I wouldn’t just mention firms with a location to the one you are applying to - it will need to be a bit more refined than that.
Firstly, work out how you are going to categorise them as competitors - there are many different measures you could use (location being one), but you could look at other factors like client base, sector expertise, practice areas, who they lose talent to (eg have any partners jumped ship either to or from this firm), revenue. Some of those categories can also be defined themselves, one competitor in one practice area might be different to another.
So defining how you have considered who is a competitor creates structure to your answer and makes your analysis clear.
Then select a small number 2-4 firms max that meet the criteria you have set.