Location, Location, Location

Is geography destiny?  It is if you believe that Philadelphia is "the worst legal market" in the country.  Sandwiched between New York and Washington, DC, without indigenous investment or commercial banks of any size, and with a high-taxation, business-hostile climate, its AmLaw 200 member firms' profits per partner ($431,000) pale besides the comparable firms headquartered in New York ($1.37-million), Washington ($846,000), and Boston ($697,000).

In a somewhat opaque digression, the article implies that the five "growth happy" firms (+49% in headcount over the past 5 years) have adopted the wrong strategy, since their PPP is up 42% over the same period, while the more conservative firms (+21% in five-year headcount) have seen their PPP grow 52%.  Although tempting, I'm reserving judgment (the "Scottish verdict," of "not proven").  Too small a sample size over arguably a very anomalous five year period.  Conclusions such as this can only be legitimized across more firms and longer periods.

To be sure, there are some local industry opportunities, including pharmaceuticals, biotech, and a bit of financial services, but it's clear the Philadelphia legal community is on the defensive in reaction to this article.  The most common line of attack is that Morgan-Lewis and Dechert, two highly profitable firms with Philadelphia roots, were classified as "national" rather than "Philadelphia"-based, thus depriving Philadelphia of a pair of nice upward-skewing profits per partner numbers. 

As for Morgan Lewis, I think the "national" moniker is fair.  New York, Philadelphia, and Washington each have "more than 250 [Morgan-Lewis] lawyers" according to the firm's website, so it's hard to say the center of gravity remains on the Schuylkill.  As for Dechert, that's a closer call:  There, the lawyer headcounts are 247 (Phila.), 102 (NYC), and 59 (DC).  To be sure, Dechert aspires to the "national" categorization (their website bold-faces, "international," in fact), and I think the "national" characterization is fair:  They do total over 700 lawyers across 17 offices.

Bottom line:  Counting Morgan-Lewis and Dechert as "non-" Philadelphia is certainly fair.

Not fair—indeed positively laughable—is the counterattck that "Skadden, Wachtel, and Cravath" should not be deemed New York firms.  Wachtel, let it be stated for the record, has one office in the world:  Here.  Cravath has two:  Here, and London.  Skadden is the only semi-marginal case, a truly international firm.  But their psychic, financial, and business center-of-gravity is hard in Times Square.

The question remains what a Philadelphia firm aspiring to more should do.  My suggestion:  An intra-city merger.  Bulk up, proceed to cost-cut and slim down, and get some people's attention.  After that, one could always be acquired....