Why Dallas is a Big Law Firm City
Big Law firms are attracted to Dallas for the region’s robust economic landscape, diverse cultural offerings and a complex legal environment.
A Busy Economic Hub
Dallas boasts the second largest concentration of Fortune 500 companies in the U.S., behind only New York City. With many Fortune 500 companies headquartered in the city, both large and small law firms have an abundance of opportunities to service their clients and prospective clients. The population of Dallas is expected to double by 2050, putting more people in need of goods and services. As new people flock to the growing city, businesses are going to be needed to support them. Large law firms can either represent the companies that are expanding into Dallas or the businesses providing goods and services to the residents of the city.
A Cultural Hub
If the business center in Dallas wasn’t enticing enough for big law firms, the city’s cultural scene provides an additional perk. Dallas is home to the largest urban art district in the U.S. and the largest contiguous arts district in the world.
Dallas is the 4th highest ranked city in the nation with the highest physical stores reported. Also, the city has the fourth highest spending power in real estate development nationwide. There are more than 2 million square feet and 400 acres of shopping centers, hotels, restaurants and a new mixed-use; office-retail-residential community under construction on 75 acres .
Dallas is home to the largest urban arts district in the United States, as well as the largest contiguous arts district in the world. Fifth Avenue Partners in 2011 opened a $175 million shopping and dining center next to the 1980s-built city-owned convention center. In addition, developer Billingsley Co. has constructed The Star, a new $1.5 billion mixed-use development just down the road with residences, office buildings, shops, and restaurants. The Dallas Cowboys have also called The Star its headquarters. Spencer Stuart said in 2016 that talent pours into Dallas from cities with more expensive living costs. The Dallas area offers many amenities in a lower-stress atmosphere.
A Legal Climate to Match
Dallas enjoys a diverse legal climate with many firms specializing in a variety of litigation and transactional work. There are more than 90 general and specialty law firms in the Dallas area alone, making it easier for firms to find the right talent and practice in their desired field. Industrial Bank of Japan (IBJ) brought its business to Dallas in 1987, and since then over 200 Japanese businesses have opened in the area. With over 40 existing firms, the Dallas market has seen a surge in Asian firms in recent years. Dallas has become a center for Chinese, Japanese, Korean and Taiwanese firms who are eager to establish a U.S. presence.
Top Big Law Firms in Dallas
Dallas’ expansive legal market is as big as it gets. As the premier commercial and cultural hub in the fourth largest metropolitan area in the U.S., it’s little wonder that so many of the top Big Law firms have a home in this Texas city.
Below is a closer look at some of the country’s tradition-bearers of Big Law, who have expanded over the years into full-service professional services with office locations across the United States and around the world.
Kirkland & Ellis
The Chicago-based Kirkland & Ellis, which tops practically all of the recent legal rankings, has a significant presence in Dallas with 70 attorneys. The Dallas—I mean, DFW—office was founded in 1998 and is fully integrated within the firm. It stands apart from other cities in which the firm has offices, which are generally satellite locations.
K&E ranks among the top Dallas law firms, standing out for its private equity, mergers and acquisitions and securities practices, which is not surprising given the fact that it was recognized in this year’s Chambers USA rankings as the standout market leader nationwide in these areas.
Baker Botts
A true Texas legacy firm, Baker Botts traces its roots to W.W. Baker, who launched his law practice in 1840.
Today, the firm represents a wide variety of clients in the public and private sectors, from corporations, partnerships and joint ventures to banks, trusts and charities. Baker Botts has more than 700 attorneys in their Dallas office and practice in more than 13 different areas including tax, energy, intellectual property, corporate, labor and employment.
Winston & Strawn
Winston & Strawn are the newest members of the AmLaw 100, having recently ranked No. 54 on the 2016 list. The firm opened their Dallas office in July 2015, and they’ve been getting a lot of recognition since.
According to Winston, its lawyers have already collectively handled cases in various arenas such as tax, intellectual property, antitrust, product liability, white collar defense and litigation.
Sidley Austin
One of the largest law firms in the world, Sidley Austin has 220 attorneys in Dallas and more than 1,900 firmwide.
The firm offers a wide range of services such as corporate governance, financial services, intellectual property, labor & employment, litigation, project development and finance, real estate, tax, bankruptcy and restructuring, life sciences, and white-collar crime & government investigations.
Andrews Kurth Kenyon
Founded in 1902, Andrews Kurth is a fully integrated international with more than 30 lawyers in their Dallas office.
Andrews Kurth was formed by the merger of four well-known Texas firms: Andrews & Kurth LLP, Neeland Lee Bender Berstling, Moeller, Parker & Huggins and Streetman, Hammond, perhaps the most illustrious of the group as its founder, John Lind Streetman, served as counsel for the Standard Oil Company of New Jersey during the infamous 1906 Texas antitrust suit.
Though the firm has multiple established practices and industry groups, Andrews Kurth is best known for its energy, capital markets and corporate finance, and environmental law practices.
Big Law Firms in Dallas by Services
Big law firms in Dallas provide a broad spectrum of legal services ranging from corporate and commercial transactions to regulatory compliance, litigation, and alternative dispute resolution. These multi-practice firms service both national and international clients, providing counsel on the full gamut of legal matters including intellectual property, real estate, energy, labor and employment law, tax, international trade, and family law.
Corporate law is one of the primary services offered by these large firms. They advise clients on corporate structuring, mergers and acquisitions (M&A), joint ventures, corporate governance, and compliance with federal and state laws. Prominent trends in this area of practice have included the increasing complexity of cross-border M&A activities and the significant role that technology continues to play in the corporate space.
Litigation is another cornerstone of big law’s practice in Dallas. These firms handle a variety of civil and commercial litigations, including personal injury, wrongful death, class actions, product liability, oil and gas, and consumer protection cases. Many large firms also have teams specializing in alternative dispute resolution, which helps parties resolve their disputes without costlier litigation.
While real estate law is a broadly recognized service, the big law firms offer particular strength in this area. They handle complex transactions such as financing, development, leasing, acquisition, and sales of residential, commercial, industrial, and retail properties. Also included are environmental, property tax, and right of way issues in connection with real estate acquisitions.
Further by way of example, there are those who specialize in energy. The unrivaled scope and depth of the firm’s resources and services form effective, reliable strategies for oil and gas clients active throughout the energy spectrum.
There are ten to twenty all-rounders in Dallas. They specialize in various fields as needed. It amounts to a highly competent bunch.
Impact of Big Law Firms on the Dallas Economy
The impact of big law firms on Dallas’s economy cannot be understated. They are significant players in nearly every area of the local economy. Big law firms create thousands of jobs, support a robust network of other local businesses that cater to and work with them, and are an essential element of the local charitable fabric.
Most commonly, big law firms create jobs from hiring attorneys and other professionals. On the junior end, firms are hiring associates out of school, and if those associates are able to handle the stress, they may have significant upward mobility in the firm. Even if an associate doesn’t make it, those junior positions are needed to help manage the workload. Firms also hire secretaries, IT personnel, and administrative support at varying levels. This has a true impact across the metroplex. For example, AMLS has a large network of Dallas staffing agencies that focus on legal recruiters (both for contract and perm placements), which may be utilized by these firms as they require staffing. Also, many law firms in North Texas help to bring talent to Dallas to meet their staffing needs. Those people who relocate to Dallas will spend lots of money at local businesses (such as grocery stores, Wal-Mart, restaurants, Target, office supply chains and furniture stores). Furthermore, those businesses now have more income in their local economy . Additionally, big law firms typically help to support those businesses who support them, using local printers, couriers, catering companies, etc.
Apart from the direct job creation from big law firms, these firms pump a massive amount of money into the local economy. For example, big law firms require office space, copy paper, toner, attorneys, secretaries, paralegals, janitorial and security staff, shredding services, general repair and maintenance services like HVAC and plumbing, furniture, hardware, occupational licensing, pest control, parking garage attendants (many of these are outsourced), concierge services, office supplies, coffee service, Internet service and utilities (to name just a few). To the extent they hire outsiders to provide some of these services, that outsourcing generates businesses and jobs for other local businesses.
Lastly, big law firms make substantial contributions to the charitable community by donating to and working for various endeavors in the community. This is often done through their foundations, but also through sponsorships, event participation, employee participation, and legal work. In addition to public good, this also often means that many individuals who work in these firms will often donate back to the local communities when they leave or through other efforts.
The Influence of Big Law Firms on the Future of Dallas
A range of economic and social factors are shaping and reshaping how big law firms compete and grow. Demands for more diversity in legal work and changes in technology to level the playing field area among smaller, niche practice groups are changing the landscape for big law firms in Dallas. For example, while the economy continues to grow, high demand for top talent and low unemployment means that big law firms in Dallas may need to consider more aggressive recruiting strategies to attract the talent they need. This trend is one that big law firms have been dealing with for a number of years and it is showing no sign of slowing down.
Another economic and demographic factor that is changing big law firms is the diversification of the Texas legal market. The second largest market in the U.S. by both population and gross state product, Texas is an increasingly attractive location for firms large and small, adding to the already diverse legal industry in the state. Although this presents more competition for top legal talent, it also opens the door for more attorneys trained in niche practice groups and legal specialties such as entertainment law and securities litigation to find placement within a larger firm.
Parallel with this diversification of legal practices and specialties is a more open and demanding attitude towards diversity within the legal profession. There’s a broader push for top legal firms to provide a more diverse workplace — in terms of race, gender, age, sexual orientation, and philosophy. In turn, clients are also demanding diversity within the legal teams they work with and actively seek diversity in their legal representation. As such, a focus on hiring and maintaining a diverse workforce is certainly a trend to have on the radar for big law firms in Dallas.
Lastly, a trend emerge for big law firms is a focus on the competitive advantage of technology. Modern big law firms in Dallas are wisely looking for ways to make use of new and better technologies to serve their clients. At the same time, outside pressures, including the rise of artificial intelligence, the possibility of a drop in billable hours, and market consolidation are driving traditional law firms to look for ways to cut costs, reduce service fees, and remain competitive. New technology, either through the automation of client facing portals or fixed fee services, help big law firms provides a lower cost of business while increasing efficiency.
How to Choose a Law Firm
When determining which Big Law firm is best suited for your particular situation, there are several important factors to take into account. A thorough analysis is key when it comes to matching your needs with office locations, practice groups, and other key components of a firm’s infrastructure.
Location
With an abundance of highly regarded offices in some of the nation’s biggest cities, you may be surprised to learn that many of the top law firms have multiple offices located in Texas. Those who practice corporate law or who require outside counsel in another practice area may benefit from familiarity with a particular firm’s local presence. Geography is only one factor among several.
With Texas’ growth in diverse metropolitan areas such as Dallas, Houston, Austin, and San Antonio, location is becoming more important. The firm’s location may be more relevant when potential issues require face-to-face meetings at the law firm’s premises. You may consider the level of urgency for such in-person meetings when selecting a law firm. Also, some firms do not require face-to-face meetings, while others prefer such meetings.
Practice Group/Expertise
Understanding who is providing proof points at a prospective firm’s Dallas office can help you evaluate the likelihood of an effective attorney-client match. For example, better Bonds expertise is often available on Commercial Real Estate deals. A client should look to speak with a firm’s Practice Group Head or Administrative Partner to determine the competitive edge provided by a practicing attorney in a given field. The client will want to leave with a clear understanding of the top three or four attorneys at a firm whose expertise is equaled or exceeded in the lawyer’s respective practice area by those at a selected law firm. The most effective Big Law firms often have a competitive advantage due to specialized expertise; this advantage must be preserved and communicated to clients. Clients should ask for a firm’s latest competitive analysis in a practice area to understand how a lawyer’s expertise is relevant within the appropriate context and scope.
Capabilities and Support Infrastructure
A potential client should consider both the economic formula employed by a law firm and the associate-to-partner ratio to determine whether a selected firm may provide a more or less efficient billing model , i.e., a differentiated formula is less likely to produce an overall lower cost than a standardized hourly billing model. A firm will eventually need to justify its overall economic model.
The associate-to-partner ratio is a statistic that some conglomerates are tracking. A high ratio indicates a less-efficient firm, and one that may be expected to charge a higher hourly rate to a client, but higher ratios are often associated with a more "hands-on" approach to client projects. In other words, a higher ratio often indicates more legal assistant and paralegal involvement.
Given the significant increase in associate and legal assistant salaries, some firms have attempted to reduce growth by hiring fewer (but more efficient) associates and paralegals. The conundrum for larger firms is that it can take years to train associates, which is costly to a firm, and without the right people doing the right tasks, this creates a challenging internal conundrum. Smaller firms tend to hire associates as their practices grow or as unique needs arise. In addition, most firms have some variation in their ratio of senior-level to junior-level attorneys, the percentage of equity versus non-equity partners, and the average age of their partnership, or the combination of these ratios. A high number of unsenior partners and a low ratio of senior partners to junior partners may not be consistent with a firm’s growth and corporate culture.
