Practicing Law in California
Thinking of making a move to California?
There is more to California than Hollywood, Disneyland, and the beach. If you are contemplating relocating to the Golden State, the following is an overview of economic considerations, the five major legal markets, and hot (and not) areas of practice here.
Can you afford to live here?
Housing Price Comparison
Other than passing the CA Bar Exam, the largest obstacle to relocating to California is the high cost of housing. Recent figures show that four of the five most expensive markets for existing single family homes are in California. But, the figures on this chart are misleading. Prices actually are much higher in major metropolitan areas—the places where you most likely want to live. You can easily expect to pay close to $1 million or more for your first house.
Most Expensive U.S. Cities for Renters
As a result of the housing market, most single income junior associates still rent. The bottom line is if you want to live close to where you work, it costs a lot of money. Rents in San Francisco and Oakland have risen more quickly than just about anywhere in the country.
(Zumper, February 2018)
NALP Buying Power Index - Class of 2014
New York remains the most expensive city in the U.S. according to NALP’s most recent report, but many California cities are not far behind. The cost of gas is significantly higher (over $.50/gallon) in CA than in other states. While SF is the only major CA city where public transportation is widely available, Los Angeles’ expanding Metro Rail system is attracting an increasing number of riders. Los Angeles, however, continues to offer associates more purchasing power than the identical salary in San Francisco. Economics aside, the Harris Poll Survey ranked CA as the most popular state US adults would choose to live in, if they could live in any state outside of their own.
|City||Salary Required to Yield NYC Buying Power|
(Numbeo, March 2018)
Where in California do you want to live?
There are over 180,000 active attorneys in California; 45% are in LA area; approximately 30% in the Bay area. A recent study claims California has the second-highest oversupply of lawyers after New York.
The major Southern California law firm markets break down into Los Angeles, Orange County and San Diego. In Northern California, there are two distinct markets: San Francisco and Silicon Valley. The major cities in Silicon Valley are Menlo Park in the north, and Mountain View, Palo Alto, and San Jose in the South. San Francisco firms tend to have the more traditional practices, while Silicon Valley is centered around technology.
Largest Los Angeles Firms
In Los Angeles there are the three distinct centers for law firms – Downtown, Century City and Santa Monica, which has recently been dubbed Silicon Beach because of the growth of the tech industry there. Tech and media companies, accelerators and incubators, investors and law firms, have set up offices along the three mile stretch from Santa Monica to Venice and Playa Vista. Google, Facebook, YouTube, and Microsoft have set up campuses, as have Snapchat and incubators like Amplify LA, and the lawyers are following. New in LA is the burgeoning tech scene downtown. By one venture capital’s firm count, there are now 78 tech-oriented companies in downtown LA. The tech companies focus on entertainment, gaming, cloud-based e-commerce, online ad technology, and social networking. In fact, Los Angeles is ranked third, behind Silicon Valley and Tel Aviv, as a start-up ecosystem. Among the 50 biggest law firms in California, 45 have offices in LA.
|5||Latham & Watkins||229|
Firm Prospects, March 2018
Largest Orange County Firms
Orange County is only 50 miles from Los Angeles, though it could take two hours in traffic. In many respects it is an extension of LA, although there are some major indigenous firms. In Orange County, the major firms are in Newport Beach, Costa Mesa and Irvine—all near the coast. In the AmLaw mid-level associate survey, Orange County had the most satisfied mid-level associates in general.
|2||Rutan & Tucker||135|
|5||Latham & Watkins||70|
|7||Snell & Wilmer||66|
Firm Prospects, March 2018
Largest San Diego Firms
San Diego was AmLaw mid-level associate survey’s second highest scoring market. Another survey cited San Diego for its growing number of female and non-white attorneys. Lawyer opportunities in San Diego are increasing but still are less than one would expect from a city the size of 1.3 million people. Of the National Law Journal Top 350 firms, only 1% of those lawyers are located in San Diego because, although San Diego is a good place for start-ups, there are only a handful of large, homegrown companies that can support big firm rates. Some law firms have two offices in the greater San Diego area—in downtown and in North County where many of the tech companies are headquartered. However, last year, two national firms closed their San Diego branch offices. It’s interesting to note that over half of the largest firms in Orange County and San Diego are branch offices of firms headquartered elsewhere.
|4||Gordon & Rees||103|
|7||Latham & Watkins||86|
Firm Prospects, March 2018
Largest San Francisco Firms
Only two of the largest San Francisco offices have over 200 attorneys. With the exception of Hanson Bridgett and Farella Braun, all of the top ten law firms have offices in Southern California. It's interesting to note that a number of firms have closed their San Francisco offices and consolidated in their Silicon Valley offices.
|1||Morrison & Foerster||229|
|5||Kirkland & Ellis||124|
|7||Gordon & Rees||119|
|9||Latham & Watkins||116|
Firm Prospects, March 2018
Largest Silicon Valley Firms
Wilson Sonsini's Silicon Valley office is the biggest single office in the state and is a national leader in venture finance. Cooley is a top firm for advising on IPOs. Of the firms on this list, Fenwick is the only one that does not have an office in Southern California. Silicon Valley’s economy is booming, and the area continues to be a very popular site for firms to open new branch offices because of the hot tech/IP market.
|2||Fenwick & West||202|
|5||Latham & Watkins||98|
Firm Prospects, March 2018
What Areas of Practice are Hot in California?
Hot practice areas change and depend upon a variety of factors such as the economy, new laws, technology changes, and the social and political climate.
Click icons below to see our current searches for those practice areas.
Hot: Intellectual Property, Corporate, Litigation
- Intellectual PropertyCalifornia has more new patent activity than any state or country with the exception of Japan. Patent litigation cases filed in 2015 were up 15%. About 9% of these cases were filed in California.
California has several recognized “hot spots” in the IP world, such as stem cell research and biotech in Silicon Valley and San Diego; computer hardware and software in Silicon Valley; and entertainment and internet content licensing in Los Angeles. A number of Los Angeles firms now have video game practices, representing game publishers, developers, advertisers and outside investors. These practices also deal with new issues and business models presented by the multiplayer online games and games played on mobile devices and social networking sites. Some California firms have also formed fashion industry practice groups—a multidisciplinary practice but often fueled by IP issues.
- CorporateCorporate work has picked up the past couple of years—particularly with IPO’s (like Twitter and Go-Pro) in Northern California/Silicon Valley. IPO activity was down in 2015 from the previous year, leaving Silicon Valley deal lawyers focused on secondary offerings, private financings, and mergers and acquisitions. California generally has more of a middle market focus compared to New York.
- LitigationLitigation in California has declined over the past several years while, previously, it had always been “hot”. The high cost of going to trial is driving companies to settle cases earlier and use Alternative Dispute Resolution. A new trend is that lawyers are leaving big firms and opening litigation boutiques to offer more cost-effective services.
Warm: Real Estate, Employment, Banking/Finance
- Real EstateAll areas of real estate practice significantly picked up over the past few years. This practice tends to be cyclical with the economy; thus, the demand for real estate attorneys tends to be volatile. Real estate practice in California includes new development projects, real estate finance, purchase and sale, leasing, and a vast complex of government regulations on the use of land.
- EmploymentEmployment law held steady for the past few years. California labor law is constantly in flux and the state is recognized for being at the forefront of employment law developments.
- Banking/Financial ServicesThis area is beyond cold—it is frigid. Consolidation in the industry and the trend of corporate headquarters moving out of state have reduced bank regulatory work in California. Law firms with strong reputations in bank finance are doing a mix of new lending and restructuring troubled loans.
Cold: Environmental/Energy, Bankruptcy, Tax, International
- Environmental/EnergyCalifornia continues to be a trailblazer in environmental and alternative energy law. Some of the largest green tech/alternative energy deals have come out of California.
- Bankruptcy/RestructuringEven when the economy was bad, bankruptcy was relatively weak in California because most of the major business bankruptcies were filed in Delaware and New York.
- TaxBiglaw tax practice usually is an adjunct to the real estate and corporate practices. We see tax jobs as a leading economic indicator—it's the first area to evaporate when there’s a slowdown in deals and the last to bounce back. Some of the recent demand involves employee benefits and executive compensation due to the uptick in M&A deals, mostly in the Bay Area.
- InternationalUnlike New York and Washington D.C., California is not a hot-bed of international law. In Southern California, there is some work directed toward Mexico, Central and Latin America; Asian work is done in Los Angeles and San Francisco, but there is not much European work here at all. A number of firms are forming Cuba practices, but not based in their California offices.
Because so many firms now have international offices, work previously done in the states now is handled abroad. For example, in 2012, when US firms were finally allowed to open offices in Korea, a number of firms jumped on that opportunity. Instead of opening branch offices, some US firms merged with foreign firms, such as Dentons, which combined with Asia’s largest firm resulting in a 7,300 lawyer behemoth.
New Practice Areas
There’s a growing demand for privacy and data/cyber security expertise, partly due to the Federal Trade Commission’s recent emphasis on data breaches that expose consumer data as well as due to other recent events in the news. Other potential hot areas are the internet of things, supply chain management, fintech, food and beverage, bitcoin, space law, social media, and drone practices. Recently a few firms started cannabis practice groups, given the recent change in California law.
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