Law firm branding in New York. If you can make it there…
In international law firm branding, being ‘successful in New York’ matters far more than a purely rational look at the data suggests it should.
Unlike London — the other global city that really counts — New York doesn’t have a total stranglehold on the market for premium deals and disputes. Historically only around 40% of total US premium revenues are sourced from New York — the balance from a range of other major US cities: Los Angeles, Chicago, San Fransisco, Washington DC, etc. Whereas in the UK, London accounts for much closer to 100%. Yet still, fortunes have been won and lost over decades by firms attempting to maintain or build a New York component to their brand.
Irrational exuberance
At one level, the attraction of New York is undeniable. The major investment banks call it home, and it’s arguably the financial capital of the world (London again would differ on this). Alongside that, it’s perceived to be the city that leads the world in terms of the quality of its advisors, whether management consultants, accountants or lawyers.
On the other hand, the supply of this top talent is by definition limited, meaning that any firm wanting to push its way into the New York market faces the prospect of paying eye-watering amounts of money for that portion of top talent that is ‘on the market.’ The very public demise of Dewey still serves as a salutary lesson in what can go wrong if you make too many financial commitments to too many top earners — particularly laterals — to secure their loyalty.
The strategy most firms seem to adopt to New York is equivalent to throwing mud against the wall to see if anything sticks
Despite this, they keep on coming. Why? Because the stakes in branding terms are so high and, tough as it is today, it’s going to get even tougher in the future as more firms establish credible New York angles to their historical national identities and raise the bar on price-of-entry. Firms like Latham & Watkins and Kirkland & Ellis have turned early beachheads into credible offices with deep enough benches to say that they have strong New York presence — and the flow of major deals and disputes going their way seems to suggest that it’s working.
Focus. Focus. Focus
The strategy that ‘non-New York’ premium firms should follow to build their brand presence in New York is on the one hand straightforward and the other complicated. They should adopt a laser-like focus on building their New York brand around a very tightly defined set of practices, industry groups or very narrow combination of the two. And they should also choose those practices with a highly disciplined and realistic awareness of what they are already famous for nationally or internationally.
Quinn Emanuel is another firm that can definitively claim to have ‘made it’ in New York, from it’s original West Coast beginnings. From a brand perspective, their litigation-only strategy helped them gain traction in a city not exactly wanting for litigators. Cooley’s stellar reputation as a tech firm — with the accompanying Silicon Valley vibe — has enabled it to get a foothold in the Big Apple despite being a relative minnow in overall revenues and practices compared with many other large US firms. Mayer Brown, originally a Chicago firm, has achieved something similar by leveraging its reputation for market-leading structured finance and appellate/Supreme Court practices.
Despite the obvious attraction of having a focused approach, the strategy most firms seem to adopt to New York is equivalent to throwing mud against the wall to see if anything sticks — a bit harsh perhaps, but not that far from the truth as far as it appears from the outside.
The reason for this is that it’s incredibly hard to be disciplined in the execution of a new/growth office strategy. Premium law firms, even the most ‘managed’, remain partnerships — in terms of their governance and their decision-making cultures — as much as commercial businesses, which tends to lead to leadership teams spreading resources around to take the consensus with them.
Despite the many strategic challenges, ‘big in New York’ still retains massive allure in terms of law firm branding
In strategy terms, this tends to manifest itself in shopping list length ‘priority practices’ and a tendency to invest ‘off-strategy’ as much as in line with it when it comes to lateral hires.
Keeping in shape
From the other end of the telescope, those firms that already have a strong New York brand pedigree need to make sure that as national and international firms gain traction in the city, they don’t get demoted to niche or underweight status. This is a better problem to have than trying to build a New York reputation. Still, given the increasing competitive pressures, any firm that takes its eye off the ball is likely to find itself prey to those actively searching for top talent. These firms should also take a careful look at their strengths and focus their brands and strategies on where they can win.
Despite the many strategic challenges, ‘big in New York’ still retains massive allure in terms of law firm branding on a national and international stage, As long as that continues more firms will want to make it there.
End.
