The Houston legal market is heating up. Since 2010, six Am Law 200 firms, including Latham & Watkins, McGuireWoods, Simpson Thacher & Bartlett, and Cadwalader, Wickersham & Taft, have opened up shops. While the area is home to a strong maritime industry and the nearby Eastern District of Texas—a hub for IP litigation—the driving force behind the current growth is a thriving energy sector. “M&A and all types of energy transactions are very hot,” says Alysa Schilcrout, a legal recruiter with Houston-based Amicus Search Group who says she’s placed 70 lawyers for Am Law 200 firms in the past two years in Houston.
While some firms, such as McGuireWoods and Blank Rome, entered the market by merging with Houston boutiques, other national firms, including Simpson Thacher, are going solo. Many of these top-tier firms are building their practices by luring talent away from prominent Texas-based firms, including Vinson & Elkins and Baker Botts. “Competition is extremely high, particularly for energy lawyers,” says Michael Dillard, managing partner of Latham’s new Houston office. “Everyone gets calls from headhunters all the time; it’s a frothy lateral market.”
Indeed. According to our latest Lateral Report [see "This Time It's Personal"], there have been 99 lateral moves in Houston during our survey period, and 55 of those were from one Am Law firm to another. Latham raided talent from several top Texas firms since opening in January 2010. It brought on seven energy transaction partners from three different firms that have a long history in the area—V&E, Baker Botts, and Akin Gump Strauss Hauer & Feld. Dillard, the former head of Akin Gump’s energy transaction practice, says Latham’s Houston office has now grown to more than 50 transactional lawyers.
But despite the frenetic partner swapping, V&E chairman T. Mark Kelly, who says that his lawyers get calls from recruiters every day, isn’t worried about defections: “It forces you to be forever vigilant in what you do. There’s no room for complacency.”
More firms are on the way. Paul Hastings is planning on opening a Houston office in the first quarter of this year, the firm says. And industry insiders say that other firms, including Sidley Austin are sniffing around the city, too. (Sidley Austin did not return calls for comment.)
Is there enough work to go around? McGuireWoods managing partner Thomas Cabaniss thinks so. “There’s an awful lot of opportunity in Houston,” he says. “And besides, any good legal market is crowded.”
