Big Law Heeds Siren Call of the South to Banking, Healthcare Hub

North Carolina is luring Big Law firms vying for structured finance and private credit work in the state’s largest city and banking center.

Orrick Herrington & Sutcliffe announced a new Charlotte office on Monday, three weeks after Proskauer Rose launched an outpost in the city. The ventures are boosted by recruits from Wall Street’s Cadwalader Wickersham & Taft, known for deep expertise in structured finance and one of the first large outside law firms to move into the city in the 1990s.

The firms described their new offices as bids for work across a range of finance, capital markets, and related transactions. The fast growing city, long home to Bank of America, has more recently seen an influx of financial industry players.

“We want to be representing banks, we want be representing non-bank institutions,” said Nathan Spanheimer, an Orrick partner who joined the firm from Cadwalader. Orrick is targeting “anyone who’s deploying capital in a debt form, whether that’s through a loan, through a structured product, or through a securitization,” he said.

Proskauer’s new office seeks to deepen the firm’s offerings for clients in fund finance and private credit, according to Ron Lovelace, a deals partner who joined from Cadwalader last month. Lovelace, who was the head of his former firm’s leveraged finance group, has worked on deals involving JPMorgan Case & Co., among other clients.

Manhattan’s Proskauer and Orrick, which was founded in San Francisco, are starting with a handful of lawyers in the city. They may have trouble generating enough high-end work to justify large expansions, according to North Carolina legal recruiter Jordan Abshire.

“I’m confident that the office will be growing past the leverage finance team, but I suspect that Proskauer will find it somewhat challenging to find many practices that are compatible from a rate and profit perspective,” he said.

Beyond Banking

Big Law firms flocked to Charlotte starting in the 1990s.

Cadwalader and Mayer Brown, which each have 80-plus lawyers in their local offices, were among the early adapters. Big Law’s Winston & Strawn and Seyfarth recently added finance and private credit partners in Charlotte.

Firms are chasing clients, like financial institutions, insurance companies, and private equity funds, according to Major Lindsey & Africa recruiter Craig Donaldson.

“Charlotte is a bedrock of activity in terms of transactions and deals,” Donaldson said.

Orrick’s Charlotte office is “a strategic play” to set the firm up as “a sell-side heavyweight in the private credit space, able to counter sponsor-side giants, like Latham and Kirkland,” Abshire said.

Newcomers also are capitalizing on the state’s healthcare and real estate ties in pockets outside the Charlotte area. Durham and Raleigh are attracting more mid-sized firms looking to seize an edge in the market.

Barnes & Thornburg opened an office in tech-heavy Raleigh in 2019, largely seeking to take on intellectual property matters. Now the firm is looking to pad the office’s M&A and private equity, litigation, and healthcare offerings, according to Andrew Detherage, its managing partner.

The growth and development from population to technology made the southeast a prime expansion spot for the firm, Detherage said.

“I look at the Raleigh-Durham research triangle as an emerging market,” Detherage said.

The Livin’ Is Easy

The area is attractive for lawyers who want to work on sophisticated matters in a state with a lower cost of living, according to recruiters.

“There’s a great talent pool of lawyers and professionals coming out of the law schools and universities feeding that market,” Macrae recruiter Rachel Nonaka said. “On top of that, you’ve got favorable corporate conditions with lower tax rates and real estate.”

The pay scale for associates in Charlotte generally is a few notches down from the rates in New York, San Francisco, and other cities. But the money goes farther for associates and partners based in North Carolina than their counterparts elsewhere.

“It’s becoming more attractive in terms of attracting talent,” Donaldson said.