• Subscribe
  • Log In
  • Sign up for email updates
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

The Texas Lawbook

Free Speech, Due Process and Trial by Jury

  • Appellate
  • Bankruptcy
  • Commercial Litigation
  • Corp. Deal Tracker/M&A
  • GCs/Corp. Legal Depts.
  • Firm Management
  • White-Collar/Regulatory
  • Pro Bono/Public Service/D&I

Texas Firms Lead Nation with 13% Revenue Surge in 2023 as Results Driven by Big Victories

May 27, 2024 Richard Alm

The 10 biggest Texas-based firms posted an eye-popping 13 percent revenue gain in 2023, good enough to earn the top spot among the 11 regions in Michael McKenney’s latest review of the U.S. corporate law business.

McKenney, managing director of the Citi Private Bank Law Firm Group, quickly added caveat on the Texas data: “Two of the firms in our sample had extraordinary years — years where results were driven by big contingencies and settlements in long-invested projects that came to fruition in 2023.”

When McKenney removed the two firms, Texas’ revenues rose just 5.2 percent, a bit below the national average. 

A confidentiality pledge prevents McKenney from identifying the two firms. At The Texas Lawbook, we keep close tabs on the Texas market — so we’ve got a shoo-in for one of them. A few weeks ago, we published a story on Susman Godfrey’s 120 percent leap from $190 million in 2022 to $420 million in 2023.

Two candidates emerged for the other outlier — Akin with a $138 million gain in firmwide revenues (11.2 percent) and Haynes Boone, up $84 million (16.5 percent).

For the 10 Texas firms, the two outlier firms also contributed to a 21 percent gain in profits per equity partner, once again topping the 11 regions by a wide margin. Setting aside the two firms, Texas was around the national average at 5.3 percent.

McKenney’s comments were part of a Texas Lawbook-organized webcast earlier this month on the Texas’ corporate law marketplace. He and Lawbook founder Mark Curriden discussed how firms fared in 2023, with a look at the early readings on where the business will go in 2024.

Publisher’s note: Email brooks.igo@texaslawbook.net to inquire about a recording of the Texas Lawbook/Citi Global Wealth at Work webcast.

“As we moved through 2023, each successive quarter was stronger,” McKenney said, “and that has continued into 2024.”

As a sign of the year’s positive start, he offered one telling U.S. data point: completion of 15 deals each valued at more than $10 billion in the first quarter.

Bouncing Back in 2023

Based on national data covering 166 firms, McKenney gave an overview of corporate law as wobbly in 2022 due to global crises, an uncertain energy market, rising interest rates and high inflation. By most key metrics, firms bounced back strongly in 2023, led by activity in energy transition, white-collar investigations, regulatory compliance and deal-making.

The steep upward trend in hourly rates has been driving revenues up over the past few years, McKenney said, but the 10 Texas firms lagged the rest of the nation. Their 7.7 percent bill rate hike in 2023 was eighth among the 11 Citi regions.

“The extraordinary thing about the bill rate increases we have seen in there has been a fundamental reset.” McKenney said. “That 4.5 percent, which was the historic compound annual growth rate, moving up to numbers like 7.5 and 8.5 (percent) – and even stronger in some markets.” 

McKenney suggested the Texas-based firms could be more aggressive in raising rates, especially considering what the out-of-state competition is doing in Texas and elsewhere.

“The folks from the Northeast, the folks from the upper Midwest, the folks from California are actually providing cover,” he said. “I’m not sure our Texas firms have really seized on that opportunity. We’re not seeing that pace of bill rate increases that we are in some other markets.”

The Texas-based firms were in hiring mode in 2023. They grew their lawyer headcounts by 3 percent and their equity partner ranks by 2.4 percent — both second among Citi’s 11 regions.

The Citi employment figures count the Texas-based firms’ lawyers both inside and outside the state. The Texas Lawbook 50 headcount rankings, released earlier this month, focuses on lawyers working in Texas offices and includes the big non-Texas law firms now dominating corporate law in the state. The Lawbook 50 showed headcount gains slowed from 3.8 percent in 2022 to 2.6 percent in 2023.

The brisk hiring had some ripple effects, McKenney said. It eroded utilization rates, a gauge of productivity, and contributed to the rising cost of doing business.  

“Expenses are being led by lawyer compensation,” McKenney said, “but we’re also seeing operating expenses rebound. That is a reflection of a resumption of marketing, client events, return to office … our lawyers are traveling again.”

When it comes to work performed but not yet in the billing cycle, the Texas region ranked seventh, with an 8 percent increase in 2023. According to McKenney, the state’s accumulating inventory would have been larger if not for the two outliers closing the books on major activities.

“Inventory is kind of a flashing yellow light for us,” he said. “We are seeing the collection cycle slow. But that’s not particularly surprising. If each successive quarter is stronger, our end of 2023 inventory is going to be higher, and it will not have made it through the conversion cycle to being invoiced and being collected.”

A related concern centers on the aging of the inventory. The economy’s 2022 disruptions put some legal activities on hold, and McKenney’s data didn’t show significant write-off activity at the end of 2022.

“So we said, ‘OK, folks are optimistic — they expect these deals to come back,’ and we watched the inventory continue to age,” he said. “We’ve now got a portion of our inventory that … has now made it to two years. You have to be really wondering if there isn’t a reconciliation coming at the end of 2024.”

Momentum Continues into 2024

Preliminary data on this year’s first quarter point to a continuation of the bullish themes of 2023. In addition to those $10 billion deals, McKenney finds that bill rates and headcounts were both up in the first reports on this year.

The readings support the findings of the latest Citi Law Firm Leaders Survey, which focuses on firms nationwide. “At least in the expectations of law firm leaders,” McKenney said, “2024 is going to be a very good year, a continuation of the strong performance that we saw in 2023 and really cementing the rebound away from our experience in 2022.” 

The firm leaders expect growth in revenue and net income. They think headcounts will rise across all lawyer levels. 

A key driver in 2024, as in 2023, will be bill rates, the firm leaders told the Citi survey. Strong demand will support continued upward surge in pricing, even if it entails some erosion in realization. “The strategy is working and likely to continue to 2024,” McKenney said. 

And the best place for the legal business in 2024? The firm leaders like what they see close to home. “They are in fact more optimistic about the performance of the U.S. economy than they are about performance globally.”

©2025 The Texas Lawbook.

Content of The Texas Lawbook is controlled and protected by specific licensing agreements with our subscribers and under federal copyright laws. Any distribution of this content without the consent of The Texas Lawbook is prohibited.

If you see any inaccuracy in any article in The Texas Lawbook, please contact us. Our goal is content that is 100% true and accurate. Thank you.

Primary Sidebar

Recent Stories

  • Fifth Circuit Tells Judge O’Connor More Analysis Needed in Media Matters, X Corp. Venue Spat
  • Willkie Continues to Expand its Dallas Office with Veteran Dealmakers
  • FBFK Adds Two Lawyers to its Austin Office
  • Litigation Roundup: CEO Indicted in Alleged UT Austin Arena Bid Rigging Conspiracy
  • ‘Whatever It Takes’: San Antonio Lawyer Joins Frontline Flood Recovery in His Hometown

Footer

Who We Are

  • About Us
  • Our Team
  • Contact Us
  • Submit a News Tip

Stay Connected

  • Sign up for email updates
  • Article Submission Guidelines
  • Premium Subscriber Editorial Calendar

Our Partners

  • The Dallas Morning News
The Texas Lawbook logo

1409 Botham Jean Blvd.
Unit 811
Dallas, TX 75215

214.232.6783

© Copyright 2025 The Texas Lawbook
The content on this website is protected under federal Copyright laws. Any use without the consent of The Texas Lawbook is prohibited.