The Changing Economic Geography of Large U.S. Law Firms

Abstract:     
During the last three decades, the number of lawyers working for large U.S. corporate law firms has increased dramatically. This study draws upon the economic geography literature on producer services and global cities to outline a theoretical framework for the location and growth of large corporate law firms. The framework is then applied to a dataset of large U.S. law firms (Am Law 50, 100, 200) and their principal clientele (Fortune 500). We also use network analysis to observe changes in city centrality over time. Our preliminary findings suggest that over the last twenty years, New York City has supplanted Washington, DC as the more interconnected market, particularly for law firms with international offices in Europe and Asia. Although profitability and revenues per lawyer appear intimately tied to presence in large global cities, particularly New York City and London, the network analysis reveals several firms that are following successful niche strategies. We use this network analysis and block modeling methodology to identify structural elements of the large U.S. market that are based on geographic differences, including factors related to change over time. In turn, we discuss the implications of these findings for large U.S. law firms.

Keywords: economic geography, law firms, lawyers, agglomeration, Fortune 500, Am Law 100, Am Law 200

JEL Classifications: O18, L84, R12

Working Paper Series