The Texas corporate legal market has started 2026 with a frenzy of activity that includes several high-profile lateral partner moves, new office openings, new hourly rates nearing $3,000 and record-shattering compensation agreements with some lawyers being offered guaranteed multi-year compensation packages exceeding $20 million.
Just this week, three nationally elite law firms — King & Spalding, Paul Weiss and Weil Gotshal — announced they were opening or significantly expanding their offices in Dallas, Houston and Austin. In January, the Wall Street corporate law firm Sullivan & Cromwell opened a small outpost in Houston.
Within the next few days, global corporate law firm Latham & Watkins is expected to announce the opening of an office in Dallas.
At the same time, prominent lawyers in Dallas and Houston say they have been contacted by recruiters or partners with Davis Polk, another New York firm, about opening an office in Texas.
To attract the needed talent, law firm leaders and recruiters are making offers that are compared to free agency in Major League Baseball.
Rainmaking partners are being offered two and three-year contracts ranging from $8 million to $23 million annually, but even younger partners are being offered $5 million to $8 million per year.
“It appears we’re in the midst of Big Law’s version of college football’s transfer portal,” said Gibson Dunn retired partner Rob Walters. “Law firms might need to rethink how they compensate partners. We don’t see private equity or even investment banking partners changing jerseys every January.”
Law firm leaders and industry analysts say that any financial discounts that business clients enjoyed only a few years ago by hiring Texas lawyers are long gone, as top lawyers in Texas are now being paid similar to their counterparts in New York, Washington, D.C. and California.
“Dallas is now a national legal market,” said Kirkland & Ellis partner Andy Calder. “All three Texas markets — Houston, Austin and Dallas — are attractive and the client base in Texas is expanding.”
Holt Foster, managing partner of the Dallas office of Willkie Farr, said there is a “war for talent” underway among law firms in Texas.
“Texas was not seen as a premier legal market for many years, but it has intentionally evolved into a premier business and premier legal market,” said Foster, who pointed to the creation of the Texas Business Court, no income tax and recently passed state laws that favor corporations. “If law firms want to tell their clients that they have talent in every major business center in this country, they need to have lawyers in Dallas and Houston.”
Many of the national law firms originally entered the Texas market 15 years ago by luring partners away from Texas-based law firms with contract guarantees ranging from $3 million to $6 million.
Law firm leaders launched many of the Texas offices by hiring big-name partners. Los Angeles-founded Latham launched in Houston by luring Michael Dillard away from Akin Gump and Ryan Maierson and Sean Wheeler from Baker Botts. New York-based Simpson Thacher opened in Houston in 2011 by snatching Robert Rabalais from Vinson & Elkins. Gibson Dunn, another firm founded in Los Angeles, expanded its Dallas operations that same year by hiring then-Energy Future Holdings General Counsel Walters and V&E partners Jeff Chapman, Rob Little and Veronica Moyé. Chicago-founded Kirkland launched in Houston in 2014 by grabbing Calder from Simpson Thacher.
In 2017, Chicago-founded Winston & Strawn opened its Dallas office by hiring Tom Melsheimer, Steve Stodghill and others from Fish & Richardson.
King & Spalding, a firm with its roots in Atlanta, started its Dallas operation in 2024 by luring Moye away from Gibson Dunn. Then, this past Monday night, Groundhog Day, Melsheimer and Stodghill led a team of eight partners to significantly expand King & Spalding’s Dallas office.
“This is a war for the best talent because the best talent attracts the best clients,” said prominent Dallas trial lawyer Melsheimer, now the managing partner of King & Spalding’s Dallas office. “King & Spalding is in it to win this war.”
The firm gave Melsheimer a three-year contract that will pay him more than $15 million a year, according to multiple sources.
The same day as the Melsheimer move, New York-based Weil Gotshal, which has offices in Dallas and Houston, officially opened in Austin.
Then, on Wednesday, Paul Weiss, another Wall Street firm, announced it is opening a Houston office and has hired two prominent Kirkland & Ellis partners, Wheeler and Debbie Yee. Wheeler and Yee are mainstays in the annual Corporate Deal Tracker rankings for most M&A transactions. Multiple sources confirmed that Paul Weiss is paying Wheeler, whose M&A practice focuses on upstream oil and gas, about $23 million a year.
Now, multiple lawyers confirm that Latham, which has offices in Houston and Austin, is expanding into Dallas with the hires of Kirkland litigation partner Taj Clayton and Winston & Strawn partner Scott Thomas. Multiple lawyers confirm that Clayton, who has deep contacts and relationships within the private equity community, was offered a multi-year contract that pays $20 million annually.
“The Texas legal market is attractive to many firms and clients, especially as other legal markets are declining for economic and geopolitical reasons,” said Sidley Austin Management Committee Chair Yvette Ostolaza, who joined Sidley in 2013 from Weil Gotshal.
Paul Genender, who left Weil Gotshal in 2023 and is now the managing partner of the Dallas office of Paul Hastings, said the strength of the Texas legal market is a reflection of the state’s energy markets and finance industries, the emergence of “Y’all Street,” the business court and the booming Texas economy.
“It is the most robust economy and legal market I have seen in my 30 years of practice,” Genender said.
Law firm consultant Kent Zimmermann said that the compensation packages for Texas lawyers are growing close to those in New York, California and Washington, D.C.
“Some lawyers are in such high demand and their high compensation reflects a very limited supply of talent at that level,” Zimmermann said. “When law firms recruit star lawyers in places like Dallas and Houston, those lawyers have practices that are national and international. Those lawyers are working for clients on matters far beyond Texas. These are the kind of matters — trials and transactions — that are discussed in corporate board meetings of publicly trading companies and their outcomes impact the share prices of publicly traded companies.”
The Texas offices of national law firms witnessed huge revenue and profit increases ranging from 15 to 30 percent in 2025, which are fueled by significant rate jumps with some Texas lawyers at corporate firms now charging their business clients rates ranging from $2,375 an hour to $2,850 an hour.
In the past few years, however, the top legal talent has gotten considerably more expensive. Part of the reason, according to Zimmermann and other industry leaders, is because firms like Paul Weiss, Latham and King & Spalding were late to the game in launching new offices or significantly expanding existing ones.
And there are a lot of legal industry leaders who believe the enormous salaries, ever-increasing hourly rates and partners who jump from firm to firm are pushing the outer limits and stressing the relationships between the law firms and their business clients.
“I would be leery of people who just move for the money or law firms that are late to the Texas market,” said V&E Chair Keith Fullenweider. “Clients are getting concerned about it. I think clients are wondering what is in all of this for them.”
“There is no free lunch in this business and clients are asking what is the value in this for them,” Fullenweider said.