The changing economic geography of large U.S. law firms

Abstract

The number of lawyers working for large U.S. law firms has increased dramatically. One important manifestation of this is the growing network of branch offices. Informed by three theories of spatial change—law firms (i) following the geographic expansion of their clients, relying on (ii) traditional agglomeration economies and relying on (iii) agglomeration benefits emerging from a location’s connectivity to other important geographies—we analyze longitudinal data on large U.S. law firms and the global urban network in which they are embedded. We find that, after the late 2000s, geographic expansion was less connected to organic market growth in U.S. domestic markets and London, a plausible explanation being the global financial crisis. At the same time, growth has continued in key foreign markets. We demonstrate how network analysis and a relational approach to organizations and organizational fields can yield insights into the structure and dynamics of industries.