'A Never-Ending Torrent': Increase in Law Firms Boosts Texas Office Market

BY BRANDI SMITH

As the number of corporate relocations to Texas continues to grow (there were 62 in 2021 alone), the companies aren’t just adding jobs in the Lone Star State. They’re attracting a large number of businesses and service providers.

One industry that has seen a surge in demand is the legal sector. Law firms are expanding their reach and setting up shop in major cities such as Houston, Dallas, and Austin.

Chicago-based national firm Hinshaw & Culbertson announced in February that it’s opening a Dallas office, the firm’s second Texas location, staffing it with consumer financial services attorneys with particular capability in mortgage servicing litigation.

"This addition of exceptional attorneys continues our strategic growth plan to support the firm's core industries and expands our ability to provide consistent, high-caliber representation of financial services providers nationwide," said Hinshaw Chairman Peter Sullivan.

Also expanding to Dallas, Boston-based national firm MG+M said the move will allow it “to better serve our national and Texas-based clients’ critical litigation needs.”

“This expansion formalizes our longstanding presence in the state and reinforces the value we provide to clients in handling their most critical and complex litigation wherever needs arise,” MG+M Chairperson and Partner John B. Manning said in a statement.

Those add to the nine out-of-state firms that expanded to Texas in 2022 and 14 in 2021.

Amicus Search Group, attorney recruiters with decades of experience, has been at the forefront of helping law firms break into the Texas market. The search firm helps firms recruit partners with books of business that align with their goals in Texas. They also represent Texas firms that are looking to grow their operations.

“It is a never-ending torrent,” said Lee Allbritton, Managing Partner at Amicus. “When I started in this industry 25 years ago, there were roughly 30 out-of-state firms with offices in Texas. Today, there are more than 100.”

He added that the trend has been mainly concentrated in Houston and Dallas, but Austin has emerged as a strong player in recent years.

What is driving this growth? There are several factors at play, according to Allbritton.

“Firms follow the money and the business transactions,” he explained, noting that Tesla, Oracle, Samsung, Hewlett Packard and Apple all recently made the move to Texas. “Since Texas has been a hub for corporate relocations over the past two decades, service providers, including law firms, are keen on following their clients to Texas.”

The cost of living is also relatively cheaper in Texas compared to coastal cities, as is property. That’s drawing talent to Texas and law firms are following.

“Many young, smart and bright lawyers want to live in Austin,” Allbritton pointed out. “The pandemic has accelerated this trend, making remote work a viable option for many.”

Lifestyle isn’t the only reason for firms expanding or relocating in Houston and Dallas. Instead, Allbritton said the energy, healthcare, private equity, investment fund, real estate and technology sectors in the state’s largest cities are creating jobs and driving growth.

“The state's population has nearly tripled in my 55 years,” said the native

Texan. “The influx of people and businesses isn’t slowing down any time soon.”

The office market is seeing a ripple effect. As these firms add personnel throughout Texas, they need space to house attorneys and support staff.

“These are commercial Class A space in city centers,” Allbritton said.

Just as so many other industries have been, law firms were affected by the pandemic. The result was an increased use of “hoteling.” Instead of having an assigned desk or office, employees instead reserve workspace as needed. This means that employees can choose from a pool of available workstations, meeting rooms, or other shared spaces when they come into the office, rather than having a fixed space that they occupy every day.

Hoteling is often used by companies that have a significant number of remote or mobile workers or that want to reduce real estate costs by maximizing the utilization of office space. It can also provide greater flexibility for employees who need to work in different locations or who have variable schedules. In addition, hoteling can be used to foster collaboration and interaction among employees who may not otherwise work together regularly.

“The trend that I've seen with my clients in the past year has been a definite and significant return-to-the-office policy,” said Allbritton. “You can’t learn to be a lawyer remotely. You have to interact. You just can’t do that remotely.”

Because of that, he believes law firms are a net benefit to the office market.

“They actually need space. They want space. They want their people to come back to work,” Allbritton said.

As the growth in Texas continues to attract businesses and service providers from all over the country, law firms will continue to expand their reach by setting up shop in major cities across the state.