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Crazy, I have quite a bit of experience with this exact scenario: law firms using geo subdomains to target specific areas. Here's my findings and suggestions based on actual results and experience: SEO on domain.com benefits atlanta.domain.com. This is a fact. If Starbucks decided to create subdomains tomorrow for every location, their subdomains would benefit from 91 DA. That's how Findlaw, lawyers.com and all those guys get first page placement with high DA and low PA. Digital Diameter is right, subdomains are more effective and directories are more efficient. UNLESS you have a really good multi-site CMS. Then you can be equally efficient and more effective. I hope this answers your question, if you want some help or have any other questions, PM me.