As 2017 draws to a close, Texas Lawyer asked the leaders of a few large Texas law firms to share their views on what to expect in 2018. Their answers, edited for clarity and space, follow.

Texas Lawyer: What excites you about your firm as it enters 2018, and what worries you?

Timothy Powers, managing partner of Haynes and Boone, Dallas: We have seen increased demand for our services in 2017. We aim to keep this trend going in 2018. Additionally, relatively late in 2017, we brought on some exceptional new partners who are already helping to grow our storied energy practice. These new partners are just getting started and are having a measurable impact on our firm's positive trajectory.

In terms of concerns, not to sound trite, but it is the unknown that worries me. With offices in Houston and Mexico City, we experienced unknowable challenges related to Hurricane Harvey and the earthquake. That said, as we always do, we came together as a firm, dug deep and moved forward. And of course, the regulatory and tax environment our clients face in 2018 has the potential for many unknowns, but we are confident that we are well prepared to help with any challenges that they may face.

David Taylor, chair, as of Jan. 1, 2018, of Locke Lord, Dallas: I am excited about the momentum Locke Lord has in its primary markets and strong practice areas. It is also a time of change, disruption and challenge for the legal industry, which can ultimately make for unique opportunities. We are particularly focused on growing by adapting to increased competition for both lawyers and clients, as well as the rise of legal technology innovation.

Mark Kelly, chair of Vinson & Elkins, Houston: What excites me at the firm is that I continue to have the opportunity to come to work every day and witness the terrific talent we have across all of our practice areas and the commitment to delivering the best in client service. It is also exciting that the firm continues to do well financially. This year will end as a record year for the firm and we will start 2018 with a very high activity level. Our goal is to be a truly elite firm, nationally and internationally.

Events outside of our control generally top my list of concerns. Financial and geopolitical risks, the volatility of commodity prices, and decisions emanating out of Washington, all of which are hard to predict, can have a major impact on our business and the economy. And, the legal market continues to be highly competitive so there is natural tension to make sure we are positioned to compete with the best firms in the world while maintaining our culture that we hold so dear.

Texas Lawyer: What changes in the Texas market do you anticipate for 2018?

Powers: We believe we will continue to see national firms setting up shop in our state. I believe this will be especially true for Dallas, which is proving increasingly to be a destination point for the headquarters of many of the Global 1000. I also think our local corporate community is growing every day, and should energy prices continue their rebound, so too will we see the economic activity grow. The net impact on the Texas legal market will likely be some degree of increased merger activity and the possibility of lateral “frothiness” in Dallas, similar to what we saw in Houston a number of years ago.

I am concerned about what is next with the North American Free Trade Agreement and the possible impact on Texas and beyond. Our firm is a proponent of free-trade and we welcomed NAFTA's positive impact on Texas and the overall North American economy. It is our hope that the 23-year-old NAFTA is updated and rationalized to reflect our current and future business environment and not eliminated. Should NAFTA be eliminated, the potential for negative implications for Texas and the greater North American economy and political environment could be severe.

Taylor: We expect that the economy in Texas will continue to be strong, which will provide opportunities for our clients and our firm. We also anticipate that in the Texas market we will see continued competition in the state from out-of-state firms. Across all markets, we will see increased consolidation through firm mergers and an increase in lateral hiring.

Kelly: Texas is still an incredibly competitive market and one that's attractive for businesses, so I'd expect to see some additional firms move in, even though the market is already quite saturated. There's also a good possibility there will be some combinations, as firms look for ways to remain competitive. That's not our path, but some may go in that direction. After more than 100 years in Texas, we are very fortunate to still be a leading firm with enormous talent and a very deep bench. I'm especially excited about the talent we have at the young partner level, and we want to keep that strong and continue to enhance our brand—in Texas as well as across the country and internationally.

Texas Lawyer: Will your firm adjust billing rates for the new year?

Powers: We focus first and foremost on delivering value to our clients with our legal services. Accordingly, our pricing to clients reflects that value and, in many instances, is done on some alternative arrangement to the stated hourly rate. However, we do evaluate our hourly rates every year. Typically, and with purpose, we tend to trail the national trends in billing rates and related increases. We are able to do so by carefully managing our expenses and seeking out efficiencies (including through the use of technology) wherever we can find them, as long as the end result is an increase in our ability to serve our clients well. In 2018, we expect to raise our rates subject to current market forces and in some cases, we may even reduce rates should we need to in reaction to specific sector circumstances.

Taylor: Yes, we consistently evaluate our billing rates to ensure we are providing strong service and value to our clients.

Kelly: We don't discuss rates publicly, but we strive to make sure our rates are competitive and our clients believe they are getting good value for the work we perform for them.

Texas Lawyer: Do you expect your firm to have more lawyers or fewer lawyers at the end of 2018 compared with the start of the year?

Powers: We expect to grow as we have in the past. Our goal is to only grow if doing so will help us serve our clients better while maintaining our Haynes and Boone culture

Taylor: We are always focused on hiring top performers in principal practice groups, and we anticipate we will have more lawyers at the end of 2018.

Kelly: Our expectation is that we will grow with lateral hires in areas of strategic importance to the firm. We added a number of lateral attorneys in 2017 in key markets such as Texas, New York, London and Washington, D.C. We believe this type of moderate growth, as opposed to a “mega-merger,” is more in line with our firm's strategy and culture.

Texas Lawyer: What is the biggest change you want your firm to make in 2018?

Powers: As we have in the past, we will see many changes at Haynes and Boone in the next 12 months. I expect that 2018 will be a year of further succession planning at our firm. Many of our clients ask me about our firm's succession planning regarding their client relationship with the firm. Recent studies have shown that many Am Law 100 firms have 70 percent or more of key client relationships under management by partners over 60. I am happy to say we are nowhere close to this number at Haynes and Boone. But, while we are in a better position than many of our peer firms, we need to seize this opportunity to work with our senior partners and our clients to make sure they come to know and trust the next generation of Haynes and Boone lawyers in the same way they do their current relationship lawyers. My generation of Haynes and Boone lawyers inherited a firm with deep and abiding client relationships which were carefully cultivated by our founders so that over time, they could seamlessly transition those relationships to all of us. It is time for us to continue this tradition to ensure that our firm is vital and growing well into the future.

Taylor: It is not necessarily a change, but we plan to work to increase the firm's already strong brand recognition in each of our markets.

Kelly: I don't believe we need to make full-scale changes. Rather, we want to continue trying to do things better. For example, we are very focused on improving our diversity and women lawyer programs. We have a ways to go, but we saw many positive signs of progress in 2017. Over a third of our new partners are women; a black woman was elected to the firmwide management committee for the first time, and we now have three women on that committee; and more than 200 lawyers have volunteered to join the firm's diversity committee, including many non-diverse attorneys. So we are seeing a high level of buy-in on these important issues and want to continue to get better as we move forward.