Dallas, Texas.

Texas' lateral hiring market operated in overdrive throughout 2018 as hundreds of lawyers took opportunities too tempting to refuse. But does this year's frenetic lateral activity mean that firms in Texas will have a harder time landing top-tier lawyers in 2019?

Leaders of firms and offices in Texas with plans to hire next year don't think so—unless you're looking for top-notch mid-level associates.

“There's no shortage of great lawyers in the market. Whether they are very happy where they are or whether they are looking to do something is another question,” said Hugh Tucker, a Shearman & Sterling partner in Houston who is head of the firm's Texas practice.

Tucker, who moved to Shearman this year from Baker Botts, said New York-based Shearman,  which launched offices in Austin and Houston in 2018, has opportunities to hire laterals in Texas because of the firm's platform.

“I'm still very optimistic about our ability to grow with top-flight talent because there is quite a bit of it in the market in Texas,” he said.

Joe Coniglio, managing partner of Greenberg Traurig's Dallas office, said competitive challenges exist in the Dallas market, but his office is in a good position relative to market newcomers because it's been there for 15 years. Also, he said, the firm wants to hire lawyers who have an “enterprising focus” and a practice that can take advantage of that.

“The key is, to me, to find the right group,” he said.

Greenberg Traurig has 50 lawyers in Dallas and is expanding its space so it can accommodate 15 more. Coniglio said the firm is eyeing growth in areas including private equity, M&A and corporate finance to add to the office's strong focus on real estate. The firm also recently formed an esports practice group that is led by two partners in Dallas.

Even firms that made a splashy entrance into Dallas face challenges.

Bryan Goolsby, the managing partner of the Dallas office of Winston & Strawn, said “everything is more challenging,” primarily due to competition from firms moving into the Dallas market and trying to replicate his firm's approach of launching an office with lawyers from different firms.

Winston & Strawn opened an office in Dallas nearly two years ago with 21 partners from eight firms, a strategy Latham & Watkins also successfully used when it opened an office in Houston in 2010.

Goolsby said the depth of the market may not be enough to support all of the firms moving to Dallas that want to build an office with that strategy.

“We'll see how it all shakes out,” Goolsby said.

Some Texas-based firms are staying away from a bidding war for lateral hires, despite the increased competition.

“I do think the market is picked over and frankly a lot of these firms have the resources to throw big dollars at laterals. We just don't play the bidding war,” said Phil Appenzeller, CEO of Dallas-based Munsch Hardt Kopf & Harr.

Appenzeller said his firm is finding success in acquiring groups and lawyers who aren't interested in practicing at a Big Law firm. He said the firm expects to add two new practices in early 2019 through lateral hires.

“A lot of these smaller firms that don't want to get gobbled up by a national firm and want to stay regional are starting to show interest in us,” he said, noting that the firm's strategy is to expand in Texas and not merge with a national firm.

It goes beyond lateral partners. Andrew Calder, a Kirkland & Ellis partner in Houston who is a member of he firm's global management committee, said the market for mid-level associates in Houston is one of the most competitive in the country. “That's a testament to how good the firms are. There are some very strong firms and national firms coming into the market,” he said.

Calder said Kirkland, which topped the Am Law 100 in 2018, said the firm is not having difficulty hiring laterals, despite the competitive market.

“There are many fine lawyers in Texas,” Calder said. “To the extent that top-class talent is available and we think it will service our clients' business, we will hire them opportunistically.”

Kent Zimmermann, a consultant at Zeughauser Group who does work in Texas, said mid-level associates are becoming increasingly difficult to hire on the lateral market in Texas and in other locations such as Chicago. As a result, the price for high-quality mid-level associates is being driven up, he said.

“There are a lot of firms that just don't have enough,” he said. “That's an issue in Texas.”

Further Reading:

Winston & Strawn Moves into Dallas, Poaching 21 Lateral Partners

How Latham Cracked the Houston Market

Greenberg Traurig Enters eSports Game With Launch of Dallas-Led Practice Group