The strategy behind Dorsey & Whitney’s ambitious growth plans

Dorsey & Whitney’s recent expansion to Chicago is just a taste of what’s to come for the Minneapolis-based law firm. I recently spoke with Peter Nelson, who became managing partner in July and wasted no time acting on his agenda. “I was elected with a mandate to carry forward the vision I had,” he said. “For me, growth is a priority.”

Nelson started planning his moves well before taking over as the firm’s leader. His pro tip: Transition is easier when you share your vision with stakeholders in advance.

“Build consensus when you can and make the hard decisions when you can’t,” Nelson advises. A banking industry lawyer who served on the firm’s policy committee, Nelson credits his leadership skills to five years of running Minnesota’s Youth Hockey Association. “It was an invaluable experience — dealing with humans, emotions and outsized expectations.”

Are lawyers actually easier to manage than hockey parents? No comment from Nelson on that one.

With 210 attorneys in Minneapolis, Dorsey & Whitney is the Twin Cities’ third largest law firm (behind Fredrikson and Faegre Drinker). Worldwide, Dorsey has around 670 attorneys total, with 22 offices, from Boise, Idaho, to Beijing.

“Chicago has been out there for years as a question mark,” Nelson said. “Why would a firm based in the Midwest not have an office in the third largest city in the country? I didn’t have a good answer.”

Dorsey’s Chicago office opened in November with seven partners including five who were with another Chicago firm and two who are based in Boise but will work closely with the Chicago office. Nelson describes his growth plans as “aggressive,” estimating the new office will hit 25 lawyers within a year and 50 within three years. “Unless you’re willing to go in and have a real growth strategy in a new market, you can’t compete,” Nelson said. “It requires vision and a large investment.”

All this growth could necessitate more office space eventually. But hybrid work habits and shrinking individual office sizes make it possible to grow numbers without immediately adding square footage in most markets (Dorsey is moving its New York office next year, and all private workspaces will be the same size, regardless of seniority).

In Minneapolis, most lawyers are in three days a week, lagging behind many of Dorsey’s U.S. offices. In Phoenix and Dallas, for example, Nelson said the team is in four to five days a week. The one constant in all markets: young associates want to be in every day.

Dorsey’s human growth plans might seem reassuring, considering the efficiencies AI is creating in the legal field — particularly in the area of discovery, or eDiscovery as this type of AI assistance is known. The Twin Cities has long been a hotspot for legal tech, going back to West Publishing. And eDiscovery in particular is already a crowded field. But John Bergstrom and Scott Burns at Mairs and Power VC in St. Paul are among the investors betting on a Bloomington startup called eDiscovery AI. (Burns is a member of the Star Tribune’s Board of Directors.)

I first heard about this company at a party a couple of months ago, when a Chicago-based investor told me, with enthusiasm that sent his wine splashing, how much opportunity he finds in the Twin Cities — calling out eDiscovery AI in particular. Really, it’s eDiscovery AI’s founder Jim Sullivan that has investors feeling confident. Sullivan is both a licensed attorney and a prolific software developer. He previously worked for a competitor, KLDiscovery in Eden Prairie. Sullivan is the first to say his understanding of the law is what makes eDiscovery AI’s work in data classification so sharp.

Tom Palladino, who co-founded NightOwl Discovery and sold it in 2020, joined eDiscovery AI last year as president. “Jim is amazing at building interesting models and layering on the right existing LLMs [large language models],” Palladino said. “I wanted to invest in him.” eDiscovery AI launched its products in March and already has clients around the world.

Local IPO: Park Dental Partners, a dental resource organization that serves practices across Minnesota and Wisconsin, began trading on the NASDAQ on Wednesday at $13 per share. The IPO netted the Minneapolis-based company $20 million in gross proceeds, according to Investing.com.

Stock market meltdown: Saluda Medical, one of several Australian-born medtech companies with headquarters in the Twin Cities, made its debut on the Australian stock market on Friday and probably wishes it could take it back. Shares immediately dropped to half their value, prompting Reuters to describe it as “one of Australia’s worst IPOs this century.”