Marcus Brooks, a shareholder in the Austin office of Winstead
Marcus Brooks, a shareholder in the Austin office of Winstead (Joel Salcido)

No matter what the state of the economy is, moving to a new law firm can be a risky business. That’s why Marcus Brooks studied Winstead for more than a year before joining the firm’s Austin office as a tax shareholder.

“Most lawyers, by nature, are risk averse and want to make sure the next situation is going to be a long-term fit,” Brooks said.

A legal recruiter approached Brooks in 2012 because Winstead was looking to expand its tax practice in Austin, he said. But Brooks was happy as a tax partner in Naman Howell Smith & Lee in Waco.

“It is a big deal,” he said. “If you’re going from one good situation to another one, it’s tough.

“I requested general firm financials, financial information for all of the shareholders, equity income; and they requested information on my previous billings, book of business and compensation,” he said.

After talking with more than 20 Winstead lawyers and holding many meetings, Brooks joined the firm in October 2013. He said Winstead has strong tax and corporate practices and other expertise he can offer clients.

Brooks made the lateral move during a down year for lateral hires at Texas’ largest firms.

Eighteen of the state’s 25 largest firms participated in Texas Lawyer’s Lateral Hiring Survey and reported hiring 14.1 percent fewer lateral attorneys—249 versus 290—than they had in 2012.

Brooks is in rare company. He is one of only 59 shareholders or partners hired laterally by the large firms in 2013, compared with 74 lateral partners the same firms hired in 2012.

Including Winstead, only five of the firms—Baker Botts, Gray Reed & McGraw, Kelly Hart & Hallman and Porter Hedges—hired more lateral partners in 2013 than they did the previous year. (See chart,” Lateral Hiring at Large Firms in Texas” .)

There are three possible reasons the large firms made fewer lateral moves in Texas during 2013, said firm consultant Bill Cobb of Houston. Some of the laterals hired during 2010, 2011 and 2012 may not be integrating successfully at their new firms, so the firms have slowed lateral hiring; associates at the firms are pushing for partnership consideration rather than having the firm hire lateral partners; and an influx of out-of-state firms opened or expanded Texas offices during 2013 by recruiting groups of partners from Texas firms, he said. [See " Embracing Change; Looking Back at Lateral Moves in the Lone Star State in 2013," Texas Lawyer, Dec. 16, 2013, p. 1.]

New Firm Footprints in Texas

Out-of-state firms finding new footholds in Texas were among the firms Jeff Weems looked at when he began considering leaving Harrison Bettis Staff McFarland & Weems, a firm he had started with friends in 2001. The firm, now known as Harrison Bettis McFarland, is a litigation-only firm.

“I think the world of all those guys. They are my good close friends,” Weems said. “I just realized I needed to be able to offer my clients more than just the litigation services that I offer.”

Weems used a legal recruiting firm and explored, during a four-month period, the possibility of laterally moving to 10 firms.

“It was a little bit numbing for a while,” Weems said. He interviewed with eight firms he declined to name, including out-of-state firms.

“I hadn’t done this for so long, so I really wanted to get a feel for what the market was and what was going on,” he said. “I also have to say I wasn’t set on leaving. I had not made up my mind to leave. It was more I was looking around to see if there was some place that matched up—in my mind at least—of where I needed to go.”

Maintaining control over decisions regarding his clients, such as billing rates and staffing for a case, was important to Weems. He found a good match and joined Porter Hedges in Houston as a litigation partner in July 2013.

“One of the things that I really fell in love with, and am enamored with to this day, is the depth and breadth of the energy practice here,” he said.

Most of Weems’ clients are energy companies.

“One of the things I liked about Porter Hedges was that I spoke with just about every partner before I came over here,” he said.

“Many of us here worked with Jeff for a long time,” said Harrison Bettis partner James Bettis. “He’s a very good friend and a great lawyer. We wish him the best of luck.”

Weil: Changes and Attrition

The overall attrition rate (the percentage of lawyers leaving a firm) during 2013 at the 18 firms was 11.7 percent compared with 12.6 percent in 2012. Weil, Gotshal & Manges, with a loss of 67 lawyers during the year, leads the pack of large firms with an attrition rate of 54.6 percent. The New York-based firm announced plans in June to de-emphasize its complex commercial litigation practice and laid off 60 associates and 110 staff members firmwide. [See " Weil Cutting Associates, Adjusting Partner Compensation," Texas Lawyer, June 24, 2013, p. 1, and " An Update on the Exodus From Weil in Dallas," Texas Lawyer, Oct. 21, 2013, p. 1.]

The Weil announcements and resultant upheaval in the firm’s Houston office drove Nic Barzoukas, then a Weil patent litigation partner in Houston, to consider making a lateral move.

“At the time I wasn’t very happy that Weil was laying off general litigation associates,” he said. “I had grown weary of being in a Weil branch office. I basically made up my mind that I was not interested in being in a branch office anymore.”

When Weil announced its changes, several lawyers contacted Barzoukas, including a good friend and Baker Botts partner, Paul Morico.

“He gave me a call, and we went out to lunch, and we just talked,” Barzoukas said. “As I talked to him and to more people, I slowly came to realize what a great group Baker Botts had put together without me even noticing.”

An open management style, billing rates and how a firm handles debt were important issues for Barzoukas.

“I was very impressed with the group of partners and associates. It became a no-brainer,” he said.

“We are actively looking for lateral partners in Texas on the corporate and litigation sides,” wrote Amy Deschodt, Weil’s associate director of communications in New York, in an emailed response to questions about the firm’s Texas departures and future plans.

No Book of Business

Coming from an in-house position, Andrew Rosell did not have the usual book of business firms require of lateral partners. He joined Kelly Hart & Hallman in Fort Worth as a corporate and securities partner in April 2013. The only usual characteristic about Rosell, as a lateral hire, is that he is in the top practice area for lateral hires at Texas firms during 2013. (See chart, ” Lateral Hires’ Practice Areas .)

Rosell had been the general counsel and chief compliance officer at investment management firm Kleinheinz Capital Partners Inc. in Fort Worth when principal John Kleinheinz decided to retire. The company went private and no longer needed full-time in-house counsel.

Rosell decided to return to private practice. He had worked at Akin Gump Strauss Hauer & Feld before joining Kleinheinz.

Rosell said he spent four months talking with firms about building a business representing traditional wealth managers, private investment fund managers, private equity fund managers and real estate fund managers. He was familiar with the lawyers at Kelly Hart because he had used the firm as outside counsel when he was in-house.

“I knew a lot of the firm,” he said. “I developed a business model, and we talked about it.”

Kelly Hart had the expertise in areas such as tax and corporate that Rosell needed to complement the practice he wanted to build based on his expertise in regulatory matters, due diligence and corporate structuring.

Rosell’s former company was his first client.

“That was the first piece of my book, but it was not a big book,” he said. “I’m building a business and having a lot of fun doing it,” he said. “Kelly Hart took a chance and had confidence in me, and it’s worked out for both of us. It’s been very workable, and it’s still early, but it’s showing quite a bit of success.”