't really see a Big Five as likely at this point," Schlessinger said. "There has been an enormous amount of consolidation and creation of these mammoth firms, and it's undeniable that it's a powerful force.

 

"At one point we were considered a large firm. Now some would say we're a mid-sized firm. But, there's pretty good evidence that there is a place in the legal market for a firm our size. There are so many issues that arise in trying to merge like-sized law firms in terms of resolving business conflicts and cultural clashes that there is likely to be resistance to that growing movement."

 

George F. Fitzpatrick Jr., managing partner of 45-lawyer Swanson, Martin & Bell, agrees.

 

"There'll always be room for boutique firms who can offer their clients good legal services at reasonable billing rates," Fitzpatrick said.