A 'seismic shift' in Texas: BigLaw shops raid local firms for top talent and big bucks follow
Until recent years, attorneys at top Texas corporate law firms routinely followed the standard of a bygone era in refusing to jump ship to accept a competitor’s higher offer.
No more. In what the Texas Lawbook (sub. req.) describes as a “seismic shift” in the business of law in the state, BigLaw firms located elsewhere have been galloping in and opening satellite offices—and their checkbooks. Texas Lawbook made the observation based on a legal industry survey it conducted. A shorter version of the article describing the survey is available from the Dallas Morning News.
Among the 11 biggest corporate law firm money-makers in the state, all of which generated $1 million revenue per lawyer in Texas in 2015, there are only three law firms on the list whose headquarters are in Texas, the article reports.
They are Akin Gump (whose primary offices are in Dallas and Washington, D.C.) and the Houston-based Baker Botts and Vinson & Elkins.
As recently as 2008, only two law firms in the state reported $1 million in revenue per lawyer, the article notes.
“A generational shift in the legal marketplace in Texas is taking place,” said managing partner Rob Walters of the Dallas office of Gibson Dunn & Crutcher. “The legal market is separating the haves from the have-nots. Rich law firms in Texas are getting richer.”
As BigLaw firms spend big bucks to attract top legal talent, the best clients follow, as revenue figures demonstrate, he said.
Kirkland & Ellis is Exhibit A in the sea change. Only two years ago, the 1,700-attorney Chicago-based corporate powerhouse opened its first Texas office in Houston, with Andrew Calder, a top practitioner from Simpson Thacher & Barlett.
Calder has since brought in 65 more attorneys and another 20 are scheduled to come on board in the fall. Meanwhile, Kirkland is number-one on the list of Texas law firms generating $1 million or more in revenue per lawyer—at $1,424,000 in 2015, according to a chart accompanying the article.
“We have been so busy in Texas that we’ve had to bring in lawyers from other offices to meet the demand,” said Calder. “The key has been to put together a team of young, hungry lawyers who want to dominate the market in their practice areas. The firm’s goal is to be a major player in the Dallas and Houston markets.”
Behind the big bucks being earned by the top 11 corporate firms is a story of long-established Texas law firms facing tough new competition—at a time when much of the energy industry is in a economic downturn.
Although some Texas-based firms are doing well, a number have seen their revenue decline. Houston energy boutique Burleson closed its doors last year. The previous year, Burleson had 110 lawyers and $100 million in revenue, Texas Lawbook reports.
Among those doing well in Texas is Thompson & Knight, whose revenue in the state last year increased by 4 percent. Nonetheless, “The economy is a challenge. Changing client demands is a challenge. Holding on to our talent is a huge challenge,” said managing partner Mark Sloan earlier this year.
