Amid the chaos and uncertainty that reigned as bombs dropped and missiles lit up the skies in Israel and Iran, one thing became clear: Fast-growing, popular markets still pose risks for law firms and can quickly fall out of fashion. To be sure, there are no signs so far that the Middle East legal market has been measurably harmed. Law firms are still opening offices in the region, 25 international firms make up the largest firms in the Middle East’s Gulf States, firms are still expanding with the hire of specialized partners, and the allure of Saudi Arabia is growing. Still, the conflict served as a reminder that the factors that create opportunity can, and do, change. The appetite for withstanding wars, geopolitical tensions, or just simply more competition and less lucrative work depends on the firm. And it’s not just in volatile parts of the world. Goodwin Procter announced this month that it is shuttering its Frankfurt office later this year. Cleary Gottlieb Steen & Hamilton said in May it will close its Frankfurt office in November, after 34 years in Germany’s financial capital. Dechert shuttered its Frankfurt office in 2024, while Arnold & Porter closed down in Frankfurt in 2021. These firms are not abandoning Germany completely—they have offices in other major German cities. But a series of factors have come into play that led to the decision to abandon Frankfurt. These same factors have led to office closures in other places around the world. Competition for work increases, while transactions get smaller. The competition drives up costs for legal talent. International firms find they cannot charge U.S. billing rates if they want to capture market share—a development increasingly unwelcome by the U.S. headquarters of firms focused on increasing profitability. And it’s not just U.S. firms. The Spanish Global 200 firm Cuatrecasas shuttered its Beijing office eight years after launching there. It still has an office in Shanghai, but like many international firms in recent years, hopes that the China practice would grow post-pandemic did not pan out due to China’s prolonged and harsh COVID restrictions, ongoing geopolitical conflicts and a domestic market struggling with slowed growth, tariff tensions and a real estate market crisis. Cuatrecasas explained that its decision to shutter the Beijing office was part of the firm’s strategic plan to strengthen its operations in other global regions. Indeed, last week it added three partners in Latin America, a region where the firm and its Spanish competitors have been expanding in a bid to claim more business and where there’s more money to be made now. Pérez-Llorca earlier this month hired a partner-led team from Jones Day in Mexico, where last year it merged with 100-lawyer Mexican firm González Calvillo, and in May merged with top Colombian law firm Gómez-Pinzón. For many firms, it has become a zero-sum game... | 