Making it in New York: A Reminder that Manhattan is an Island

The percentage of AmLaw 200 firms with an office in New York is?  65%, with, according to The American Lawyer, more wannabe immigrants to New York in the wings.  

New York has always been known for two superficially contradictory, but I devoutly believe fundamentally compatible, characteristics:  A wide welcome mat for immigrants (fully 40% of the residents of the five boroughs foreign-born as of the 2000 Census, the highest since 1910), as well as the "you should live so long" challenge immortalized in "if you can make it there, you can make it anywhere."  (A few readers responded to my recent survey by taking me to task for writing too much about New York City, which I readily cop to having a life-long love affair with, but trust me, this time it matters to your firm.)

Now we have The American Lawyer devoting an issue to a special report on firms, domestic and foreign, wanting to set up shop in New York, why they aspire to do so, the obstacles they encounter and successes they enjoy, and the enormous variety of strategies they engage.  For example, you can:

• buy a mid-size firm in whole—but at this point in the market's evolution there aren't many, or many worth having, left;
• cherry-pick lateral partners—an increasingly expensive and fraught strategy (Aric Press, editor-in-chief of "TAL," jokes that "We may have finally found the one market where there aren't enough lawyers to go around");
• try to move in with one marquee name-brand partner—as Bracewell & Patterson did when it morphed into Bracewell & Giuliani; or
• arrive as countless fresh-faced college grads and aspiring actors and writers do, off the bus as it were, looking for your 7,500 square feet on Park Avenue and trusting in the luck of the draw.

Why do firms do this? 

"Any firm with global ambitions must have a presence in New York. "Without one," says O'Melveny & Myers chair A.B. Culvahouse, Jr., articulating a widely held sentiment, "it just doesn't work.""  and this:

"If you don't come here, you cap out," says Kenneth Bezozo, the tax partner who uprooted his entire life in Dallas to open Haynes and Boone's Manhattan office in 2004.

How to crack the market, then?  According to TAL:

1. Pick your practice expertise and decide on the scope of your "playing field."
2. Come with clients, or be prepared to buy some.
3. Get lucky, or make your own luck.
4. Have a long-term vision.

Having read and re-read the article—and as a strong admirer of TAL for lo these many years—something's missing; I'm not confident this is the whole story.  Or rather, it is a series of individual stories with diverse endings  but no common theme.  In retrospect, some firms made it big (Latham & Watkins) and others haven't; Bingham McCutchen chairman Jay Zimmerman concedes it's been difficult to establish a beach-head in Manhattan because of the intense competition for desirable laterals:  "You get your fair share, but it can be frustrating."

Latham clearly came with a vision of taking market share away from firms such as the four horsemen of Cravath, Davis-Polk, Shearman & Sterling, and S&C.   Quite remarkably, they've succeeded, in part through serendipitous ties to Michael Milken and Drexel at the height of the junk bond boom, and to the diaspora of Drexel alum's following that firm's implosion.  To duplicate this strategy, you merely need to identify and hitch yourself to the next departing rocket.  Other firms (Greenberg Traurig, Sonnenschein) pointedly do not compete in the bulge bracket, an eminently manageable and sensible strategy.  Finally, others still come on a wing and a prayer.

The allure is unquestionable, but the odds of hitting it very big have never been longer.  Even Latham has taken 20 years to get to where it is.  Then again, markets can change profoundly over 20-year periods.  Who's to say that even the four horsemen themselves will survive with their current marquee status?  The line forms to the left.