A recent wave of entrants to the Boston legal market underscores that outside firms large and small are finding the client-rich environment irresistible and are undaunted by the challenge of competing with the city’s established firms.
North Carolina-based business firm Womble Carlyle opened a Boston office Sept. 1. While the new office will initially focus on intellectual property, its managing partner, Sarah A. Keefe, expects to expand to eventually offer a full range of services to clients in the pharmaceutical, biotechnology and life sciences industries.
“We’re very much interested in growing our office and tapping into that Boston legal talent,” Keefe says.
Also on Sept. 1, global law firm Hogan Lovells made its official entrance into the Boston market, combining with litigation boutique Collora. William J. Lovett, Collora’s former managing partner and now managing partner for Hogan Lovells’ new office, says it’s no mystery why Boston has become a target for outside firms looking to expand.
“Boston is becoming a hot market not just for legal firms but for life sciences companies and financial institutions,” Lovett says.
In March, New York City-based Haug Partners announced the opening of an office in Boston’s Financial District to serve clients in the life sciences and technology sectors. Ed Haug, managing partner at the firm, says 20 years ago it would have been much tougher for an outside firm to enter the Boston market, particularly one from New York.
But Haug sees a “different climate” now, created by the fact that entrepreneurs from across the country and the world have flocked to Boston, attracted by the high-tech and biotechnology boom. According to Haug, that makes it much more likely that the decision-makers for corporate clients are not natives of the region.
“A lot of the management people I talk to, whether it’s general counsel, head of patents or business people, are not necessarily from the Boston area,” he says.
Without the ties to Boston’s established law firms, Haug sees corporate clients being much more open to sending work to new players in the market. And those new players are confident they can compete in a traditionally tough market.
The New York City firm Nesenoff & Miltenberg announced the opening of a Boston office in April. The 15-attorney firm generally does business litigation, but the new office at least for now specializes in Title IX due process litigation, representing students accused of sexual misconduct.
Founding partner Andrew T. Miltenberg says the fact that there are more than 40 colleges and universities within a short drive of Boston made it a natural location for an office, which is currently staffed with one resident Title IX attorney, Tara J. Davis.
“We had started to get a lot more work and spending a lot of time up there,” Miltenberg says from his New York City office. “It became logistically attractive for us to have an office there.”
While Miltenberg acknowledges that Boston has its own experts in the field of Title IX litigation, he is confident that there is enough work to justify the new office.
“We’ve developed a specialty in this area, we’re good at it, and we’ve developed a reputation,” he says. “It’s a natural fit.”
Haug Partners’ opening of a Boston office coincided with the firm changing its name from Frommer, Lawrence & Haug. The firm’s main office is in New York City and it has a third office in Washington, D.C.
Ed Haug says the latest expansion into Boston was part of a business plan to grow the firm along the East Coast, with the possibility of future expansion into Florida and North Carolina.
Given that patent litigation is the firm’s biggest practice area, Haug says Boston was a natural choice, especially since the firm already has clients in the Boston-Cambridge tech corridor.
“Together with San Francisco on the West Coast, Boston is certainly right up there as a very active and deep place for intellectual property of all kinds, whether it’s working with startup companies, right through acquiring IP rights as well as litigating them,” he says.
According to Asher Rubin, who heads Hogan Lovells’ life sciences industry group, the “explosion” of the life sciences sector in Boston beginning in 2009-2010 was the driving force behind the firm’s decision to enter the market.
“As big law firms have expanded globally to serve clients everywhere the client needs to be, we saw that there was an opportunity for a firm with both our industry expertise [in life sciences] and global platform,” Rubin says.
Hooper, Lundy & Bookman, a national health law boutique, had three offices in California and one in Washington, D.C., before opening its fifth office in Boston in January. Heading the Boston office is David S. Schumacher, a former deputy chief of the health care fraud unit in the U.S. Attorney’s Office in Boston.
Managing partner Robert W. Lundy Jr. says the firm set up shop in Boston partly in hopes of adding to and serving its client base in New England. The new office paid dividends right away with the Massachusetts Senior Care Association, a trade association for the long-term care industry, signing on as a client, he says.
“We got that because of our expertise in that particular sub-sector of the health care industry,” Lundy says.
Lundy says it was also important to establish a presence in Boston in order to tap into the talented pool of health care lawyers in the region.
“We’re looking for the best talent in the country,” he says.
Boston is Womble Carlyle’s 16th office, with the firm’s other 15 offices and more than 500 lawyers concentrated in tech corridors in the southeast and mid-Atlantic, in addition to Silicon Valley in California.
Keefe says the opening of a Boston office was client driven.
“We identified 140 of our top 500 clients that had an established Boston presence, so it just made a lot of sense for us to be here to service those clients,” she says.
Also new to the area, the 1,900-lawyer global firm Kirkland & Ellis opened its eighth U.S. office in Boston in May. The firm declined a request for an interview.
“Together with San Francisco on the West Coast, Boston is certainly right up there as a very active and deep place for intellectual property of all kinds, whether it’s working with startup companies, right through acquiring IP rights as well as litigating them.”
— Ed Haug, Haug Partners
Lean and mean
Most of the new firms expressed an openness to alternative fee arrangements that cost-conscious clients would find attractive. That would appear to increase the pressure on established Boston firms to move away from the billable hour as the standard billing model.
Keefe says Womble Carlyle is “very familiar” with client requests for alternative fee structures.
“We’re very flexible,” she says.
Haug says his firm can compete with the big firms when it comes to value. He explains that his firm’s billing rates can be kept in line because it doesn’t bear the cost of the high associate-to-partner ratios and bloated support staffs borne by large firms.
Like Womble Carlyle, Haug Partners is flexible in its billing arrangements, he says.
“We try not to go with the billing hour if we can, and a lot of clients really appreciate that, including big ones,” Haug says.
Rubin says Hogan Lovells also is “forward thinking” when it comes to billing, with the firm assigning “pricing teams” to work with the client and firm partners to determine the best pricing model for a given matter.
“We understand the pressures that clients have on their legal budget and the pressures that they have put on law firms,” Rubin says. “We are able to react and/or be proactive in that respect.”
Lundy says Hooper Lundy can provide more value to clients given that its lawyers focus solely on health care law. While a big firm might assign both a health care law specialist and a business transaction attorney to conduct a merger for a health care client, because his firm’s transaction attorneys are also health care law specialists, only one lawyer would be needed to perform the same task.
“When you have the entire firm dealing with one industry, it’s more efficient, it’s more cost-effective, and in our view gives a higher-quality work product to the client,” he says.
Forward base of operations
Haug says he thought it was important to add attorneys who knew the Boston market, so he brought in life sciences attorney John C. Dougherty from DLA Piper to manage the office, as well as veteran commercial litigator Fred A. Kelly Jr. from Nixon Peabody.
While not as big as firms like Ropes & Gray, he maintains that Haug Partners’ experience in the “hard core” technical areas makes it highly competitive for clients in the hi-tech and life sciences sectors.
Haug also sees that big firms representing big corporations often leads to conflicts of interest. He says his firm is well positioned to pick up work when such conflicts arise.
While Miltenberg is hopeful of getting a lot of work in the Boston area, he also views a Boston office as providing a base of operations for handling Title IX cases throughout New England.
“For the moment, there is a lot of this work to go around,” Miltenberg says. “I don’t know what that will look like a year from now. We intend to be fluid about it and reassess [the need for a Boston office] every year. It made sense right now.”
Later this year Womble Carlyle will combine with a leading firm in the United Kingdom, Bond Dickinson. The new firm — Womble, Bond, Dickinson — will have more than 1,000 lawyers in 24 offices.
Keefe, whose parents are both from South Boston and who was raised on the South Shore, says that the lawyers at Bond Dickinson are already excited about the opportunities presented by the Boston office. Given that the city is an important portal to Europe, she expects her office to experience even greater growth because of Womble Carlyle’s partnering with a UK firm.
“My hope would be to see Boston become one of the firm’s largest offices in the next 10 years,” Keefe says.