Lateral hiring in Texas has intensified as more out-of-state firms move into the state.

 

Dallas-based Gruber Hail Johansen Shank is shuttering its doors—a move prompted by the state’s hyperactive lateral market and the subsequent decision by many of its lawyers to depart for other firms.

Mark Johansen

“Gruber Hail Johansen Shank has made a decision to unwind the firm,” partner Mark Johansen said in a statement on Tuesday. “We had a lot of success and a great run but given the current market for lateral partners with the national firms and regional, full-service firms, the equity partners decided it was an opportune time to explore other options.”

Michael Gruber, who co-founded the firm in 2006, joined Dorsey & Whitney on Monday as a partner in the firm’s trial group in Dallas. On April 9, Mark Shank joined Diamond McCarthy in Dallas as a senior counsel. Johansen said he is considering several opportunities at national and regional firms and expects to make a decision very soon. Brian Hail, the other name partner, also said he is considering opportunities at national and regional firms and litigation boutiques and will also decide in the near future.

Brian Hail

Johansen said the state of the Texas legal market in 2018 prompted the decision to close the firm. With numerous out-of-state firms opening offices in Dallas and elsewhere and firms of all sorts seeking to hire laterals, the firm’s partners decided it was time to consider their options.

“We all recognize there were market opportunities that we ought to consider, either collectively or individually. It was a market-driven decision,” Johansen said.

Gruber said in the past, many lawyers at boutiques and smaller firms in Dallas largely ignored calls from headhunters and the national firms moving into the market. But that changed last year. He said he decided to look around after talking with friends who reported they had positive experiences with national firms.

Michael Gruber

Gruber said he considered a number of firms but decided Dorsey & Whitney was the best fit for his trial practice because of the support it could provide for large litigation and for client. He also liked the firm’s view of value-based billing. The firm has “good, solid rates” and a commitment to value, he said, as opposed to some firms he talked to that pitched him with the opportunity to charge a market-leading rate.  “I don’t want that,” Gruber said.

Gruber, who does commercial litigation and represents bankruptcy trustees in litigation as well as high-wealth individuals in probate matters, said he had been turning down some work lately because of the smaller size of Gruber Hail. The move to Dorsey & Whitney, which opened its Dallas office in 2017, will solve that issue, he said.

Gruber started thinking about a move to a larger firm about a year ago, but he was finally pushed to make the move when three partners and two associates left in February to form a litigation boutique. He also realized it was time to make a change because there was an increasing need to associate with other firms to handle big matters.

“The last several months, it really hit home. We did have some of our really great young partners start their own firm, which I appreciate. I did it a couple times. It just created an opportunity for the rest of the partnership to get together and decide what to do,” Gruber said.

He said his clients include Pappas Bros. and Front Burner Brands.

Mark Shank

Shank said he moved to Diamond McCarthy because of its trial practice and also because of the chance to practice again with old friends Darrell Jordan and Mark Sales, whom he knew from the Dallas firm Hughes & Luce.

Shank, who does commercial litigation, labor and employment litigation, and arbitrations and mediations, said his clients include Cro Holdings, Therapy 2000 and Capital Metro.

Gruber Hail was founded in 2006 when Gruber and a number of lawyers split from the firm known as Godwin Gruber to form Gruber Hurst Johansen & Hail. The trial boutique grew in 2015, when the Dallas litigation firm, then called Gruber Hurst Johansen Hail Shank merged with Elrod PLLC, forming a 30-lawyer trial firm known as Gruber Hurst Elrod Johansen Hail Shank.

Since that expansion, the firm has seen some departures. In 2016, Michael Hurst left with six other lawyers and joined Mike Lynn’s civil litigation firm in Dallas, with that firm changing its name to Lynn Pinker Cox & Hurst. In 2017, David Elrod and three other lawyers moved their energy litigation group to regional firm Shackelford, Bowen, McKinley & Norton.