Did You Say Dentons? Greenberg Traurig Has Already Positioned Itself as a 'National Firm'

Greenberg, No. 14 on the Am Law 100, has 31 offices across the U.S. That makes it, by Dentons' definition, a "national firm." But who says that's even what clients want?

October 24, 2019 at 05:00 AM

6 minute read

By Dylan Jackson

When Dentons recently announced its bold plan to build "the first national law firm" in the U.S., Greenberg Traurig's leaders scoffed, pointing out that their firm had already done that.

If by "national law firm" Dentons meant achieving geographic scale—which is what it suggested when it noted that none of the nation's top 10 full-service law firms has offices in all 20 of the largest U.S. markets—then it had a point.

But Greenberg is pretty close.

Greenberg has the most U.S. offices—31—of the Am Law 50. Fourteen of them are located in one of the top 20 U.S. markets. And the firm is still growing.

Between January and September of this year, it added a net total of 133 attorneys. In all of 2018, the firm added a net of only 18 lawyers. It has seen a remarkable 6% net gain in head count year-over-year. In contrast, the Am Law 100 head count last year grew by an average of 3.64%.

This week, the firm nabbed a Morgan Lewis partner in New York, a Holland & Hart attorney in Denver and an Akerman lateral in Miami. The week prior brought a Sullivan & Cromwell partner and a Quinn Emanuel Urquhart & Sullivan counsel in New York. Greenberg kicked off October with three attorneys hires in New York.

Much of the growth has come from building out the firm's three new offices, said Greenberg CEO Brian Duffy. The firm opened an office in Milan, Italy and two U.S. domestic offices in the smaller markets of Minneapolis and Nashville. Other factors, he said, include the generally strong legal market and a potential future recession, which Duffy said is prompting attorneys to join Greenberg as a safer alternative.

"These factors create opportunities to move [to different] firms and we've been the beneficiary," Duffy said.

Greenberg's growth strategy is reflected in its financials. The firm lags behind the Am Law 100 in profits per equity partner and profit margins, while it comes out ahead in cost per lawyer and revenue growth, according to ALM data. The firm has long shunned the Cravath associate pay scale—a point Greenberg executive chairman Richard Rosenbaum made last year.

"Our lawyers are spread across a diverse geographic area, and we charge rates based on that market area," Duffy said. "That's a unique facet of Greenberg Traurig and how it has been built and what it is. Diversification is a real strength of the firm."

So when Dentons announced its grand new U.S. strategy to bolt on midsized U.S. firms with a dual partnership model structured as a verein—a plan it dubbed "Project Golden Spike" after the ceremonial 17.6-karat gold spike that tied together the Transcontinental Railroad in 1869—Greenberg chafed.

In an op-ed published in The American Lawyer just days after the Dentons announcement, Rosenbaum took a thinly-veiled shot at the verein.

"Recently there has been a great deal of noise about whether it would be a good idea to create a truly 'national law firm' in the United States," Rosenbaum wrote. "We are certain the answer is yes: We embarked on this mission in 1984 when we first left Miami to spread our wings throughout Florida and continued in 1991 when we opened in New York."

From Rosenbaum and Duffy's perspective, this broad strategy of establishing a full-service presence in legal markets large and small (Duffy uses the mantra "local presence, global reach") has always been the mission of Greenberg. In addition to the two new office launches in smaller markets, the firm plans to open between 15 and 20 global and domestic offices over the next decade, at a rate of roughly two per year, Duffy said.

While the firm's CEO isn't particularly a fan of the "national law firm" label that Dentons coined, he makes the case that Greenberg's broad ambitions of "covering every major U.S. legal market" align with the Dentons' definition. The difference is the structure.

And within the debate over structure—traditional growth versus a verein—is the central question of which model provides for smoother collaboration between disparate geographies, said Zeughauser Group consultant Mary K. Young. Other highly successful Am Law 10 firms such as DLA Piper, Baker McKenzie and Hogan Lovells, have also adopted a verein structure.

"I think, regardless of how you're organized, the challenge is within the leadership and management so you provide the integration you need to do this work seamlessly," Young said. "If you're in Cincinnati and you need to have something done in Los Angeles, it has to be seamless."

In the end, though, the squabble over who and what is a national firm may be moot, said Tom Clay, principal of consulting firm Altman Weil.

Altman regularly surveys law firm clients, and Clay has found no broad demand for a firm that is geographically diverse. Clients that need a firm in 20 different cities would have to be massive, and there just aren't many who could take advantage of such breadth.

"To a degree, this is clearly branding," Clay said. "Let's say there's a big business in Miami that needs high-level securities work. They want a high-level securities lawyer and don't really care how many offices you have."

Comparing the Big Four's scale to that of a law firm is fruitless as well, said Clay, as the two industries have completely different economics. And if the goal is to draw clients away from competitors, geography isn't the most compelling differentiator.

"What's the pitch?" Clay said. "You love your lawyer and the work they do for you, but we have an office in Tulsa and they don't?"