Texas-based corporate law firms experienced strong headcount, demand and revenue growth during the first nine months of 2024, according to new Citi’s Law Firm Group data provided to The Texas Lawbook.
The dozen or so law firms headquartered in Texas increased their year-over-year lawyer headcount during the first three quarters by three percent, compared to 1.3 percent for firms nationwide. Those firms grew equity partnership by 2.2 percent, which compares to zero percent nationally, according to Citi’s exclusive data.
“Our Texas firms are buying into the idea of improving microeconomic growth,” said Michael McKenney, a senior specialist with Citi’s Law Firm Group Advisory Team.
Citi data shows that between January and September, Texas firms increased revenue by nine percent in 2024 over 2023, while revenue nationally for law firms was up nearly 12 percent. McKenney said the nine percent growth number excludes an outlier firm that witnessed extraordinary growth last year. Citi declined to identify the outlier firm but Texas Lawbook 50 data points to Houston-based litigation powerhouse Susman Godfrey, which reported record-high revenues and profits due to a few huge contingency fee settlements.
The Texas law firms witnessed a two percent increase in demand and a 12.3 percent jump in inventory, which is hours worked and invoiced but not yet paid.
At the same time, expenses for the Texas firms were up 5.6 percent during the first nine months, which is lower than the 7.5 percent nationally, according to Citi.
“The primary driver of increased expenses was an increase in lawyer headcount and compensation,” McKenney told The Lawbook.
Gloria Gomez, also a senior specialist at Citi’s Law Firm Group Advisory Team, said productivity increased 2.3 percent nationwide.
“We are seeing a lot of good news across the board,” Gomez said.
In a separate report by the legal recruiting firm Major, Lindsey & Africa, the average compensation for law firm partners in Dallas was $1.51 million, which was up 4.1 percent from 2021. By comparison, law partners in Houston were paid $1.28 million in 2023, which was a 5.2 percent decline from 2021.