Market News

What’s the Next Hot Legal Market After Salt Lake City? Analysts Point to Boise, Las Vegas and Raleigh

By Andrew Maloney for The American Lawyer

After drawing in Dentons, Kirkland & Ellis and Foley & Lardner within the last year, legal analysts are keeping an eye out for the next Salt Lake City—an emerging market with the resources and trajectory to sustain growth.

There may not be a consensus for that crown. Nor a consensus for what qualifies as “emerging.” But industry observers did point to a handful of markets that could be considered overlooked or off-the-radar, with the potential for new or renewed Big Law growth spurts over the next several years.

Such places include Raleigh/Durham and Charlotte, North Carolina, which have already received quite a bit of interest, but should remain an attractive destination because of relatively low rates in the region and proximity to world-class research. Las Vegas was a magnet for mergers about 10 years ago, but continues to grow, and could entice new candidates with the ascent of professional sports gambling deals.

Other markets mentioned by analysts include Boise, Idaho; Spokane, Washington; Miami; and Detroit.

Of course, firms are going to find different markets desirable based on different strategies, and they’re going to be led by demand.

“What firms who are thinking clearly are doing is they’re aligning geographic priorities with strategic priorities, and they’re going where the money is,” said Kent Zimmermann, of Zeughauser Group. For life sciences, they’re often going to Boston or Northern California or New York. For oil and gas, Texas, for example.

“So you’ve got to get the strategy straight first, then geography. Unless you’re a firm with a geographic strategy, which is the case for global firms, for example. But I think for most firms in the U.S., step one is—in what area do you want to be a dominant player? Two, where’s the demand in money?”

Zimmermann and others pointed to Research Triangle, the Raleigh-Durham-Cary metropolitan area in North Carolina that’s home to Duke University, the University of North Carolina and North Carolina State University, as an ascendant competitor in the tech and life sciences space.

The region has drawn plenty of venture capital and plenty of firms in the last few years, including Nelson Mullins Riley & Scarborough, Barnes & Thornburg and Nixon Peabody, to name a few. It’s also home to pharma giant GSK, and the future site of a campus and engineering hub for Apple.

“I think it’s starting to become a real emerging technology hub. It’s been that for some time, but I think it’s really continuing to grow. And I think it’s appealing to some firms,” said Lisa Smith, a principal at Fairfax Associates.

She noted the area has had a “robust” and “real” tech presence that’s attracted interest for decades. That hasn’t always guaranteed an influx of firms. But the market is getting renewed attention.

“I think there’s sort of a question sometimes around, say, Apple, for example, opening a hub there. Is that going to drive legal work? Is it going to drive legal work in North Carolina? They’ve got plenty of legal work they’re doling out in California, but are they going to be hiring firms on the ground?” Smith said. “Certainly when you see a concentration of companies, and have the educational institutions, you’ve got the potential for spin-out business and emerging companies coming in. It becomes a pretty attractive market for firms focusing on that sector.”

Michael Ellenhorn, CEO of investigative intelligence firm Decipher, noted Las Vegas could also be back on the Big Law radar screen, noting it is growing “by leaps and bounds.” Population growth is one of several factors firms and analysts look for in secondary and emerging markets, and the Vegas area is projected to grow from 2.4 million to more than 3 million in the next 10 to 15 years.

The area is already a destination for construction defect litigation, but a boom in sports gambling and the push by professional sports franchises for licensing deals could also reenergize the market, some analysts say.

Smith, of Fairfax, said while there is some interest in the market, much of it is from regional firms. “We don’t see a lot of firms looking for a major presence there. It’s somewhat similar to Raleigh—a good number of out-of-state firms already, and some of those entered via merger maybe 10-15 years ago.”

Boise and Spokane have also creeped in to the conversation. Both markets currently have few Big Law competitors, but analysts say they’ve attracted some Silicon Valley expats during the pandemic and could generate VC interest.

Indeed, Boise in particular has drawn direct comparisons to Salt Lake City, in terms of growth potential. Salt Lake-based Kirton McConkie told the Mid-Market Report earlier this year that was one of the reasons the 150-laywer firm decided to open an office in Boise.

“The Boise market really piqued our interest,” firm president Robert Walker said in an interview, noting the growth in population and strength of the real estate market, and adding that “Boise seems to be following somewhat in Salt Lake’s footsteps.”

Another piece of the emerging law firm market puzzle is a cognizant effort by local governments to draw in new business with incentives and/or low taxes. Nashville, Tennessee, and Austin, Texas, are some popular markets that have cultivated a reputation for being business-friendly, and drawn in plenty of new firms. To that effect, analysts have also mentioned Miami, which has made an explicit pitch to draw in Silicon Valley investment.

That market “is getting a lot of attention,” Scott Yaccarino, a partner with Empire Search Partners, told The American Lawyer in August. “Lots of companies, tech and funds moving there. Law firms will follow.”

Detroit was also cited as an under-the-radar market after a new round of technology tax subsidies from the state that’s spurred some growth and interest in that sector. Dan Scott, of Rochester, Michigan-based Angott Search Group, said he hasn’t fielded those types of inquiries yet. But there could be a lag in the interest and firms actually moving on it.

Scott also said firms that have established offices in the area over the last few years are “aggressively expanding,” including McDonald Hopkins; Frost Brown Todd; and Miller Johnson.

“I’m not hearing my clients say, ‘This commitment to technology, this investment—we need someone to help us with that,’” he said in an interview this week. “That doesn’t mean it’s not happening.”