Texas may have the most active lateral market in the country, but firm performance in the state lagged behind national trends in most areas tracked by Citi Private Bank's Law Firm Group.

Through June 30, law firms turned in their best half since the recession, according to City Private Bank's Law Firm Group 1H18 Flash Results, which includes data from 186 firms.

That was not the case in Texas.

Nationally, revenue at the 186 firms in the Citi survey grew by 5.5 percent and demand was up 2 percent during the first half of 2018 compared to the same period in 2017. But in Texas, revenue declined by 1.7 percent during that period compared to 2017 and demand—defined as hours logged—dropped by 4.7 percent. Seven firms are in the Texas sample.

John Wilmouth, senior client adviser in Citi Private Bank's Law Firm Group, said demand was down in Texas by a greater percentage than in any of the other 11 regions of the United States during that six-month period.

“It's been a very competitive region, but I also should say it's also just been a volatile time for the industry as a whole,” Wilmouth said. ”It appears to be more of a roller coaster ride for the Texas firms.”

Texas firms fell short of the national results in other areas as well.

The collection cycle slowed by 6.6 percent in Texas during the period, compared with a collection cycle that lengthened by 2.4 percent nationally. Lawyer head counts dropped by 1.8 percent in Texas during the six-month period, in contrast to 1.8 percent growth nationally.

One positive for Texas is that expenses grew by only 1.5 percent during the six months, compared with a 4.8 percent growth nationally. Wilmouth said that slower growth in expenses in Texas could be related to the reduction in headcount.

Billing rates improved by about 2 percent at the Texas firms, compared with 4.5 percent nationally during the six months.

The national sample includes 77 AmLaw 100 firms, 53 Second Hundred firms and 56 niche/boutique firms. The Texas data includes seven firms ranging from Am Law 100 to niche-boutique firms.

Wilmouth said that because of volatility in the market, Texas firms could very well rebound during the second half of the year or in 2019, particularly if the firms step up collections. However, unbilled time in Texas was up by only 1.6 percent in the six-month period compared with the same period in 2017.

“The pipeline isn't up as much as it could be,” he said.