Tech, Meds Buoy Pittsburgh's Legal Profile As Gas Boom Fades
Published in Law360 May 11, 2017
By Matt Fair
While an anemic natural gas market has slowed the energy boom that began luring out-of-town law firms to Pittsburgh at the start of the decade, legal leaders say that a generally robust economy driven by the health care and technology sectors continues to make the city an attractive destination for newcomers to plant their flags.
Philadelphia-based Cozen O'Connor PC became the latest firm to expand into Pittsburgh as it announced earlier this month that it had taken on a trio of attorneys from the upper ranks of Buchanan Ingersoll & Rooney PC in the employment, corporate governance and long-term care litigation spheres.
Michael Heller, Cozen's president and CEO, told Law360 on Wednesday that the city was an attractive destination for the firm thanks to the business opportunities created by its expanding health care systems and a panoply of highly regarded research universities — the so-called "eds and meds."
"It's clear that Pittsburgh has really gone through a renaissance in the last few years that it's still right in the middle of," he said. "That's being led by all the great things being done by the eds and meds."
The continued interest in Pittsburgh comes even as a predicted energy boom that first began luring firms to the city in recent years has cooled because of a protracted dip in natural gas prices.
"There was this thought that lots of firms, whether they were from Pennsylvania or Texas, anticipated the energy boom that was about to happen because of the Marcellus Shale play, and that was the original impetus for it," said Charles Kelly, co-managing partner of the outpost Saul Ewing LLP launched in Pittsburgh five years ago.
Since then, however, Pittsburgh has emerged as a tech hub as companies like Uber Technologies Inc., Google Inc.,/a> and Facebook Inc. have all opened offices in the area.
Uber has used the city as a testing group for a fleet of driverless vehicles, which can often be seen cruising downtown streets. Google employs hundreds of engineers and product managers in the city's Larimer neighborhood specializing in computer systems and networking. And Facebook announced last year that it was opening an office in Pittsburgh focusing on research for its virtual reality platform.
Meanwhile, the University of Pittsburgh Medical Center — which bills itself as the largest nongovernmental employer in the state — has continued to aggressively expand in recent years with the acquisition of new hospitals and health systems.
"You think energy first, but then you arrive and say, 'Wow,'" Kelly said.
Melaine Shannon Rothey, a senior attorney with Jones Gregg Creehan & Gerace LLP and president of the Allegheny County Bar Association, agreed that a generally robust regional economy was attracting new law firms to the region.
"It's not really all that surprising," she said. "With the influx of new business coming in, there's much more work available, especially in labor and employment law and construction law because there's a lot more building going on."
But some non-native firms that have limited their presence in Pittsburgh solely to serving the energy sector have not fared well as natural gas prices have sunk. The former Fulbright & Jaworski LLP, now known as Norton Rose Fulbright,, launched an office just outside the city in April 2011 with a team of environmental and energy lawyers snagged from K&L Gates LLP, but the firm announced in January that it was shuttering the outpost.
The now-shuttered Burleson LLP also announced in October 2015 that it was shedding a group of six attorneys, including a managing partner, from the Pittsburgh office that it opened in 2009.
The cutbacks came as title work related to the Marcellus Shale play dried up thanks to the decline in energy prices. Firm leaders told Law360 at the time that about half of Burleson's practice in Pittsburgh was devoted to title work.
George Medved, the administrative partner of the office Blank Rome LLP opened in the city in January 2015, said that firms like Norton Rose had failed to take advantage of the full panoply of opportunities that Pittsburgh offers.
"They're a very good firm, but they had a choice," he said. "They could have made it a full-service operation, or they could have kept it simply as an energy play. They decided they were just going to keep it as an energy play, and then what happens is the market takes a nosedive, and you've got a problem."
He said this had also ultimately doomed Burleson.
"They had 40 lawyers, and then all of a sudden one day, it vaporized," he said.
While a drop in natural gas prices helped take the sheen off the legal industry's embrace of Pittsburgh as an engine for energy-related work, there are significant signs that the sector is beginning to bounce back in a meaningful way.
The biggest example: a Royal Dutch Shell PLC unit's commitment last June to build a massive ethane cracking facility in Beaver County in western Pennsylvania. Medved said that downstream operations like Shell's proposed processing facility, as well as the development of midstream pipeline capacity, were giving a new glimmer to the depressed energy market.
"Everybody thinks, in the long term, that it's a viable play," he said.
But as the energy market fluctuates, Medved and Kelly stressed that it is important for firms to diversify and that Pittsburgh offered ample opportunity to do so.
"If you came here for one play only, this probably isn't the place to be," Kelly said.
Cozen O'Connor seems to be taking that advice as it begins to fill out its office in Pittsburgh.
Taking the lead in launching Cozen O'Connor's new outpost in western Pennsylvania are Thomas Giotto, who served as chair of Buchanan Ingersoll's labor and employment section; Jeremy Garvey, who served as co-chair of Buchanan Ingersoll's corporation section; and Gene Giotto, who served as co-chair of Buchanan Ingersoll's post-acute and long-term care practice group, the firm said in a statement last Wednesday.
Cozen O'Connor followed up its initial announcement with news that it was adding another six attorneys to the Pittsburgh office from the ranks of Buchanan Ingersoll. Four will join the labor and employment group now operating out of the firm's new Pittsburgh outpost, one will join the commercial litigation department, and another will join the corporate practice group.
"We looked at Pittsburgh as a chance to continue fulfilling elements of our strategic plan, and that's to have a strong presence in cities with a great legal community," Heller said. "We're looking to Pittsburgh as a much broader, full-service office than one that would only have a limited number of practice groups."
--Additional reporting by Dan Packel. Editing by Christine Chun and Catherine Sum.