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Several of Pennsylvania's homegrown law firms have expanded by hundreds of lawyers in the last decade, merging and acquiring to become national or international brands.

As Pennsylvania's Am Law 200 firms scaled up, some have maintained a holding pattern in their founding offices while looking to grow more substantially elsewhere. Others have eschewed the idea of a Pennsylvania headquarters altogether, touting a national footprint with leaders and key partners distributed broadly.

Several big out-of-state firms, meanwhile, acquired or raided the Pennsylvania natives to build up their own presence in the Keystone State, further re-balancing the region's legal market.

Now, after two recent merger announcements, it's likely that six law firms with Pennsylvania origins will soon be present in the Am Law 50—the lowest gross revenue of an Am Law 50 firm in 2019 was $817 million.

Philadelphia-founded Morgan, Lewis & Bockius and Dechert, and Pittsburgh-born Reed Smith and K&L Gates are longtime members of that club. Drinker Biddle & Reath officially merged with Faegre Baker Daniels this month, and Pepper Hamilton will merge with Troutman Sanders come April. Each of those two new firms—Faegre Drinker Biddle & Reath and Troutman Pepper Hamilton Sanders—are projected to be within the top 50 largest law firms by gross revenue.

But transformational mergers don't have to come with hundreds of lawyers.

Duane Morris' latest acquisition, though smaller in scale, significantly boosted the firm's presence in the nation's largest legal market. After merging with Satterlee Stephens this month, it has about 160 New York lawyers—only three other Pennsylvania-founded firms have more than that.

"In the last couple years, the economies of scale have just made becoming bigger and more profitable the name of the game," Philadelphia legal recruiter Cathy Abelson said.

This phenomenon is nothing new. Large-scale combinations have been a big story for several Philadelphia and Pittsburgh firms over the last decade.

The largest was Morgan Lewis' acquisition of more than 750 professionals from Bingham McCutchen in 2014, as the latter firm faltered, which catapulted Morgan Lewis into the top 10 largest U.S. law firms by revenue.

Blank Rome made a similar move, though not at quite the same scale, when it brought on more than 100 lawyers from failing Dickstein Shapiro in 2016.

Philadelphia-based Ballard Spahr and Saul Ewing both announced Midwest mergers in 2017 that added over 100 lawyers to their firms. Ballard combined with Minneapolis-based Lindquist & Vennum, while Saul Ewing merged with Chicago-based Arnstein & Lehr.

Fox Rothschild announced a deal of similar size in 2018, when it brought on over 100 lawyers from Southeast firm Smith Moore Leatherwood. While that was the firm's largest combination, it was far from the only significant addition in the last decade, as Fox acquired sizeable groups in Minneapolis and the Pacific Northwest, as well as smaller practices around the country.

Others among Pennsylvania's largest have grown through a greater number of smaller moves. For some firms—including Dechert, Morgan Lewis, Reed Smith and Duane Morris—growth has taken place across the globe.

Some of these firms now refer to themselves as "national" or "international" law firms, rather than Philadelphia-based or Pittsburgh-based.

They're "making better efforts to make sure non-headquarters offices are really in the mix," Philadelphia-area legal recruiter Frank D'Amore said. "The better firms are at doing that, the more unified the firm becomes, and that changes the focus. It also kind of changes how firms think of themselves."

While their local numbers remain high, relative to offices in most other locations, no Pennsylvania-founded Am Law 200 firm has grown its founding office by more than 10 lawyers in the eight-year span examined for this story.

This trend raises a big question about the legal industry in Philadelphia and Pittsburgh: Who truly dominates the local market for legal talent?

New Firms Enter

Pennsylvania-born firms' growth outside the state is clear from the numbers.

According to head count data from ALM Intelligence, Am Law 200 firms founded in Philadelphia and Pittsburgh, when viewed as a single population, saw their total lawyer head count grow by nearly 2,000 from 2011 to 2019.

(ALM Intelligence head count data is based on full-time equivalent lawyers the year before. While many firms have reported 2019 head count to ALM, those reports have not yet been finalized for all of them.)

But the majority of these Am Law 200 firms have seen their numbers shrink in their hometowns.

The 15 Am Law 200 firms founded in the state boasted a total of 2,277 Philadelphia lawyers in 2011. As of last year, that number had declined by more than 200, to 2,060 Philadelphia attorneys.

Those 15 firms had a total of 815 Pittsburgh lawyers in 2011. As of 2019, that dropped by 93 lawyers, to 722 Pittsburgh attorneys.

That doesn't mean large firms are all disinterested in the state. Big Law on the whole has grown its Pennsylvania presence by 14.8% over the years.

Among the 250 largest law firms by head count, the number of Pennsylvania lawyers has increased to 5,191 in 2019, compared with 4,521 in 2011, according to ALM Intelligence data.

That accounts for several large firms that first established Pennsylvania offices between 2011 and 2019.

Clark Hill acquired Pittsburgh-based Thorp Reed, which also had a Philadelphia presence. Gordon Rees Scully Mansukhani opened in Philadelphia with a group from Cozen O'Connor.  Baker & Hostetler acquired Philadelphia intellectual property firm Woodcock Washburn.

In establishing their Philadelphia offices, Ice Miller took a group from Panitch Schwarze Belisario & Nadel, Armstrong Teasdale took a group from Montgomery McCracken Walker & Rhoads, and Shook, Hardy & Bacon added a partner from Dechert. And Holland & Knight entered the market in 2018 by taking over 30 lawyers from Reed Smith's Philadelphia location.

Frost Brown Todd, Fisher & Phillips and Freeman Mathis & Gary have also opened in Pittsburgh in recent years. And this year, international megafirm Dentons made its mark there by combining with midsize firm Cohen & Grigsby.

For the Big Law firms opening in Pennsylvania, and for the Pennsylvania firms opening in other cities, the motivation is the same, D'Amore said. Both groups are on "a quest to fill out platforms," he said, "and to seek more profitable work."

Locals Turn Attention Elsewhere

As out-of-state firms grew in each of the state's two largest cities, the locally founded firms haven't grown much locally—and some are a bit smaller.

Blank Rome, Drinker Biddle and Pepper Hamilton each saw their Philadelphia head count decrease by more than 35 lawyers from 2011 to 2019. Blank Rome and Pepper each dipped down to around 180 lawyers in the city, while Drinker was at fewer than 150 last year.

Dechert's head count in the city where it was founded went from 212 to 154, ALM Intelligence data from 2011 to 2019 shows.

Big lateral deals have become less and less common within the city, and there isn't much motivation to move from one locally based Big Law firm to another, Philadelphia recruiters explained. The firms founded here know who the rainmakers are at home, and for the most part, they want to make sure those people stay on.

"There's not that many folks out there with big books. The ones that are, they're not going anywhere," Philadelphia recruiter Steven Kruza said. He pointed to the 2009 downfall of Wolf Block as a major turning point in that slowdown.

"You had a tremendous amount of lawyers and legal staff suddenly flooding the market," Kruza said, and simultaneously, the Great Recession was taking hold. "It just made Philly screech to a grinding halt."

D'Amore said he disagrees with the idea that Philadelphia firms slowed hiring at home because of saturation. He said saturation in any given market became less of a problem as lawyers became more able to serve a national client base from anywhere in the country. But that also caused non-Pennsylvania firms to consider hiring lawyers in the Pennsylvania market who work with national clients, taking them from locally headquartered firms.

Whatever the reason for slowed growth at home, recruiters agreed that Philadelphia firms have instead been investing in markets where they can charge higher rates and increase profits.

"It's not all about Philadelphia. It's about where I can serve my clients," Abelson said. And as they looked to those other markets, she noted, some have simultaneously shed "dead weight" to keep their numbers up and stay competitive in the recruiting game.

Asked about head count declines in their founding locations, firm leaders were quick to defend their commitment to Pennsylvania.

Grant Palmer, managing partner and CEO of Blank Rome, said 2011 was somewhat of a "high-water mark" for his firm's Philadelphia office, and that the firm has and plans to maintain "a robustly full-service office" in Philadelphia with some modest growth. He noted that Philadelphia's lateral market has slowed in general, and that his firm has been focused on lateral hiring in New York, Chicago and Los Angeles in particular. Still, he said, Philadelphia remains Blank Rome's biggest office by head count and revenue.

Tom Gallagher, chair of the executive committee at Pepper Hamilton, asked about the firm's head count decline in Philadelphia, said in a statement: "We have long taken exception to the fixation on head count and its presumption that it is the reliable indicator of a firm's financial health." He also noted that Pepper Hamilton has been focused on growing its revenue per lawyer, and reached a record level for that metric last year.

Drinker Biddle and Dechert did not respond to requests for comment on their Philadelphia head counts.

To the west, all four of the Big Law firms founded in Pittsburgh—Buchanan Ingersoll & Rooney, Eckert Seamans Cherin & Mellott, K&L Gates and Reed Smith—saw double-digit declines in their Pittsburgh head count from 2011 to 2019.

"I don't think they're intentionally shrinking, but they're not growing here because they need the clients who can pay higher rates," Pittsburgh-area legal recruiter Valerie Esposito said. She noted that some midsize firms in the city have been much more bullish about the local market.

Reed Smith's Pittsburgh head count went from 183 to 123. At K&L Gates, the Pittsburgh office went from 203 to 159 lawyers. Eckert Seamans and Buchanan each had 22 fewer Pittsburgh lawyers in 2019 than they had in 2011.

Casey Ryan, global head of legal personnel for Reed Smith, said in a statement that the firm's global solutions center is in Pittsburgh as well, and now has a team of over 400 people. She said Pennsylvania is a significant market for the firm, and "our focus is on ensuring critical mass in Pennsylvania and other key regions around the world."

"We operate across practices and geographies and build the best teams based on our clients' needs, irrespective of location," Ryan added, noting that the firm continues to have major institutional clients based in Pennsylvania, for whom "we continue to service their global businesses."

A spokesman for K&L Gates said in a statement that the Pittsburgh office continues to be "integral" to the firm's direction. "Consistent with K&L Gates' overall approach, the focus on developing and growing opportunities for efficient client service in Pittsburgh has not been on head count for the sake of head count growth. Rather, it has been on positioning the office to serve evolving and increasingly far-reaching client needs in the efficient, high value and quality ways that clients demand in Pittsburgh, and across borders and practice areas," he said.

Eckert Seamans and Buchanan did not respond to requests for comment on their Pittsburgh head count.

A few Philadelphia names—Blank Rome, Cozen O'Connor and Saul Ewing—established their Pittsburgh practices after 2011, sometimes taking from the Steel City's native firms. Those firms continue to pursue growth opportunities in Pittsburgh, Esposito said.

In addition to the large out-of-state firms that have established or grown their Pennsylvania presence since 2011, some midsize firms have been growing too—the 57 law firms with lawyer head count of 30 to 160 have seen a net gain of 166 Pennsylvania attorneys since 2011.

Contributing to that net gain was major growth in the state by several local firms, including Babst Calland Clements Zomnir, Burns White, Barley Snyder and Cipriani & Werner. Each of them has increased Pennsylvania head count by 39 or more lawyers. Of the 57 midsize firms, 33 saw Pennsylvania head count increase from 2011 to 2019.

"They have such flexibility in rates that they've been able to capture a client base or part of the market that maybe would fall away from some of the largest national firms," Esposito said.

But some other local midsize firms have followed the same shrinking pattern as their Big Law peers within their home state. They include Schnader Harrison Segal & Lewis, Montgomery McCracken Walker & Rhoads, Pietragallo Gordon Alfano Bosick & Raspanti and Swartz Campbell.

Others, like Rhoads & Sinon, Powell Trachtman Logan Carrle & Lombardo and Nelson Brown, disbanded and closed.

National and International Sprawl

Despite steady or shrinking numbers in their home offices, many of Pennsylvania's Big Law firms saw their numbers grow dramatically in the last decade. So where is that happening?

The Midwest was a major growth region for several of them.

In Chicago, Saul Ewing added nearly 70 lawyers there from 2011 to 2019, Morgan Lewis brought on 49, Fox Rothschild gained 30, Cozen O'Connor added 20 and Dechert brought on 13. In Minneapolis, Ballard Spahr added over 80 lawyers, Fox Rothschild more than 60 and Cozen O'Connor more than 20.

The Pennsylvania firms together added more than 300 lawyers in New York. Leading the pack there was Morgan Lewis, which added 106 New York lawyers. Dechert brought on 62 more New York lawyers, Fox Rothschild added 40, Drinker Biddle 27, Ballard Spahr 26 and still others added to their New York head counts by double-digit numbers.

And the data, pulled from ALM's 2019 NLJ 500 report, doesn't reflect Duane Morris' recent New York addition. As firm chairman Matthew Taylor put it in a recent interview, "in the Am Law 100, to be strong, you need to be strong in New York."

Morgan Lewis, Blank Rome, Pepper Hamilton, Fox Rothschild and Drinker Biddle all saw double-digit head count growth in Los Angeles.

In Washington, D.C., Morgan Lewis brought in more than 80, Cozen O'Connor added 45, and Ballard Spahr brought in 36. And in the same city, Blank Rome, Dechert and Fox Rothschild each added more than 20 lawyers.

Morgan Lewis blew up in Boston thanks to the Bingham McCutchen group, adding over 150 lawyers there. And it outpaced other locally founded firms internationally in Shanghai, Singapore and Beijing.

Singapore was also an important destination for Reed Smith, Duane Morris and Dechert.

Elsewhere in the U.S., Fox Rothschild saw growth in Colorado and North Carolina. Reed Smith brought on 54 in Palo Alto, California.

Still, for some firms the shrinking footprint wasn't just at home. Pittsburgh's K&L Gates has in particular, while it grew head count in a few offices, lost significant head count in a number of locations both domestically and internationally over the past few years, including a net loss of 82 partners in 2019 alone, according to an ALM report late last year.

Continued Growth From Pa. Roots

Locally founded Am Law 200 law firms still dominate the top 10 of The Legal Intelligencer's annual list of the 100 largest law firms in Pennsylvania, and no one is suggesting they plan to abandon those roots.

At both Faegre Drinker and Troutman Pepper, firm leaders said they intend to capitalize on legacy firms' deep connections to certain markets. They just don't see any of those markets as the center of operations.

Morgan Lewis is another example. Much of the firm's growth has been focused outside Pennsylvania and around the globe, and its largest office by number of lawyers is in D.C. But the firm is still investing in Philadelphia—it recently signed a lease on a new tower in its home city, where it will be the only tenant.

But growing outside their headquarters has been a priority for Pennsylvania firms for a while now, recruiters said, simply because there wasn't much room left in the state for any one firm to make great gains. While the two mega-mergers of recent weeks coincidentally came together at the same time, they reflect ambitions that have built up over time, industry watchers noted.

And they all agreed that more deals are likely to come.

"I think it's healthy, I think it's the right move," Kruza said. "And I would not be surprised if other firms follow suit in some way."

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