State of the Dallas Market 2020 Forum

[Anonymous User]

It has been a while since this thread last discussed the state of the Dallas legal market, especially given the influx of national firms moving in. Since the focus of Dallas seems to be transactional, what do the tiers shake out as now?

[Anonymous User]

I can't speak to other firms but Weil is busy. Our deal flow is high quality and mostly non-restructuring (but I'm sure there will be more restructuring deals later this year). Also, no salary cuts.

[Anonymous User]

The old Texas firms are going downhill fast. Baker Botts cut salaries and deferred incoming associates to January. V&E also deferred incoming associates to January. Neither firm has announced extra stipends for the affected associates. These are not the actions of financially healthy firms.

The current tiers look like this:

Tier 1: KE, Weil

Tier 2: Gibson Dunn, Jones Day, Sidley, Winston

Tier 3: Akin Gump, HayBoo, Thompson Knight, VE

Tier 4: Baker Botts, Bracewell, Hunton Andrews Kurth

Tier 5: Fulbright, Gardere, Jackson Walker, and the rest

[Anonymous User]

The old Texas firms are going downhill fast. Baker Botts cut salaries and deferred incoming associates to January. V&E also deferred incoming associates to January. Neither firm has announced extra stipends for the affected associates. These are not the actions of financially healthy firms.

The current tiers look like this:

Tier 1: KE, Weil

Tier 2: Gibson Dunn, Jones Day, Sidley, Winston

Tier 3: Akin Gump, HayBoo, Thompson Knight, VE

Tier 4: Baker Botts, Bracewell, Hunton Andrews Kurth

Tier 5: Fulbright, Gardere, Jackson Walker, and the rest

I’m not sure I would put Weil/KE a tier above Gibson, Sidney and Winston. Maybe they have an edge given their restructuring platforms in a recession but those other national firms are definitely comparable.

The trouble with a tier list like this is that Dallas is fundamentally a different market than somewhere like Houston. In Houston, you have a good number of large offices all competing for that local energy work and it’s relatively easy to rank who is winning that business. Dallas has a robust economy but it’s more diverse and most of the local deals are more middle market and don’t necessarily support the NY rates of these national firms. So corporate departments are generally smaller and I think tend to work more with other offices. I think national firms like having a presence in Dallas because there are those deals at the top of the market and it is a good place for legal talent and the comp goes a long way, which may help with associate retention. Associates looking to go in house in Dallas could be looking at 50%+ pay cuts coming from the national firms.

I think it will be interesting what happens with the split in comp between the national/Texas-based firms in the aftermath of COVID. Pre-COVID, it seems like a lot of the Texas firms could keep up with base salary and maybe raises but bonuses would be more hit or miss and tied to hours. The national firms have lockstep raises and bonuses (some with no hours requirement) and I think if the Texas firms fall behind in comp, it will begin to be harder to turn down a national firm offer for a Texas based firm.

[Anonymous User]

Recent grad heading to one of those falling-behind old Texas firms and very disappointed. Am seriously considering mass mailing firms that are in better shape. Is that even possible at this time? Will those other firms even consider my app? I'm lit and have a clerkship lined up for a later term.

[Anonymous User]

Thoughts on Thompson knight, Hayboo and katten?

[Anonymous User]

The old Texas firms are going downhill fast. Baker Botts cut salaries and deferred incoming associates to January. V&E also deferred incoming associates to January. Neither firm has announced extra stipends for the affected associates. These are not the actions of financially healthy firms.

The current tiers look like this:

Tier 1: KE, Weil

Tier 2: Gibson Dunn, Jones Day, Sidley, Winston

Tier 3: Akin Gump, HayBoo, Thompson Knight, VE

Tier 4: Baker Botts, Bracewell, Hunton Andrews Kurth

Tier 5: Fulbright, Gardere, Jackson Walker, and the rest

I'm not defending BB & V&E, because deferring without a stipend is terrible, but many financially healthy firms have deferred incoming associates without an extra stipend (STB, for example). It could be partner greed more than anything.

I have heard from multiple people with knowledge of the Texas legal market that BB is having issues, though, and they have been noticeably cheaper than other Texas firms during COVID ($10k for summer associates, paycuts, etc.).

[Anonymous User]

The old Texas firms are going downhill fast. Baker Botts cut salaries and deferred incoming associates to January. V&E also deferred incoming associates to January. Neither firm has announced extra stipends for the affected associates. These are not the actions of financially healthy firms.

The current tiers look like this:

Tier 1: KE, Weil

Tier 2: Gibson Dunn, Jones Day, Sidley, Winston

Tier 3: Akin Gump, HayBoo, Thompson Knight, VE

Tier 4: Baker Botts, Bracewell, Hunton Andrews Kurth

Tier 5: Fulbright, Gardere, Jackson Walker, and the rest

I'm not defending BB & V&E, because deferring without a stipend is terrible, but many financially healthy firms have deferred incoming associates without an extra stipend (STB, for example). It could be partner greed more than anything.

I have heard from multiple people with knowledge of the Texas legal market that BB is having issues, though, and they have been noticeably cheaper than other Texas firms during COVID ($10k for summer associates, paycuts, etc.).

Do you know if they’re saying this because of BB’s austerity measures or some other knowledge?

[Anonymous User]

The old Texas firms are going downhill fast. Baker Botts cut salaries and deferred incoming associates to January. V&E also deferred incoming associates to January. Neither firm has announced extra stipends for the affected associates. These are not the actions of financially healthy firms.

The current tiers look like this:

Tier 1: KE, Weil

Tier 2: Gibson Dunn, Jones Day, Sidley, Winston

Tier 3: Akin Gump, HayBoo, Thompson Knight, VE

Tier 4: Baker Botts, Bracewell, Hunton Andrews Kurth

Tier 5: Fulbright, Gardere, Jackson Walker, and the rest

I'm not defending BB & V&E, because deferring without a stipend is terrible, but many financially healthy firms have deferred incoming associates without an extra stipend (STB, for example). It could be partner greed more than anything.

I have heard from multiple people with knowledge of the Texas legal market that BB is having issues, though, and they have been noticeably cheaper than other Texas firms during COVID ($10k for summer associates, paycuts, etc.).

Do you know if they’re saying this because of BB’s austerity measures or some other knowledge?

Without saying too much.. people I have spoken to are not saying this as outsiders whose only knowledge of BB's austerity measures is from TLS/Reddit/ATL/etc., if that's what you mean.

[Anonymous User]

Recent grad heading to one of those falling-behind old Texas firms and very disappointed. Am seriously considering mass mailing firms that are in better shape. Is that even possible at this time? Will those other firms even consider my app? I'm lit and have a clerkship lined up for a later term.

I wouldn't stress this - you're in a relatively great position just to have a biglaw job even if the start is delayed. My firm probably wouldn't consider any applications for recent grads. You'll have much better luck switching firms with a year or two of experience and when all this COVID stuff is behind us.

Mass mailing firms likely wouldn't hurt but if it were me I'd personally avoid it - wouldn't want to risk the fact that I'm looking to get back to my firm (though that risk may be remote). Also I doubt firm recruiters would remember but if you end up applying 6-12 months down the line, it might not come across great that you just blanketed your resume across town just a few months earlier.

[Anonymous User]

Not as up on Dallas, but in Houston I think V&E is much healthier than BB. There's been a lot of defections from BB, and they are no longer in the running for most larger deal work, but I think v&E is still in contention with the national firms.

Fulbright is a bit of a sad case. They were right up at the top (at least for lit), but all of their hot shots left, leaving a bunch of second rates and old folks resting on their laurels. I don't think the NR merger was catalyst- it was already starting to happen.

The decline of the Texas firms is in some way overdue. Way back in the day (1980s), Texas banking was local. You pretty much needed a local firm to do a larger deal that touched Texas because they had all the relationships with the local banks. Many clients sent almost all their work to a favored firm. The collapse of the Texas banks in the 80s and subsequent nationalization meat that Texas firms without strong NYC presence were sitting ducks. V&E was the only firm that really noticed this and tried hard to get a foothold there in the 1990s and early 00s, with some measure of success, though not the level of firms like Latham. BB tried to keep doing things the way it always had and Fulbright was still expecting litigation to pay the bills. I suppose old habits die hard on the client side, as the departure from the old firms as default "go-tos" was a slow steady erosion that took decades- some of that likely because it took until the early 00s before the national firms started to realize that the Texas firms were sitting ducks. We are now about a generation removed from the old days, and I think what's happening is that those who began their career in the days of the big 3 are now retiring, leaving a younger generation that has little veneration for the old local heavy hitters.

That said, I think the status of the national firms will remain in flux. Some national firms have had a lot more success than others (compare Skadden to Kirkland). I'd be wary of just chasing the latest "firm de jour". Make sure it's a good fit, not just the top of the league tables.

[Anonymous User]

The previous post about tiers is pretty flawed. Writing mainly from a corporate perspective.

Bracewell - Dallas office is only 20 lawyers, and has been in decline. No idea why anyone would work there, unless they have no other choices.
HAK - Doesn't seem to have much of a corporate group. AK corporate group left and created Katten office after merger announcement.
Jones Day - Entire corporate group just left to start the Shearman & Sterling office. It is my understanding that the office is half the size that it was 10 years ago. No idea why anyone would want to go to a firm that uses blackbox compensation if they have other offers.
V&E- Of the TX firms, V&E has positioned itself very well. It is the only TX firm still competing with the top national firms and I think it will stay that way. Definitely has the heaviest amount of oil and gas of the Dallas corporate groups. Still has a very strong litigation group.
Shearman & Sterling - office opened in the spring. Brough over the entire Jones Day corporate group, several of TK's top corporate partners, along with some Baker Botts partners, and a V&E senior associate.
Winston & Strawn - strong office, but strength is mainly in litigation. Corporate group is made up of former Locke Lord attorneys along with a smattering of attorneys from other mid-tier firms.

Corporate Bands
Band 1: Gibson, K&E, Sidley, Weil, V&E
. . . Big Gap . . .
Band 2: Akin Gump, Shearman & Sterling
Band 3: Baker Botts, Haynes & Boone, Thompson Knight, Winston & Strawn
Band 4: Foley Gradere, Jackson Walker, Katten, NRF

[Anonymous User]

[message deleted]

[Anonymous User]

Weighing full time offers in Dallas between a Texas based (TK/HayBoo) and national firm in Dallas (Kirkland/Katten). Desire to practice in a corporate group, looking for good work life balance/partnership prospects. Advice?

I'm a midlevel associate in Dallas at a national firm (but not K&E/Katten). I don't think any of these is a clear winner. You've interviewed with each recently so you should have a good sense of which may be the best fit.

For me, I thought TK/HB would be the ideal outcome out of law school but ended up not getting an offer from either office. My firm ended up being a good fit so it worked out. I've had colleagues that lateraled over from Texas firms and they seem really competent. Sounds like they got the opportunity to cut their teeth on a lot of smaller deals, which can be great experience your first couple years.

I've found that there is not much difference between a $30 million / $300 million / $3 billion deal and the skill set scales up relatively well. If anything the smaller deals are a bit messier because everything is material and it may be founder-owned. Over $100 million, the target is more likely to be private equity sponsored already so those tend to be cleaner for diligence and the negotiations more straightforward with two sophisticated parties. I've actual found $1 billion+ deals to be some of the most straightforward from an associate perspective because a lot of the tedious diligence is out of scope because it's immaterial and partners tend to be very hand on with the main deal documents so you have a lot of guidance. The flip coin of that is you might not be allowed to touch the main documents in larger deals until you are more senior, so smaller deals can be better to gain experience.

All that to say, as a junior associate, I wouldn't put much weight on the "prestige" of the deals. I'd put more value on a group with a collaborative culture where it looks like you'll get good mentors and training. And then have confidence that you are building a skill set that could scale up to larger deals if you want to lateral to a national firm.

I'd also put a premium on financial health given COVID but I think that's too hard to judge to really make an informed decision on that basis unless there are clear publicly disclosed red flags.

[Anonymous User]

This thread has been incredibly helpful! Does anybody have thoughts similar to the above ranking for corporate groups, except focused on litigation groups? Thanks!

[Stillblade]

The old Texas firms are going downhill fast. Baker Botts cut salaries and deferred incoming associates to January. V&E also deferred incoming associates to January. Neither firm has announced extra stipends for the affected associates. These are not the actions of financially healthy firms.

The current tiers look like this:

Tier 1: KE, Weil

Tier 2: Gibson Dunn, Jones Day, Sidley, Winston

Tier 3: Akin Gump, HayBoo, Thompson Knight, VE

Tier 4: Baker Botts, Bracewell, Hunton Andrews Kurth

Tier 5: Fulbright, Gardere, Jackson Walker, and the rest

I’m not sure I would put Weil/KE a tier above Gibson, Sidney and Winston. Maybe they have an edge given their restructuring platforms in a recession but those other national firms are definitely comparable.

The trouble with a tier list like this is that Dallas is fundamentally a different market than somewhere like Houston. In Houston, you have a good number of large offices all competing for that local energy work and it’s relatively easy to rank who is winning that business. Dallas has a robust economy but it’s more diverse and most of the local deals are more middle market and don’t necessarily support the NY rates of these national firms. So corporate departments are generally smaller and I think tend to work more with other offices. I think national firms like having a presence in Dallas because there are those deals at the top of the market and it is a good place for legal talent and the comp goes a long way, which may help with associate retention. Associates looking to go in house in Dallas could be looking at 50%+ pay cuts coming from the national firms.

I think it will be interesting what happens with the split in comp between the national/Texas-based firms in the aftermath of COVID. Pre-COVID, it seems like a lot of the Texas firms could keep up with base salary and maybe raises but bonuses would be more hit or miss and tied to hours. The national firms have lockstep raises and bonuses (some with no hours requirement) and I think if the Texas firms fall behind in comp, it will begin to be harder to turn down a national firm offer for a Texas based firm.

Man is it really a 50%+ cut to go in house in Dallas? Do people just end up staying at firms for longer? That doesn't seem like a great outcome...

[Anonymous User]

This thread has been incredibly helpful! Does anybody have thoughts similar to the above ranking for corporate groups, except focused on litigation groups? Thanks!

Junior lit associate at a national firm in Dallas. I can give it a shot. Dallas is tough to break into tiers for lit because there are reputable people and groups at a lot of the firms. Also, unlike Houston, the litigation market isn't dominated by boutiques (Susman Dallas is no longer). That said, here is a rough breakdown:

Top Tier/Band 1
Winston: Best of the big firms for trial work. Their lit group seems to function like a boutique within the larger firm.
Gibson Dunn: Less trial work than Winston, but Gibson Dunn has an excellent reputation. More appellate work, and take on some very sophisticated cases.
McKool: McKool is the big name trial boutique in Dallas. Their bread and butter is IP litigation, and they have a strong rep for patent work (although some would say they have a strong rep for repping patent trolls). Excellent firm for experience, but rough hours and they don't pay like an elite boutique (no more market-shattering bonuses).
Lynn Pinker: The other lit boutique in Dallas. Seems to me more of a generalist trial firm than McKool, and they have a strong rep in appellate work as well. Gibson Dunn just took one of their name partners, so it will be interesting to see what their long-term outlook is.

Mid-Tier/Band 2
V&E: Very strong group, although they've lost some partners to national firms and retirement. The lit group has shrunk in size, but they still have sophisticated work and good people.
Sidley: Sidley has a strong rep in investigations and appellate work. They don't seem to generate as much local work, and I have heard middling reviews on culture.
Baker Botts: Can't speak to the larger issues discussed in this thread re: BB, but their Dallas lit group is pretty reputable, particularly in IP lit and securities work. That said, they are in the same boat as V&E in that they have lost some big names to laterals and retirement.
Akin Gump: Interesting work (investigations and restructuring litigation), but middling culture and not a group you hear about much anymore.
Kirkland: It's tough to say what role Kirkland's litigation group will play in the Dallas landscape because they are brand new, but they hired good people from Gibson Dunn and Lynn Pinker, and the firm seems serious in its commitment to Dallas. That said, litigation seems to always play second fiddle to corporate at Kirkland.

Band 3
These firms run together, so I'll just cluster them: Thompson & Knight, Haynes & Boone, Fulbright, and Locke Lord. TK is probably the strongest of the bunch. Haynes & Boone's litigation group has fallen off over the years, but still a great firm.

Regional Firms
Jackson Walker, Winstead, and Gardere. Less-sophisticated work, and less compensation, but all of these firms offer good culture and reasonable partnership prospects.

I am positive that I missed some firms. There are litigators at Weil, and firms like Polsinelli and Baker McKenzie, but I don't know enough about them to fit them into any kind of ranking.

[Anonymous User]

The old Texas firms are going downhill fast. Baker Botts cut salaries and deferred incoming associates to January. V&E also deferred incoming associates to January. Neither firm has announced extra stipends for the affected associates. These are not the actions of financially healthy firms.

The current tiers look like this:

Tier 1: KE, Weil

Tier 2: Gibson Dunn, Jones Day, Sidley, Winston

Tier 3: Akin Gump, HayBoo, Thompson Knight, VE

Tier 4: Baker Botts, Bracewell, Hunton Andrews Kurth

Tier 5: Fulbright, Gardere, Jackson Walker, and the rest

I’m not sure I would put Weil/KE a tier above Gibson, Sidney and Winston. Maybe they have an edge given their restructuring platforms in a recession but those other national firms are definitely comparable.

The trouble with a tier list like this is that Dallas is fundamentally a different market than somewhere like Houston. In Houston, you have a good number of large offices all competing for that local energy work and it’s relatively easy to rank who is winning that business. Dallas has a robust economy but it’s more diverse and most of the local deals are more middle market and don’t necessarily support the NY rates of these national firms. So corporate departments are generally smaller and I think tend to work more with other offices. I think national firms like having a presence in Dallas because there are those deals at the top of the market and it is a good place for legal talent and the comp goes a long way, which may help with associate retention. Associates looking to go in house in Dallas could be looking at 50%+ pay cuts coming from the national firms.

I think it will be interesting what happens with the split in comp between the national/Texas-based firms in the aftermath of COVID. Pre-COVID, it seems like a lot of the Texas firms could keep up with base salary and maybe raises but bonuses would be more hit or miss and tied to hours. The national firms have lockstep raises and bonuses (some with no hours requirement) and I think if the Texas firms fall behind in comp, it will begin to be harder to turn down a national firm offer for a Texas based firm.

Man is it really a 50%+ cut to go in house in Dallas? Do people just end up staying at firms for longer? That doesn't seem like a great outcome...

I'm only familiar with Houston in-house salaries, but I highly doubt 50% pay cuts are all that standard. That may be the case for base pay, but better in-house jobs tend to be more bonus and equity heavy than biglaw. If your company has a good year, you could meet or exceed biglaw market, if it has a very bad year I suppose you could be closer to that 50% (though I think that's unlikely). It's also dependent on when you go in-house and what point in time you are making the comparison. My all-in comp in-house is greater than it was when I left as an early mid-level (for a lot fewer hours), but it's certainly quite a bit less than I would theoretically be making as a junior partner if I were still in biglaw.

[Anonymous User]

The old Texas firms are going downhill fast. Baker Botts cut salaries and deferred incoming associates to January. V&E also deferred incoming associates to January. Neither firm has announced extra stipends for the affected associates. These are not the actions of financially healthy firms.

The current tiers look like this:

Tier 1: KE, Weil

Tier 2: Gibson Dunn, Jones Day, Sidley, Winston

Tier 3: Akin Gump, HayBoo, Thompson Knight, VE

Tier 4: Baker Botts, Bracewell, Hunton Andrews Kurth

Tier 5: Fulbright, Gardere, Jackson Walker, and the rest

I’m not sure I would put Weil/KE a tier above Gibson, Sidney and Winston. Maybe they have an edge given their restructuring platforms in a recession but those other national firms are definitely comparable.

The trouble with a tier list like this is that Dallas is fundamentally a different market than somewhere like Houston. In Houston, you have a good number of large offices all competing for that local energy work and it’s relatively easy to rank who is winning that business. Dallas has a robust economy but it’s more diverse and most of the local deals are more middle market and don’t necessarily support the NY rates of these national firms. So corporate departments are generally smaller and I think tend to work more with other offices. I think national firms like having a presence in Dallas because there are those deals at the top of the market and it is a good place for legal talent and the comp goes a long way, which may help with associate retention. Associates looking to go in house in Dallas could be looking at 50%+ pay cuts coming from the national firms.

I think it will be interesting what happens with the split in comp between the national/Texas-based firms in the aftermath of COVID. Pre-COVID, it seems like a lot of the Texas firms could keep up with base salary and maybe raises but bonuses would be more hit or miss and tied to hours. The national firms have lockstep raises and bonuses (some with no hours requirement) and I think if the Texas firms fall behind in comp, it will begin to be harder to turn down a national firm offer for a Texas based firm.

Man is it really a 50%+ cut to go in house in Dallas? Do people just end up staying at firms for longer? That doesn't seem like a great outcome...

I'm only familiar with Houston in-house salaries, but I highly doubt 50% pay cuts are all that standard. That may be the case for base pay, but better in-house jobs tend to be more bonus and equity heavy than biglaw. If your company has a good year, you could meet or exceed biglaw market, if it has a very bad year I suppose you could be closer to that 50% (though I think that's unlikely). It's also dependent on when you go in-house and what point in time you are making the comparison. My all-in comp in-house is greater than it was when I left as an early mid-level (for a lot fewer hours), but it's certainly quite a bit less than I would theoretically be making as a junior partner if I were still in biglaw.

It’s also a factor that big law comp really ramps up for midlevels. For third years, the all in comp at a Cravath scale firm is $270k, for a fourth year, $320k and for a fifth year, $360k. Wouldn’t be unheard of in Dallas for an entry in-house position to pay between $135K - $180k.

Houston in-house tends to pay more, in particular with the energy sector jobs. I’ve talked to major tech companies in Dallas that start at $135k + a little equity for a 3-5 year entry level in-house lawyer. Goes up from there with more experience but the gap between Cravath scale and in-house also really starts to widen.

Would be good to get some other data points though as it is a bit of a black box.

[Anonymous User]

Thoughts on Caldwell Cassady?

[Anonymous User]

Delete.

[Anonymous User]

Is there a substantial compensation difference between the Texas based firms and national firms?

[Anonymous User]

Is there a substantial compensation difference between the Texas based firms and national firms?

It depends. V&E and Baker Botts have stuck to the Cravath scale for salary and bonuses the last few years. Some of the more regional firms, like Haynes and Boone and Bracewell start at Cravath for juniors but compress salary for mid-levels and seniors, and bonuses are typically smaller.

[Anonymous User]

Is there a substantial compensation difference between the Texas based firms and national firms?

V&E, Baker Botts, and TK all began year paying same as national firms. Baker Botts and TK both gave 20% salary cuts due to COVID.

Like previous poster said, NRF, JW, and Haynes & Boone all start market, but there is significant compression in compensation. This meanings by your 4th or 5th year you could be making 100k less than your counterparts at national firms and V&E.

[Anonymous User]

Is there a substantial compensation difference between the Texas based firms and national firms?

Another thing to consider is that some national firms like Weil have no hours requirement for bonuses. So as long as you are in your seat on bonus day, you get your full Cravath market bonus.

I think that makes a big difference versus somewhere that you have to hit an hours requirement. You'll still probably end up working about the same number of hours (or maybe more), but it's really nice to have one less thing to stress about.

It also makes it easier to take vacation and not worry about whether that extra week of vacation will make you miss your bonus.