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Big Firms in Chicago Face a Talent Squeeze
The National Law Journal
National law firms have rushed into Chicago during the past decade, especially in the past three years, but many are finding now that their collective arrival is fueling intense competition to fill those offices with lawyers.
Several large firms that have entered the market during the past three years, including Dewey & LeBoeuf and Nixon Peabody, have fewer than 30 lawyers in the city. Paul, Hastings, Janofsky & Walker, which arrived in November 2006, crossed the 30-lawyer threshold this fall with the addition of new associates. And Washington-based Steptoe & Johnson LLP has fewer partners in its Chicago office than when it opened its doors last year.
Leaders at many of the firms that have been in the city for years say they are still eager to snap up experienced lawyers or groups of attorneys to build the Chicago offices to their optimal size. Meanwhile, more firms keep flowing in, including the arrival earlier this year of Boston's Ropes & Gray, New York's Proskauer Rose and Indianapolis' Baker & Daniels.
"If you have more and more elite firms, then you're going to have more and more competition for a stable group of people," said Michael King, who is the managing partner of New York-based Dewey & LeBoeuf's Chicago office. "On the other hand, it also creates more of a market." Dewey opened its Chicago office in 2005 with five attorneys, before the firm's 2007 merger, and had grown to about 30 at one point, but is now at about 25.
AIMING FOR 100
There are about 75 national firms that have migrated to Chicago since the 1980s, and many of them seek the same types of lawyers -- those with books of business of at least $1 million and, likely, more than that. The firms often aim for offices of at least 100 lawyers and consider 30 to 50 essential to justify the cost of the office, said Chris Percival, a recruiter for Chicago Legal Search.
"I can't tell you how many firms have told us that's what they want to do," Percival said, referring to the 100-lawyer mark. "It's just not that easy."
Richard Chesley, chairman of Paul Hastings' Chicago office, who was one of two partners to open the office in November 2006, hasn't been disappointed with the rate of growth to about 38 lawyers now, but he's still recruiting for what firm Chairman Seth Zachary has said is a long-term goal of 100 lawyers.
Steptoe opened its Chicago office in January 2007 with nine lawyers and now has 13. By comparison, it opened an office in Century City, Calif., six months earlier, which now has 31 attorneys. "When your home base is not Chicago, then you need to get to know the market and take your time," said Philip Malet, Steptoe's vice chairman.
Nixon Peabody, which entered the Chicago market by taking on 16 intellectual property attorneys from the dying Jenkens & Gilchrist in March 2007, now has 19 lawyers. The firm has some prospective hires in the pipeline now, but there's always the possibility that they'll go elsewhere, said Stephen Rudisill, the firm's Chicago managing partner. "Anybody in the market is talking to a number of firms," he said.
Milwaukee's Quarles & Brady, which came to Chicago in 1999 and has doubled its head count to 58 lawyers, recently was poised to hire a group of attorneys who, ultimately, opted for another new firm in town, said D. Scott Watson, managing partner for the office. The office, which is hiring in advance of moving to a bigger space next year, has snagged just one lateral attorney in the past year, compared with 10 in the prior year, he said.
"It's getting increasingly competitive," Watson said.
Epstein Becker & Green, another firm that's been in Chicago for about a decade, has 13 lawyers there, up from two in 1999. Its aim is to have closer to 25 within three years and perhaps ultimately 50, said Chairman Doug Hastings. "That plan would have us probably wanting to grow not only there but also in some other offices, somewhat more rapidly over the next decade than in the one past," he said.
Troutman Sanders of Atlanta is getting into the city via a merger, announced in June, with Ross, Dixon, & Bell, which has a Chicago office of 15 lawyers. It is planning to jump to at least 60 lawyers in the city and maybe double that number, said Troutman Chairman Robert Webb Jr.
"I'm very well aware of the competitiveness of the Chicago market, but I would suggest to you that it is no more competitive than New York," Webb said. "We think we're up to the task."