Legal market in North Carolina continues to grow

This will be the first in what we plan to be a series of briefs on legal markets throughout the country but those markets viewed from the perspective of contract attorneys.    

As we discussed in our December 15, 2008 posting “Trends in the Market” (click here), the “on shore” legal centers of Atlanta, Charlotte, Chicago, Houston and Indiana continue to grow.  As noted in a recent review of the legal market for 2008 (click here), Charlotte, N.C. and Indianapolis (and Washington, D.C. to a certain extent) continue to be hot expansion markets.   But North Carolina seems to be “the market” for legal work with a steadily growing percentage of contract attorney work.  The recent announcement that Nexsen Pruet had opened a Raleigh office (with former governor Jim Holshouser joining the firm) comes on the heels of Powell Goldstein’s expansion in Charlotte (with veterans from Cadwalader, Wickersham, and Alston & Bird, and the K&L Gates acquisition of Kennedy Covington.   

Each of these firms has a significant component of their practice dedicated to assisting companies to locate, relocate, and expand in this region – – – the source of much of the explosion in legal work.  The recent expansion of Teleflex (click here) and Merchant Distributors (click here) is representative of across-the-board business development throughout the state. 

This trend is reflected in the 32^nd annual United Van Lines Migration Study (click here) which shows the Mid-Atlantic and Western regions the most popular destinations in 2008 for those looking to change their places of residence.  We also note that a large number of Posse List members have relocated (or returned home) to Charlotte and the Research Triangle hub (RTP), which includes Chapel Hill, Durham and Raleigh.   Both Charlotte and the RTP area have provided a constant stream of work for contract attorneys.  Huron Consulting, eMag Solutions, Merrill Corporation, Hudson Legal, Kelly Law Registry, etc. all have document review centers in North Carolina, with a multitude of other e-discovery and staffing agencies having some type of presence there, and still more to come in 2009.  Charlotte’s big financial companies and the wealth of companies in RTP are the client draw, plus the fact that the cost of both space and staff are low.  As we have reported, these lower costs have pulled document review projects out of higher cost centers such as D.C. and NYC.

Last year the Z. Smith Reynolds Foundation (click here) published a series of essays that discussed North Carolina’s infrastructure and the demographic, economic, social and environmental trends that have contributed to North Carolina’s growth.  Among the points made:

1.  The old small-farm, small-factory economy has given way to a statewide economy that has converged substantially with the nation’s economy. In the 1970s and 1980s, the cry went out: “Diversify.” North Carolina took its own advice. The major metropolitan areas now feature diverse economies, with employment relatively balanced among business and industry sectors.

2.  In the half century after World War II, the transformation of North Carolina came not in one or two dramatic strokes, but as an accumulation of sometimes unrelated policies and day-to-day decisions. The transformation resulted from the GI Bill that sent young adults to college who otherwise wouldn’t have done so; from the development of a community college system that provided workforce training; from the collapse of the Jim Crow structure of racial segregation; from the development of Research Triangle Park; from the North Carolina Fund that fought poverty; from the liberalization of banking laws at a time when energetic banking executives were ready to expand; from a persistence in building strong public universities; from the economic forces that undermined the three-legged stool of tobacco, textiles and furniture; and from the development of water, road and airport infrastructures.

3.  North Carolina became a major player in the national banking field. Of the 52 banks licensed to operate in the state, 24 are headquartered in North Carolina including  Bank of America. The banking and finance industry in North Carolina has experienced a skyrocketing growth rate in the last decade, growing by 25.5% since 2002 and at an average of more than 9% per year since 1997.  As of 2006, finance was the third largest economic sector by gross state product in North Carolina, after manufacturing and government.

4.  Due to well-developed economic incentives, the state saw an enormous influx of corporations relocating to the state,  with Charlotte serving as the subsidiary headquarters for many major national and international companies.  During the past ten years, over 8,800 new firms have invested $8.6 billion in new Charlotte facilities.

5.  North Carolina workers became more mobile.  Many North Carolinians adopted “split identities,” meaning they work in one place and live in another.  In more than one-third of the counties, more than 40 percent of workers — almost all of them driving alone in an automobile — go from their home counties to other counties to work. Many of these are residents of rural counties who have turned to the metro areas to replace jobs lost in other fields.

All of this bodes well for future legal work, be it contract/temporary or permanent employment.   Although 2008 was an overall down year, we saw a significant up-tick in projects/positions in North Carolina and we expect to see more this year as we align with several new staffing agencies and e-discovery companies servicing the state, as well as several law firms who will be placing “direct hire” postings with us.