The top 50 corporate law firms operating in Texas added an average of one lawyer per firm in 2020. Firms now flush with business are worried about overworking their lawyers and are keen to hire new lawyers in 2021, but the talent just isn’t available. Of course, even one new face is more than most industry insiders anticipated a year ago as the Covid-19 pandemic and sinking oil prices plunged the economy into recession. The Texas Lawbook has the data and an in-depth report.
Exclusive new data shows that the pandemic put a deep chill on the overheated Texas lateral market last year. Not only did firms stop recruiting, but lawyers stopped answering. But analysis shows it didn’t solve the long-term core problem: too much demand for too little talent in Texas. The result: $250,000 signing bonuses. The game of musical chairs is back.
How would the COVID-19 pandemic have disrupted the legal business before laptops and the internet – an era within the living memory of some lawyers still practicing, when secretary-typed documents, wall-wired telephones and telexes or faxes were the main alternatives to face-to-face engagement. Would lawyers have taken foolish risks with their health – just to make a living? Would communications obstacles shut down legal practices and squeeze revenues enough to cause some firms to fail? The Texas Lawbook takes a look.
Texas corporate law firms salvaged their 2020 revenues because of strong demand from clients trying to navigate a perplexing business environment and a surprising capacity, heretofore hidden or rarely called upon, to supply those services remotely. Even though firms leapt into it literally overnight with no time to plan and prepare, remote working proved effective and efficient last year.
“The pandemic impacted how we did business much more than the business we did,” said King & Spalding’s Houston office leader Tracie Renfroe.
2020 Revenues v. 2019 Chart 1 More or Less Than Expected? Chart 2 Pandemic or Oil? Chart 3 Revenues per Lawyer Above $1 Million Chart 4 Revenues per Lawyer Below
Eleven months ago, law firm leaders looked into the abyss. Covid-19 had shuttered offices. Oil prices had plunged. Unprecedented disruptions loomed for corporate clients. The law firms feared drastic declines in revenues, wiped-out profits and painful layoffs.
The Texas Lawbook surveyed 26 law firms on what really happened during the pandemic. In the first of a three-part series, The Lawbook provides an advanced look at 2020 Texas law firm finances and operations. “All of us should be on bended knee, giving thanks,” said Jackson Walker’s Wade Cooper.