Nashville Has Grabbed the Headlines, but These Under-the-Radar Legal Markets Outpaced in Key Areas

Nashville’s population explosion dating back to 2019 is no surprise to any census watchers, averaging 5% growth annually, four times that of the national average. Those migrating to Music City followed the jobs attributed to rapid business expansion. As it is always a hub for the evergreen healthcare sector, big tech projects from giants like Amazon have flowed recently, further accelerating the development frenzy. Following the economic bustle, soon entered the law firms: a December Law.com article referred to Nashville as a legal “boomtown,” while an Above the Law piece dubbed the city a legal “it” town as far back as 2021. The reasons followed a formula of red-hot commerce in need of lawyers, big firms snapping up little firms to buy into ready-established client relationships, bypassing having to build from the ground up and seizing on a comparatively low corporate tax rate.

Leopard Solutions actively tracks data, which enables users to identify emerging legal markets. Trying to find the “next Nashville” or any other under-the-radar hotbeds of legal work, we compared similar mid-sized cities (looking at size by city limits, which may not reflect suburbs) over three years. We discovered Denver and Portland were outpacing Nashville in net new office growth among all the firms we track, and Denver even eked past Nashville among Am Law 200 firms, with eight new office openings (compared to seven).

Practice Areas Driving Boomtown Growth

Next, we consulted our Laterals by Destination report, powered by Leopard Firmscape to drill down what might be driving expansion into these markets by closely examining the lateral associate, partner, and counsel entrances across practice areas. At their core, law firms are businesses driven by human capital. Client loyalty is often to the individual and not the associated firm, so it is not uncommon for firms to follow talent and pursue business development through strategic recruitment, poaching of entire practice groups, and mergers and acquisitions. Of the three cities, Denver led the way with 1447 lateral moves, followed by Nashville with 900, and Portland trailing a distant third with 608. Looking for commonalities between the three, they all boasted robust Labor & Employment practices- Portland was the only firm where their Labor & Employment lateral moves (77) exceeded their corporate moves (59). Counter-cyclical practice areas such as Labor have thrived in recent years due to the high inflation that hindered traditional growth sectors. Portland and Denver also saw heightened environment practice movement relative to other cities, 35 and 12, respectively. After years of false starts, environmental law is positioned to reap the benefits of Biden’s infrastructure plan which is set to ramp up along with the correlated regulatory compliance measures that require lawyering. Denver and Portland also benefited from Intellectual Property (IP) churn, with 100 moving to the former and 20 to the latter. As artificial intelligence moves toward rapid adoption, particularly in Portland, which several prominent semiconductor manufacturers call home, the need to protect proprietary source code will only increase. Trending practice areas and cost-cutting aside, firms are also following talent migration patterns as there has been noted flight from more significant markets amongst young professionals in the post-pandemic years.

Finally, we looked into our crystal ball using our Lateral Trend Report, powered by Leopard BI (Business Intelligence), to get a glimpse into the future of the three cities stood with Q2 lateral entrance predictions. Our predictions are derived from a proprietary algorithm that quantifies job opening figures by analyzing the seasonality of employment opportunities and the trajectory of market trends observed in the preceding months, offering a reliable forecast. Denver led the way with almost 64 moves predicted through April and May, three times that of number two Portland (22), followed by Nashville with 21.

When Big Law firms descend upon a mid-size market, they often make their presence felt producing a gentrification-like effect. This often drives up billing rates and makes it more difficult for “mom-and-pop" smaller law firms to compete.