After leasing space in Houston last month and working the lateral market, Reed Smith has announced it will officially open its first Texas office with 17 attorneys from seven different firms in the region.
Reed Smith spent several years looking for a merger partner in Houston — its typical expansion strategy — but after not finding the right fit and not wanting to wait any longer, the firm decided to look to the lateral market.
While many Am Law firms have launched in Houston with a handful of attorneys, Reed Smith held off on announcing hires until it had the critical mass it was looking for.
As Reed Smith has traditionally done when opening in a new market, the firm has sent an existing partner to live in Houston and help integrate the new location into the firm. Energy and real estate attorney David Thompson, the former head of Reed Smith's San Francisco office, has moved to Houston and is serving as the integration partner in the office.
Along with Thompson, 12 partners, three counsel and one associate have joined Reed Smith in Houston.
Global managing partner Gregory B. Jordan said there are associates who are expected to follow this group and the firm is also in discussions with a second wave of partners who are currently going through conflict checks. Reed Smith has a full floor available at its new location that can house between 37 and 40 lawyers and Jordan said he would expect that to be full by midyear.
The firm also has taken rights to another floor in the building that would allow it to house a total of 80 lawyers over the next year and has option rights to half of another floor.
While Reed Smith's energy practice — the fastest growing in the firm — was a big driver for its move into Houston, the firm has launched with attorneys in a number of its core practice and industry sectors. The Houston office will have energy, life sciences, litigation, financial and labor and employment attorneys.
Jordan said hiring attorneys from seven different firms definitely made the process more complicated. But he said it was deliberately so.
"We didn't want the office to be a spin-off office of any given firm," Jordan said.
Reed Smith was looking to hire the top talent in the core practice areas of the firm, he said. And the battle for talent is strong.
"It's the hottest lateral market in the world as far as I can tell," Jordan said of Houston.
He said there are more out-of-town firms flooding into the market than any other he was aware of. Jordan said he thinks lateral partners are making their decisions based on the strength and strategy of the firms entering Houston.
More than half of Reed Smith's largest clients have operations in Houston, the firm said, and many others do business there. Jordan said the attorneys joining the firm bring with them many common clients Reed Smith already does work for, particularly in the energy, life sciences and finance arenas.
There are six partners who are joining Reed Smith's Houston office in the energy practice. They are E. Lee Haag and Chris Watt from Fulbright & Jaworski; Paul B. Turner, formerly of Sutherland Asbill & Brennan; Craig R. Enochs and Daniel Nossa from Jackson Walker; and Charles "Stan" Perry from Haynes and Boone.
"Although Pittsburgh is at the center of the Marcellus Shale and Reed Smith is deeply involved in its development, many of the key decision-makers for the Marcellus resources are Houston-based," Jordan said in a statement as to why Houston was a key market for Pittsburgh-based Reed Smith.
Kenneth E. Broughton and Francisco Rivero, both formerly of Haynes and Boone, have joined Reed Smith's U.S. commercial litigation practice. Stephen E. Scheve, formerly of Baker Botts, joined Reed Smith's life-sciences health industry group.
Wanda G. Holloway joined the labor and employment practice from Seyfarth Shaw; Carol M. Burke, formerly with Pillsbury Winthrop Shaw Pittman, joined Reed Smith's financial industry group; and Robert R. Riddle joined the firm's IP practice from Baker Botts.
Paul W. Bishop of Sutherland Asbill has joined Reed Smith's corporate and securities practice as counsel. Rhonda R. Caviedes has joined the energy practice as counsel and Kevin M. Page has joined as an associate. Fazila Issa has joined the labor and employment practice as counsel.
Reed Smith's approach to entering the Houston market by handpicking laterals from various firms isn't a new one, though it does appear to be one of the largest such plays.
Paul Hastings opened in April 2012 with three attorneys from three different law firms. Around the same time, Sidley Austin hired seven lawyers from seven different firms to launch a Houston location, Legal affiliate The American Lawyer reported.
Since 2010, firms such as Blank Rome, Latham & Watkins, McGuireWoods, Simpson Thacher & Bartlett and Winston & Strawn opened in Houston. 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 the city. Latham, for example, grabbed groups of attorneys from three different firms while Winston & Strawn hired 40 former Howrey partners, according to The American Lawyer.
Earlier this month, K&L Gates opened a Houston office — the firm's fourth in Texas — with the hire of former Fulbright & Jaworski securities practice leader Charles L. Strauss.
Of the 100 largest law firms in Pennsylvania, Morgan, Lewis & Bockius, Cozen O'Connor, Blank Rome, Duane Morris, Jones Day, Littler Mendelson, Greenberg Traurig, DLA Piper and McGuireWoods all have had Houston locations. Reed Smith and K&L Gates can now be added to that list.
Reed Smith's Houston offices are at BG Group Place at 811 Main St.
The love between Pennsylvania and Houston is not a one-way street. A number of Houston-based firms have opened shop in Pennsylvania to capitalize on the Marcellus and Utica shale plays.
In December 2011, Houston-based energy law boutique The Sadler Law Firm opened an office in the Southpointe business park in Washington County, Pa.
In April 2011, Fulbright & Jaworski added six energy lawyers from K&L Gates to open its Southpointe office.
In September 2010, Houston-based Burleson LLP expanded its Southpointe office with a partner from Thorp Reed & Armstrong and several associates from Hogan Lovells, Meyer, Unkovic & Scott and Reed Smith.
Gina Passarella can be contacted at 215-557-2494 or at gpassarella@alm.com. Follow her on Twitter @GPassarellaTLI.
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