For partners in Texas considering a change, the time is now. After an unprecedented number of lateral partner movements in 2018, Texas continues to be a hotbed of activity.
There were a whopping 284 lateral partner movements in the AmLaw 200 in Texas in 2018. The majority of these took place in the first two quarters, following a fairly typical pattern in years past.
Dallas beat out Houston, with 127 lateral moves to Houston’s 108. In Dallas, the majority of these moves were in corporate practices followed closely by litigation. In Houston, corporate, energy, and litigation were the top three practices areas on the move.
The high number of lateral moves in 2018 were in part driven by several office openings, including Shearman & Sterling LLP in Austin, Katten Muchin in Dallas, Reed Smith in Austin, and White & Case in Houston.
2019 is not quite at the frantic pace of 2018, but is still a very active year for lateral partners. Nearly 100 Dallas partners have lateraled to date, with close to 90 in Houston
As we roll deeper into the fourth quarter, I expect lateral partner moves to pick up and carry over into the first two quarters of 2020 for several reasons:
- With a potential recession looming in the background, it is more important than ever for partners to make sure the platform they are on is the absolute best one for their practice and clients.
- The 1st and 2nd quarter are typically ideal times for partners to move after they have collected any holdbacks, true-ups, profit sharing or bonuses which are usually paid in the 1st or 2nd quarter. As a lateral move can take several months, the high numbers of lateral partners moving in the 1st and 2nd quarter are a result of conversations that started happening around now, in the 4th quarter. The logistics of getting several busy schedules aligned for meetings, the lateral partner questionnaire, conflicts, and executive/management committee votes all take time.
- A large number of AmLaw 200 firms have moved into the market in the past five years in addition to several Texas firms that have been involved with major firm mergers. These big changes continue to have a ripple effect for years as partners evaluate whether their rapidly changing firm continues to make strategic sense for their client base.
- Many partners with rate-sensitive practices are moving firms, particularly with patent prosecution and labor & employment. Regional or large firms with flexible hourly rates are using the opportunity to aggressively bulk up their groups.