After Years of International Expansion, Dentons Now Eyeing Pennsylvania for Growth
The international power, which boasts well over 100 offices worldwide, is now looking for expansion opportunities in the United States—and Pennsylvania is on its radar.
November 26, 2018 at 05:00 AM
6 minute read
The original version of this story was published on The American Lawyer
Attorneys Joe Andrew and Elliott Portnoy, who together oversee Dentons' worldwide operations, hold passports that would be the envy of any aspiring globehopper. But after marching into far-flung jurisdictions like Indonesia, Uganda, Peru and the Netherlands in recent years, Dentons' leadership sees inviting new terrain for the firm's growth: a nearly 4-million-square-mile market that's home to more than 325 million people.
“When we created Dentons, if you looked at the trajectory of growth within the global legal market, one would have thought that the United States' share of the global legal market would begin to decline,” U.S. CEO Mike McNamara says. “To the contrary, here in 2018, it's increased. The United States is now over 50 percent of the global legal spend, and it truly has solidified itself, despite all the ebbs and flows of the global business economy, as the legal market most interconnected in global transactions and disputes.”
Emerging markets were ascendant in 2013, when the global behemoth took on its current name after a three-way merger. It has continued to ride that wave, boasting 23 combinations and several other growth transactions, bringing it into 25 new countries in the past five years.
To be clear, the 9,000-attorney firm is already well entrenched in the U.S., with 24 offices around the country and a presence in 9 of its 10 largest metropolitan areas (Philadelphia being the exception). But, when the firm's global management committee—which includes the global leadership team and CEOs of individual regions—sits down, it's agreed that the U.S. is the No. 1 target for expansion.
“Of course, all of my colleagues have priorities for where they want to grow talent and where they want to grow geographic presence and grow client capabilities in their market,” McNamara says.
“But growing the United States market remains at the top of the list because so many of the client relationships that they enjoy—so many of the panel appointments and panel processes that are now a key driver of business in the legal marketplace—really depend on a U.S nexus,” he explains. “Having the vibrancy of the team and depth of talent that we have in the U.S. is not just for the benefit of our fine partners in the U.S., but it really is for the benefit of my colleagues around the world.”
In addition to making the case that access to global panels opens doors for American attorneys, and vice versa, McNamara highlights client service advantages that come with being part of a worldwide team.
“We're able to be more efficient for our clients because we know their business and we're able to work more closely with colleagues in London or Berlin or Guangzhou or Dubai on a client matter without that lawyer outside the U.S. having to learn the clients from scratch,” he says. “The client gets the seamlessness of connectivity. They don't have to worry about managing multiple law firms or multiple service providers—all they know is they get to call their lawyer in Kansas City, who suddenly has and is managing this tremendous team around the world.”
Zeughauser Group consultant Kent Zimmermann is not surprised by Dentons' aims, pointing to the persistence of high rates in the U.S. compared with other jurisdictions, and the vibrancy of its litigation market.
“I give a lot of credit to the global firms that have rapidly built international practices,” he says. “I think, for many of them, growing in the U.S. is a high priority, but it's not that easy to do.”
In many conversations with partners at firms contemplating mergers, Zimmermann first finds resistance to joining larger firms, out of the fear of lost independence. In other cases, there's a willingness to consider a similar-sized firm. And, on the occasions when partners say they'd be willing to join a larger firm if it's really a compelling proposition, they say they don't want to join a “mega firm.” Asked for examples, they begin listing different global law firms.
“There's an underappreciation of the strengths that the global firms bring to the table and the benefits and the advantages that they have,” he says. These include the strength of their brands and their deep pool of resources—which make it easier for them to compete with the Big Four as technologies like artificial intelligence become an increasingly important component of legal service delivery.
McNamara says the combination already has paid off for attorneys who came aboard in Hawaii earlier this year. Dentons first encountered Alston Hunt Floyd & Ing on the opposite side of the table in litigation and determined the local firm's heft in that field matched Dentons' national strength. The move—which made Dentons the first national, let alone global, firm in Hawaii—gives it a presence in the heart of the Pacific Rim, where it already has offices in East and Southeast Asia, Australia and North and South America.
“Just last week, one of our newest partners in Hawaii was sending emails around the firm on behalf of an existing client that she'd been doing work for for probably 10 years at her prior firm,” McNamara recounts. “They'd identified a need in four countries and, with two emails, she identified a lawyer to help the client in those countries to jump in and help a transaction that she was in the middle of. In a prior life, she would not have been able to help the client with the global issues, and it was like there was a green light coming on for her.”
The firm is also committed to building depth in existing American markets, following recent additions of a technology-focused intellectual property team on the West Coast, a federal regulatory team specializing in transportation on the East Coast and an IP litigation team in the Midwest.
And McNamara hopes to be able to announce a brand new set of locations in 2019.
“From a macro perspective, important business centers where we are not yet physically present include the Pacific Northwest, the Upper Midwest and along the Acela corridor,” he says, naming Pennsylvania in particular. The firm is also undersized for the marketplace in Florida, Texas and the Southwest, he adds.
But McNamara acknowledges that U.S. expansion turns on identifying talented groups of attorneys who aspire to build global connections for their practices.
“While you can say one should have a ranked list by size of legal markets in the U.S. where we are not, one of the most important elements for us is finding lawyers who are of the highest quality, highest integrity, highest caliber, who are really looking to transform their practice and benefit from the connections that Dentons has now created for lawyers around the world,” he says.
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