Welcome back to the Big Law Business column. I’m Roy Strom, and today we look at how Cooley has sent its lawyers from Chicago across the Midwest in search of new business. Sign up to receive this column in your Inbox on Thursday mornings.
Cooley LLP launched a Chicago office three years ago during the height of a booming market for its emerging companies practice. Its lawyers there are tasked with carrying out a strategic mission to capture entrepreneurial business outside the well-worn corridors of Silicon Valley and the coastal northeast.
The nearly 20 partners based in the firm’s office on N. Wacker Drive spend between 10% and 15% of their time in other Midwest cities, such as Columbus, Ohio, Ann Arbor, Michigan, or Minneapolis. They have built relationships with university technology transfer offices, the young companies they spin out, and other players in the venture-capital-backed ecosystem.
The “hub-and-spoke” model is central to a 78-page business plan that Cooley developed before becoming the first Silicon Valley firm to put boots on the ground in the Windy City.
Rachel Proffitt, who took the reins as Cooley’s chief executive in January, visited the office last month and stressed plans to grow the Chicago team while branching out across the Midwest.
“We’re not done growing,” Proffitt said in an interview. “We need to continue to make those inroads in the broad community, which is across the Midwest, not just Chicago. That’s a big ask. Because that’s asking that team to leave house and home and be on the road.”
The travel has paid off in securing clients such as Realta Fusion, a Madison, Wisconsin-based early-stage fusion energy company that Chicago partner Laurie Bauer led through a seed financing round by Khosla Ventures last year. And Diasome Pharmaceuticals, a biopharmaceutical company out of Cleveland, which Chicago partner Yvan-Claude Pierre has advised on general corporate matters, including a Series C financing.
Since launching with 10 partners in mid-2021, Cooley’s Chicago office has grown to about 50 lawyers, according to its website. Most of that growth came in the office’s first year, before many of the financial markets Cooley services, such as venture funding and initial public offerings, took a dramatic downturn.
Cooley’s overall growth trajectory slowed during the tough market, with the firm conducting layoffs in late 2022. Cooley brought in just over $2 billion in revenue in 2023, a record. But profits per partner, at $3.5 million, remained below their peak from the boom times in 2021, according to AmLaw data.
The firm has more than doubled its roster of Midwest-based clients to more than 1,000, a firm spokesman said. A firm leader said it represented nearly 450 such clients before launching in Chicago.
Chicago-based corporate partners Christina Roupas and Courtney Tygesson led the firm’s team last month advising precision medicine company Tempus AI on its IPO that raised $410 million, valuing the company at more than $6 billion.
Roupas, the Chicago office partner in charge, said there will be more IPOs coming out of Chicago in the next couple of years.
“We’re not San Francisco and we’re not New York, but there are incredible technologies here, incredible founders that have been well funded, and VCs have been willing to be patient,” she said. “It feels like we’re crossing over into companies calling about real discussions about IPO preparations. So as a capital markets lawyer, nothing more warms my heart.”
Venture capital investments are still highly concentrated in Silicon Valley and the East Coast corridor of Boston, New York, and Washington.
Those metro areas captured around $400 billion in venture capital investment from 2019 to 2021, more than 65% of the country’s total. That’s according to a study by Richard Florida, a professor at the University of Toronto’s School of Cities and Rotman School of Management.
The US “heartland,” a cluster of 20 states including the Midwest, received $55 billion of venture capital investment, 9% of the country’s total in that two-year period, the study showed.
Still, the study highlighted growth in several Midwest cities, such as Chicago, Columbus and Minneapolis, driven by companies borne out of university research.
Providing guidance and connections for those entrepreneurs has been part of Cooley’s strategy. Last year, the office sponsored a “capital call” event, inviting venture capital funds from the coasts to meet Midwest founders, which led to some funding deals, Roupas said.
The Chicago office has also developed relationships with the University of Chicago, Northwestern University, the University of Illinois, and the University of Michigan, sponsoring accelerator or incubator programs.
During a June trip to Ohio State University, Roupas spent a day with leaders of life sciences companies, explaining how Cooley provides a one-stop set of services to young companies from their earliest days.
“There is sort of this Midwest set of values and the people value sitting down in a room and seeing their lawyers,” Roupas said. “So, being on the ground and showing that the firm was willing to make this investment in the region has been incredibly meaningful.”
Worth Your Time
On Wealth Surviving Death: If you want to preserve yourself in hopes of living forever, Erin Schilling reports on what estate lawyers do to make sure your money survives the deep freeze your body must endure.
On Linklaters: UK firm Linklaters reported its highest-ever revenue and pre-tax profits, with its top line hitting £2.1 billion ($2.69 billion) in the financial year ended April 30, 10% more than the previous year, Mahira Dayal reports.
On Bankruptcy: Kirkland & Ellis is looking to be paid $48 million for its work representing WeWork Inc. in its Chapter 11 case, while Paul Hastings seeks about $14 million for advising the official committee of unsecured creditors in the case, Thomas Gleason reports.
That’s it for this week! Thanks for reading and please send me your thoughts, critiques, and tips.