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The puzzle and persistence of biglaw clustering

  • Gregory H. Shill


Elite U.S.-based global law firms (“Biglaw” firms) concentrate in the costliest districts of superstar cities, especially two neighborhoods in Manhattan. This pattern has persisted despite both the dispersal of Biglaw clients across less-dense, lower-cost U.S. geographies and the development of telework capacity. It suggests a puzzle: law is among the occupations most conducive to remote work, yet Biglaw prior to the coronavirus pandemic required in-person work in the priciest places—meaning it paid (and continues to pay) a premium on both of its biggest expenses, wages and real estate. How might this equilibrium be explained, and what might lead it to change? This Article contends that Biglaw clustering reflects a management preference for the exploitation of proven strategies over the exploration of novel and uncertain ones—but that the pandemic telework experience is eroding this dichotomy. This analysis has direct implications for private international law (“PIL”) practice, where large-scale transactions and disputes are handled by Biglaw firms and involve significant international travel. This Article contributes to a growing literature on telework’s impacts on cities, labor markets, and industries, and is the first to extend that focus to Biglaw and PIL. A post-pandemic Biglaw embrace of dispersal via telework would destabilize standard accounts of collaboration in agglomeration economies. While the Article expresses skepticism about that outcome, it identifies a mechanism by which it might plausibly come about. Crucially, this mechanism—the replacement of an exploit vs. explore choice with two different exploit options—posits as the key driver not technology but management learning and innovation that quickened during the pandemic.

* Associate Professor, University of Iowa College of Law. My thanks to Kevin Baum, Perry Dane, Kevin Davis, Arpit Gupta, William Henderson, Sarah Bertozzi Kessler, Alon Klement, Daniel Klerman, Christopher Odinet, Erin O’Hara O’Connor, Jason Rantanen, César Rosado Marzán, Sharon Shakargy, Sean P. Sullivan, Christopher Whytock, and participants of the Iowa Law Summer Faculty Workshop and the Theoretical Inquiries in Law Symposium “The Global Law Market,” at Tel Aviv University, for which this Article was prepared. I wish to express my deep appreciation to Professors Klement and Klerman for organizing the symposium, to Professor Henderson for serving as a discussant, and to the journal editors for their detailed, thoughtful comments. I am grateful to Blessing Adewale, Anthony Gentile, and Brian Keogh for research assistance. Any errors are mine alone. Cite as: Gregory H. Shill, The Puzzle and Persistence of Biglaw Clustering, 23 Theoretical Inquiries L. 191 (2022).

Published Online: 2022-02-01
Published in Print: 2022-02-23

© 2022 by Theoretical Inquiries in Law

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