Sidley Austin and Paul Hastings are the two latest Am Law 100 firms looking to capitalize on Houston’s booming energy sector. But unlike a host of competitors that have also staked out turf in the city in recent years, these newcomers entered the red-hot market in a way that sets them apart: Rather than hire laterals in batches, they handpicked individual lawyers from the local talent pool.
Paul Hastings arrived on the scene in April with the hiring of three lawyers from three different firms: former Baker Botts tax partner Greg Nelson (who chairs the new office), ex–Vinson & Elkins finance partner Paris Theofanidis, and private equity and M&A partner Steven Tredennick, who joined from Bracewell & Giuliani. Paul Hastings augmented the trio by announcing that finance and restructuring partner Kevin Fisher would relocate to Houston from San Francisco.
As The Am Law Daily reported at the time, Sidley took a somewhat more extreme version of the same approach, opening its Houston office with the addition of seven lawyers from seven firms: Locke Lord banking and finance partner Kenneth Anderson; Baker Botts litigation partner Mark Glasser; Jones Day securities and corporate governance partner J. Mark Metts; V&E project finance and M&A partner Glenn Pinkerton; McDermott Will & Emery M&A and project finance partner Sergio Pozzerle; Akin Gump Strauss Hauer & Feld energy transactions partner James Rice III; and Mayer Brown litigation partner Steven Selsberg.
For Sidley, whose roots are in Chicago, the Houston office is the firm’s eighteenth (it has a second Texas outpost in Dallas). For Paul Hastings, opening the Houston office—the firm’s nineteenth—represents the Los Angeles–headquartered firm’s first foray into the Lone Star State.
Paul Hastings chairman Seth Zachary says his firm has often opted for hiring individuals over groups as a way of growing and simply followed that same path into the Houston market. The firm sought out proven talent with energy-related experience in such practice areas as finance, private equity, and capital markets. “In each case,” Zachary says, “we tried to analyze and consider the leading practitioners in those disciplines, and that’s what drove us to the partners that form our initial bench.”
That’s not to say Paul Hastings is not open to the idea of hiring in bunches, Zachary adds, but there are benefits to eschewing groups for a more diverse launch: “The benefit of that is assuring that there’s a uniformity of quality, that people attracted to us fit in quickly and enthusiastically with our culture.”
Larry Barden and Irving Rotter, Sidley partners based in Chicago and New York, respectively, worked on planning their firm’s move to Houston. They tell The Am Law Daily that while cohesion can be a concern with individual hires, the varied backgrounds of Sidley’s Houston recruits has not presented any problems. “It actually goes the other way,” Rotter says. “I think that what it has allowed people to do, because of the fact that they came as individuals, as opposed to when you bring in a group and then some people around them, is that you don’t have a dominant group that people are trying to integrate into.” Instead, he adds, the group has already come together to form a strong bond.
Earlier this year, The American Lawyer looked at the firms that have set up shop in Houston since 2010, a list that includes Blank Rome, Latham & Watkins, McGuireWoods, Simpson Thacher & Bartlett, and Winston & Strawn. While Blank Rome and McGuireWoods entered the local market by merging with Houston boutiques, other firms picked off teams of lawyers with deep ties to Space City. Latham, for example, grabbed groups of attorneys from V&E, Baker Botts, and Akin Gump, while Winston & Strawn hired 40 former Howrey partners.
Alysa Schildcrout—a legal recruiter with Houston-based Amicus Search Group, who is currently working for another Am Law 100 firm looking at Houston—says it is a little surprising to see firms like Sidley and Paul Hastings arrive with so many partners from different firms. Schildcrout’s approach of homing in on groups of lawyers rather than individuals is more of the industry standard, in part, she says, because firms can more easily predict chemistry between lawyers who have worked together in the past.
“What we’re hoping to do is to get three or four foundational partners from a firm and a couple of other partners from another firm—so, at least you have a little bit of group dynamics,” she says of her work for her client, which she declined to name.
The red-hot nature of the Houston market has turned attorneys based there into sought-after commodities. As a result, Schildcrout says, “Everybody’s clamoring for the same talent.”
That may be one reason why Sidley and Paul Hastings decided to diversify in their recruiting efforts. “I think it’s intensifying,” Paul Hastings’s Zachary says of competition for local talent. “But, we are used to surviving in competitive markets and prospering.”
Barden and Rotter say their firm had been eyeing the city for nearly two years. Barden says the market met all of the firm’s criteria for a new office, including: client demand, opportunities for new clients, practice strength, and available legal talent. (Texas clients for Sidley include Commercial Metals Co. of Irving, Texas.)
Even though each of Sidley’s newly minted Houston partners comes directly from a different firm and represents a range of practice areas, it’s not as if the firm plucked seven strangers and threw them into some kind of Houston-based, legal industry version of “The Real World.” While Pinkerton is the only attorney to come directly from V&E, three others—Metts, Anderson, and Rice—also spent time at that firm early in their careers. Pozzerle, meanwhile, spent a decade as a partner at Baker Botts, where Glasser practiced before joining the group at Sidley.
That they boast such prior connections, and were all familiar with each other from working in the same market, made Barden and Rotter confident that synergy between the new office’s leaders would not be an issue.
Clint Johnson, a legal recruiter with Houston-based Johnson Downie who assisted Sidley in launching the office, says the firm went through a normal search process that involved talking to a multiple local attorneys and the plan was never to add partners from seven different firms. Once Sidley began to narrow the list of potential recruits, the prospective laterals did start offering suggestions. “Once you have a couple of key partners that have interest,” Johnson says, “then they talk freely and openly about who else they’d love to practice with.”
(Barden says the firm’s talks with local attorneys lasted roughly a year, and the partners for the most part did not know the other lawyers that the firm was considering until well into the process.)
For its part, Paul Hastings entered Houston following a similar recruiting process. Nelson, who spent 30 years at Baker Botts, says Paul Hastings had been eyeing the market for a few years before entering talks with him several months prior to his hiring after a recruiter contacted him to gauge his interest in a possible move.
Nelson says he and the other new Paul Hastings partners had an idea of whom the firm was in talks with, but that they played no role in bringing each other aboard. Although Nelson had never met his new colleagues prior to the recruiting process, he says the group has come together very well.
“[I have] great respect for Kevin, Steve, and Paris, and what they’ve done in their practices at their old firms, and what they’ll do here,” Nelson says. “I think we’ll gel very, very well. I think we already have, and I think we’ll continue to gel very well.”
The decision to hire individual lawyers rather than groups appears to be working out well for the firms so far. Paul Hastings managing partner Greg Nitzkowski told sibling publication Texas Lawyer at the time the firm’s Houston office opened that he expects its head count to reach 25 to 30 attorneys in its first year. Sidley’s Barden says the seven partners his firm brought in share leadership responsibilities, a dynamic that he believes has been working smoothly. In February, Sidley executive committee chairman Thomas Cole told Texas Lawyer that he expected the office could reach 20 lawyers overall by the end of this year. Rotter thinks the office could exceed that estimate. Indeed, the office has already expanded to include 19 attorneys before the year is even half over. The most recent addition: energy M&A partner Cliff Vrielink, who followed Pinkerton over from V&E at the beginning of May.
And when it comes to work, Sidley has already seen its efforts paying off: Within a month of launching the Houston location, a team from the firm that included Pinkerton, Metts, and Rice landed a role advising a special committee of Cheniere Energy Partners’s board in connection with private equity firm Blackstone Group’s $2 billion investment in that Houston-based company.