My friend Professor Bill
Henderson of Indiana University Law School/Bloomington
continues his fascinating empirical research into the legal profession
with a
new piece which analyzes, over the past 20 years, the geographic
migration of large law firms and their lawyers vis-a-vis the migration
of the Fortune 500.

Before we get to the data, I want to give you a chance to hypothesize
about what it will show.  The migration of Fortune 500 headquarters
has been…?  Indeed, largely from the Northeast and Midwest
to the Southeast and Southwest.  But the migration of AmLaw
100 firms—and their concentration of lawyers by headcount,
which is actually the statistic of greatest interest—is perhaps
not so intuitive to divine.

In reviewing academic and popular literature on geographic factors
and trends, one is immediately struck (certainly Bill was) by the
ink spilled over the subject of "Global Cities" or "World Cities."  They
are, in short, centers of international business and finance.  What
makes a city "Global?"  Researchers obviously have
their different methodologies (airline links, concentration of banks
and securities firms, etc.), but one that all agree is non-negotiable
for a city to qualify is a high concentration of sophisticated service
providers:  Accountants, advertising executives, investment
bankers, management consultants, and lawyers.

Bill theorizes that the two "primary drivers affecting the  geographic
growth patterns of large U.S. law firms" are what he calls "Follow
the Client," and "Follow the Lawyer." 

I happen to agree, as these coincide with the demand (client) side
of the law business and the supply (lawyer) side.   AmLaw
firms will "follow the client" by migrating to the Southeast, Rocky
Mountains, and Southwest.  But by the same token, clients will
"follow the lawyer" by selecting high-end legal services from providers
in Global Cities, when the last word in sophistication is called
for.  In the US, says Bill, that means New York, Chicago, Washington,
DC, San Francisco, and Los Angeles—with New York "always number
one."

Finally, the irrepressible quant in Bill creates a statistic to
compare the relative regional concentration of AmLaw 200 lawyers
to the relative regional concentration of Fortune 500 firms.  For
lawyers, it’s the region’s percentage of all AmLaw 200 lawyers and
for the Fortune 500 it’s the region’s share of F500 revenue.

And the bottom line is?

Despite the fact that both the Northeast Corridor and the Midwest
have been losing Fortune 500 firms at rougly the same rate, the two
regions diverge sharply when looking at changes in AmLaw 200
lawyer headcount.  As Bill writes, the Northeast Corridor "has
emerged–or consolidated its position as–the center of the large
law firm universe.  Although it accounts for only 30% of the
Fortune 500 revenues, it has 48% of the Am Law 200 lawyers."  And
it’s a strong net "exporter" of legal services, whereas the Southeast
and Southwest are large net "importers" of legal services.

Coincidentally, Fortune just
came out with its "Global 500" for 2006, which aside
from ranking companies, interestingly, ranks cities by number of Global
500 firms headquartered there, and shows total annual revenue of those
firms as well.  Here
are the top 5, although I’d actually argue the first four are in "a
league of their own," given the more than 50% dropoff between #4 and
#5:

Lastly, for fun, Fortune mapped cities into visual size-by-revenue
charts, which gives us the US, the UK, Germany/Italy, and Japan.  (Countries
are not to the same scale.)

Are you looking at the face of the future distribution
of your firm’s lawyers?