Recession-Era Office Openings Are Paying Off, Says Barnes & Thornburg
As the legal industry reeled in 2009, Barnes & Thornburg gambled on launching new offices in Delaware, Georgia, Minnesota and Ohio. How are they faring 10 years on?
October 16, 2019 at 03:00 PM
5 minute read
The original version of this story was published on The American Lawyer
Barnes & Thornburg was looking to scale up from a superregional law firm to a national one at the same time the global economy began to crash.
As the the legal industry reeled from the Great Recession, the Indianapolis-based law firm in 2009 launched new offices in Atlanta; Columbus, Ohio; Minneapolis; and Wilmington, Delaware. Although each office has grown at different rates—some slowly—the firm is celebrating their collective success and the 10th anniversary of their openings.
"I've been waiting for this phone call for a long time," Robert Grand, the firm's managing partner, told The American Lawyer. "Well, when you open up four offices in 2009, you remember what the economy looked like in 2009. There were a lot of people who thought that, by 2019 or even sooner than that, we'd be singing a different tune."
The firm identified Atlanta, Columbus, Minneapolis and Wilmington as being "strategic to building a national law firm" in 2007 and 2008. The impetus, in part, came from clients that were demanding larger legal teams to handle complicated issues, Grand said.
Had Barnes & Thornburg decided to "hit the pause button" and not open those offices, it probably would have been acquired by a larger firm, Grand speculated.
Paradoxically, Dan Scott, a Midwest-based consultant with Angott Search Group, said Barnes & Thornburg may partly have the recession to thank for whatever success it has found. That's because companies may reward law firms located in cheaper markets as they work to decrease their outside counsel costs, Scott wrote in an email.
"The length of the 2009 recession made this more than a passing trend," Scott added. "Barnes was the right firm at the right time with the right plan to take advantage of national market pressures."
Zeughauser Group consultant Kent Zimmermann said Barnes & Thornburg appears to have outperformed the Am Law 100 on firmwide revenue growth since 2009, according to financial data collected by ALM. Zimmermann said the firm's practice areas gave it an advantage in prior economic downturns, adding that he considers the firm to be well managed.
"Most of the firm's growth in the last 10 years has been in markets that have gotten increasingly competitive, but the firm has held its own and is continuing to grow," Zimmermann said.
Still, financial data collected by ALM shows that Barnes & Thornburg, ranked 93rd on the Am Law 100, hasn't always kept pace in growing revenue, revenue per lawyer and profits per partner in recent years.
Although the firm's overall revenue has grown each year since 2014, the percentage of growth has fluctuated between less than 1% and just under 7%. The firm's head count also grew faster than its revenue last year.
Grand said Barnes & Thornburg is currently looking both to add offices in new locations and bolster the staff of its existing locations. He said the firm has struggled with growing its Columbus and Wilmington offices.
Grand described Columbus as a "very difficult" market that the firm is choosing to double down on: Over the past few years, the firm has been converting the Columbus office from a branch that focused on labor and employment issues to a full-service office.
Barnes & Thornburg had four lawyers working in Columbus in 2009, according to ALM data. According to the firm's website, there are 21 people working in the firm's Columbus office, including partners, associates, an office administrator and a lobbyist.
"We think there's a lot of opportunity in Ohio," Grand said. "It just hasn't grown as much as we'd like."
The firm's Wilmington office has also grown slowly and steadily from one person in 2009 to 11. Barnes & Thornburg is hoping to have 12 to 15 lawyers working out of Delaware within the next three to five years, Grand said.
Grand attributed Wilmington's slow growth to the difficulty of the Delaware bar exam: Unlike other states, Delaware does not offer any bar reciprocity to any other state. The Delaware bar exam also has the highest minimum-scoring threshold in the country.
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