Delaware’s legal economy still attracts out-of-state law firms
McDermott Will & Emery – which has 1,100 lawyers in 20 locations on three continents – in April opened a new office at the Nemours Building in downtown Wilmington. The expansion marks only the latest case of a large, out-of-state law firm setting up shop in Delaware to take advantage of its high-volume business courts.
Expectations across the legal industry that bankruptcies will pick up in the coming years have also lifted Delaware’s appeal.
“We’ve seen our clients’ need for Delaware counsel grow over the past few years, and a Wilmington office allows us to remain their valued partner regardless of jurisdiction,” said Ira Coleman, chairman of McDermott.
In the short term, that means finding licensed Delaware attorneys with an expertise in patent, bankruptcy, Court of Chancery litigation and intellectual property law. Ashley Robert Altschuler, formerly of DLA Piper’s Wilmington office, is already on board as managing partner.
“We have a number of hires in the pipeline,” said Mike Poulos, partner in charge of strategic growth and development at McDermott. “I think we’d be surprised if we didn’t have 10 to 15 lawyers pretty quickly.”
McDermott follows another large out-of-state firm that came to Delaware in 2019. In January, Connecticut-based Robinson+Cole opened offices in Wilmington and Philadelphia with the goal of expanding its bankruptcy business.
Managing Partner Stephen E. Goldman told the Connecticut Law Tribune at the time that the firm anticipated more bankruptcies in the near future, as the wider economy braces for a downturn.
“The expansion of our bankruptcy practice into larger financial markets has been an important part of our long term strategic plan for some time,” said Goldman in a statement.
Delaware firms have boosted their bankruptcy practices as well. In April, Potter Anderson & Corroon LLP hired two attorneys with a background in bankruptcy litigation, including Christopher M. Samis and L. Katherine Good.
“Bolstering our bankruptcy practice is a long-term strategic priority,” said Potter Anderson Chair Kathleen Furey McDonough in a statement.
The District of Delaware U.S. Bankruptcy Court remains one of the busiest venues in the country, particularly for “mega case filings,” which includes cases that involve $100 million or more, 1000 creditors or more or hold a special public interest.
Some recent mega cases that passed through First State include Jennifer Lopez’s company Fuse Media and Lantern Entertainment, LLC, which acquired The Weinstein Company. Total filings in Delaware increased 13 percent in 2017, according to federal data.
While McDermott noted that Delaware’s bankruptcy court was one reason for the move, it pointed to other advantages as well.
“We were pretty methodical about how we came about reaching the judgement to come to Wilmington,” Poulos said. “It’s one of the leading venues in the country for the filing of patent cases. It continues to be one of the leading venues for the filing of bankruptcies, and it continues to be one of the leading venues for the filing of complex litigation matters.”
One Wilmington-based attorney welcomes the interest from outside firms.
“It’s a sign of how strong our legal economy is in Delaware,” said Chip Connolly of Connolly Gallagher, LLP. “It shows how popular the Delaware judiciary has made practicing in Delaware.”
Connolly, however, puts the recent transplants into perspective, noting that Delaware has attracted out-of-state law firms as far back as when Skadden Arps moved to Delaware 30 years ago. “I think it’s been steady, and I think a lot of the out-of-state firms coming to Delaware are motivated by the bankruptcy practice,” he said.
As for the possibility of losing staff to newcomers, Connolly is banking on maintaining a strong company culture to retain talent. “The day may come when we lose attorneys to an out-of-state firm, but since we came into existence in 2012, we haven’t had that problem,” he said.