Race to California: Why are UK firms opening offices on the West Coast?

Find out why firms are scrambling to invest in California real estate to catch the big fish in the Pacific. 

Four UK firms have set up shop in California in 2014, and there is potential for more to follow next year. So what is all the fuss about? Find out everything you need to know right here.

What do Penningtons Manches, Clyde & Co, Osborne Clarke and Withers have in common?

Easy. Those are the four UK firms that have opened their doors in sunny California during 2014. Penningtons Manches was the latest firm to announce a new office in California in December, its first office outside of the UK. It joined Clyde & Co which opened in June, Osborne Clarke which launched in March and Withers, which began operating in August.

Why is this happening now?

Views of the Pacific and sunny weather all year round are far from the only attractive qualities that California has to offer.

The promise of a pipeline from Silicon Valley’s tech hub and relationship-building with international companies that are headquartered in the area have been the main attraction for UK firms, who have decided to make an investment on the ground to try to land big deals.

Withers managing partner Margaret Robertson sums it up: “California is a huge economy for high net worth individuals and there’s a lot of investment into the economy from Asia.”

How many people does it take to open a California office?

Not many, these UK firms have proven. Penningtons Manches parachuted two partners from the UK, Clydes hired two partners from US firm Keesal Young & Logan, Withers hired a consulting partner from McKenna Long & Aldridge and Osborne Clarke has one permanent partner.

What kind of work are they doing there?

Work doesn’t stop with the technology sector. Take Clydes for example, a firm that has had a US presence since 2006 and opened its Orange County office earlier this year to focus on the marine and energy markets.

Withers set up its base to work on trusts and estates, although it is trying to grow its technology practice as well; whereas Osborne Clarke decided one California office wasn’t enough, adding a San Francisco hub near its existing Palo Alto offering to amplify its legal technology portfolio.

How will that impact firms’ strategies?

Although an office in California is unlikely to have an immediate impact on firms’ overall revenue, a presence on the ground has proven to be one that many firms are willing to make. 

Clydes senior partner James Burns said the firm anticipated that its Orange County base would generate income of around $3m (£1.8m) in the first year.

Do say

The value of an office in the area is definitely justified if there is client demand and the capability to extend current relationships due to presence on the ground.

Avoid mentioning

The business value of a California investment makes sense – but what about the competition from other firms that have set up shop in the area, as well as all the US firms that have roots in the region?