Large and mid-sized law firms representing businesses in Texas are doing more work and generating more revenues this year than they ever have before.
Seventy-five percent of the biggest corporate law firms operating in Texas say that they are witnessing a record year in revenues and profits so far, according to a new Texas Lawbook survey of law firm leaders.
The other 25 percent of law firms confirm that they are having a better than expected year financially, but likely will not exceed revenues or profits from the past few years, which also were record highs.
“If you can’t make money in this economy, you just can’t make money,” says Andrew Baker, managing partner of Baker Botts in Houston.
“No doubt, 2018 is going to be a record-setting year,” says Rob Walters, managing partner of the Dallas office of Gibson, Dunn & Crutcher. “We are having an off-the-charts year.”
During the past two weeks, The Texas Lawbook interviewed 28 leaders of business law firms with significant operations in Dallas, Houston and Austin about firm financials after the first three quarters of 2018.
Twenty-one of the 28 corporate law firms say their internal data shows their lawyers worked more hours and generated more revenues during the first nine months of 2018 than in any time in their firms’ histories.
“We are having a record year so far,” says Phil Appenzeller, chief executive office at Dallas-based Munsch Hardt Kopf & Harr. “Our lawyers are incredibly busy.”
Haynes and Boone managing partner Tim Powers agrees. “We’re on track for our best year ever,” he says. “We are cautiously optimistic about the next year.”
Business clients seem to be spreading their love to law firms of all shapes and sizes.
National operations such as Akin Gump, Gibson Dunn, Greenberg Traurig, Holland & Knight, Kirkland & Ellis, Latham & Watkins, Sidley, Simpson Thacher and Winston & Strawn are going gangbusters.
“We’re having another banner year,” says Yvette Ostolaza, managing partner of the Dallas office of Sidley Austin and a member of the firm’s executive and management committees.
“For several months this year, the Dallas office has been the busiest office in the firm,” says Winston managing partner Tom Melsheimer in Dallas. “We’ve been meeting or matching all billable expectations.”
Scott Wallace, Holland & Knight’s executive managing partner in Dallas, said his firm is having its “best year for revenue since we opened in Dallas five years ago.”
“Our revenue is up significantly from 2017,” says Greenberg Traurig managing shareholder Joe Coniglio. “We’ve seen a significant uptick in business this year.”
Mid-sized regional shops like Munck Wilson Mandala, Porter Hedges and Bell Nunnally & Martin report strong revenues in the first three quarters of 2018.
“We are having a fantastic year,” says Porter Hedges managing partner Rob Reedy. “Through the first nine months, things are going very well.”
Bell Nunnally managing partner Jim Skochdopole says “business is great” and the firm is having “a record year.”
Traditional old-line Texas-based firms, including Baker Botts, Haynes and Boone, Jackson Walker, Vinson & Elkins, Winstead and Thompson & Knight, say their lawyers are busier than ever.
“Every financial indicator is up,” says Thompson & Knight managing partner Mark Sloan. “We are on pace to beat every metric year over year.”
V&E chairman Mark Kelly says the firm is having “a very strong year.”
“We should have another record year,” Kelly says.
Adds Jackson Walker managing partner Wade Cooper: “The firm is having a very good year across most practice areas. We’ve really seen phenomenal success in our real estate practice the past couple years.”
Even the mega-global law firms, such as Baker McKenzie, Jones Day and Norton Rose Fulbright, are experiencing strong growth in their Texas operations. Lawyers at DLA Piper, which beefed up its Dallas and Houston offices this spring, say they are experiencing an extraordinary year so far.
“Revenue per lawyer is up significantly,” says Richard Krumholz, who heads the national litigation practice at Norton Rose Fulbright. “We are on track to have a significantly up year, which is rewarding after years of investment.”
Unlike past years, the increase in legal demand is not limited to one or two practice areas.
“We are busy across all practice areas,” says Hilda Galvan, managing partner of the Dallas office of Jones Day. “Our team has been very busy and there is a lot of work in the pipeline. The demand for legal is definitely there.”
Galvan and others told The Texas Lawbook that lawyers specializing in energy, private equity and M&A are obviously busy, but that other practices, such as complex commercial litigation, intellectual property disputes, cross border transactions, real estate deals and white-collar criminal practices are loaded with business from clients.
Bankruptcy is the only practice group with less work than in previous years, but firms are shifting many of the restructuring lawyers to their M&A sections to handle the increase in corporate transactions.
“We are very pleased in nearly all areas,” Baker says. “Technology, energy, capital markets, M&A, project financing, utilities, private equity and IP litigation are all strong.”
While the Foley Gardere merger is only six months old, Dallas office managing partner Michael Newman says lawyers at the newly-combined firm are already seeing positive results.
“We are doing significantly better than we did in 2017,” Newman says. “We are exceeding all metric projections year over year and on a per lawyer basis.”
And then there is the beast: Kirkland, which four and a half years ago didn’t even have an office in Texas. Today, the Chicago-based firm officially surpassed 200 lawyers in the state – 170 in Houston and 30 in Dallas.
“We’re busier than we’ve ever been,” says Kirkland’s managing partner in Houston, Andy Calder. “We never dreamed business in Texas would be this good.”