We use one of the highest resolution cosmological SPH simulations to date to demonstrate that gaseous clouds form around Milky Way size galaxies. We further explore mechanisms responsible for their formation and show that a large fraction of clouds originate as a consequence of late-time filamentary cold mode accretion. Here, filaments that are still colder and denser than the surrounding halo gas, are not able to connect directly to galaxies, as they do at high redshift, but are instead susceptible to the combined action of cooling and Rayleigh-Taylor instabilities at intermediate radii within the halo leading to the production of cold, dense pressure-confined clouds, without an associated dark matter component. This process is aided through the compression of the incoming filaments by the hot halo gas and expanding shocks during the halo buildup. Our mechanism directly seeds clouds from gas with substantial local overdensity, unlike in previous models, and provides a channel for the origin of cloud complexes. These clouds can later rain onto galaxies, delivering fuel for star formation. Owing to the relatively large cross section of filaments and the net angular momentum carried by the gas, the clouds will be distributed in a modestly flattened region around a galaxy.