Demand for high-end legal services is booming this year, and law firms are competing fiercely for talent across many practice areas. Growth has been particularly strong in some niche practices that barely existed a decade ago, such as cannabis and blockchain. For law firms, the business case for establishing and promoting groups in these emerging fields is becoming ever more compelling. The demand is there, so why not try to get a piece of it?
But there is a big difference between proclaiming expertise in an emerging practice area and actually delivering a top-flight offering. The supply of practitioners with a genuine track record in an emerging field is relatively thin by definition. So from a client’s perspective, it is important to be a skeptical consumer.
Let’s take cannabis as an example. If you found yourself in need of counsel to assist with a cannabis-related matter, you might think the Chambers and Partners ranking of nationwide cannabis practices would be a natural place to start. In Band 1, you’ll find three diversified Am Law 100 firms (Akerman, Duane Morris, Fox Rothschild) and a boutique specialized in cannabis (Vicente Sederberg). So is the right answer to just hire one of those Band 1 firms?
Possibly — but not necessarily. You’ll first want to be clear about the nature of the task and how it aligns with the service offerings of different firms. Cannabis is an especially complicated area for two basic reasons. First, and most obviously, marijuana remains a Schedule I drug at the Federal level. Many elite law firms therefore remain cautious about serving cannabis clients, especially companies whose operations entail direct handling of the product (sometimes called “leaf-touching” entities).
Second, to the extent cannabis cultivation and distribution has been legalized by State legislatures, each market exists wholly within the individual State: there is no legal interstate commerce in cannabis products. This means the regulatory dimension of the industry is deeply fragmented. To the extent counsel may have regulatory experience in one State, the legal knowledge and regulatory relationships will not translate neatly to another jurisdiction.
Given that complexity, it is important to be savvy about what you actually need and whether a firm is properly equipped to provide it. For one thing, the fact that a legal task is connected to a cannabis company doesn’t by itself make the matter distinctive. Much of the legal work in the cannabis field entails bread and butter transactional services that look broadly similar to transactional work in any other industry. For example, if you want to set up a fund to invest in the cannabis space, you should probably hire a highly experienced funds counsel, rather than a lawyer who claims particular expertise in cannabis. If you can find both, that’s great, but in general, industry knowledge is going to matter less than functional experience.
Conversely, if you need advice about cannabis regulatory matters, both industry and geographic experience will be critical. Be careful about hiring a nationwide firm in this situation. A credible locally-based provider who knows the regulators in the relevant State may well be a better choice than a firm that appears on the Chambers ranking.
As a general rule in emerging practice areas, there is a real temptation to rebrand some current partners as experts in the new field. The firm will then try to convince clients to send relevant matters its way, enabling the firm’s lawyers to learn on the fly by working on those initial matters. Essentially, fake it until you make it. One Am Law 100 firm currently has a cannabis group led by a litigation associate. In fields like cannabis or blockchain, you’ll want to be extra skeptical of claims of expertise, to ensure that you aren’t subsidizing the development of lawyers whose depth in the subject matter is questionable. Know what you need, and don’t pay your counsel to learn on the job.