What's Wrong with a One-Company Town?

What's the biggest challenge for a Washington, DC-based firm that wants to grow?  The lack of any meaningful transactional practice in their own backyard.  To be sure, regulatory, antitrust, and litigation work are strong, but a claim to national, much less international, status is an empty one without serious corporate throw-weight.

The options, then, for breaking out of the DC sandbox are few:

• merge with a national, or at least a New York or California, corporate power-house (this was the Wilmer-Cutler/Hale & Dorr strategy, slightly exceptional only because Hale & Dorr was a Boston-based tech heavyweight rather than a Bay Area tech heavyweight);
• grow a transactional practice organically from within, primarily by opening branch offices where such work can actually be found (the Hogan & Hartson model); or
• admit that governmental relations, regulatory and antitrust work, are your "core competence" and open up in Brussels, headquarters of the EU (Arnold & Porter).

Interestingly, while the Americans have had some success establishing beach-heads in Brussels, the Brits have by and large been forced to retreat after mounting forays into DC.  The article doesn't speculate on why that may be, but a possible reason, and one that stays away from invidious comparisons about entrepreneurial competence, is simply that Brussels is a new and relatively open playing field, whereas Washington is a mature and well-populated market with no self-evident need for new entrants.

The need, however, to break out of the one-company town of Washington, appears pressing to some firms:  Although DC-based firms' revenue was up 8% on average over last year, the AmLaw 100 as a whole were up 10%—with the inevitable arithmetic implication that non-DC-based firms' revenue rose even more.