Fewer firms are on Texas Lawyer's Annual Report on Firm Finance this year, but despite increased competition in Texas, the firms combined to collect greater revenue in 2018 than the year before.

Gross revenue for the 17 Texas firms totaled $5.175 billion in 2018, up 3.3% from $5.011 billion that same group of firms earned in 2017.

This year's Annual Report on Firm Finance only includes 17 firms because three large Texas firms—Andrews Kurth Kenyon, Gardere Wynne Sewell and Strasburger & Price—merged in 2018 with national firms headquartered outside the Lone Star State.

It's clear that Texas' robust economy resulted in mounds of work in 2018 for large Texas firms.

All but two of the firms brought in more revenue in 2018 than the prior year, with litigation boutique Susman Godfrey, which takes some work on a contingency-fee basis, posting an impressive 40.1% increase in revenue.

The only declines were at Baker Botts, where revenue declined by 7.3%, because contingency-fee revenue was higher in 2017, and at intellectual property boutique Patterson + Sheridan, which posted a 9.8% drop because of some departures during the year.

The overall positive revenue picture comes even as homegrown Texas firms face intense competition from national and international firms that moved into the Texas market in 2018, hired away productive laterals, and scuffled for business.

While energy work is exceedingly important in Texas, managing partners of some firms noted that capital markets work in the energy sector was soft during 2018 because of the price of oil, but the firm leaders cited other practices areas as booming in contrast, such as real estate, litigation, private equity and all aspects of technology work. Additionally, a number of the firms also received a boost of revenue from international offices including London.

Texas Lawyer's Annual Report on Firm Finance includes financials from 17 large and high-grossing firms in Texas that appeared on the list last year.

While total revenue improved for the 17 firms, so did net income. Taken as a whole, net income at the firms totaled $2.169 billion in 2018, up 1.3% when compared with $2.141 billion in the prior year.

Porter Hedges saw its net income improve by the largest margin—a 19.4% increase—and a dozen other firms also boosted their net income for the year. Declines in net income for the Texas firms were relatively small, with Akin Gump Strauss Hauer & Feld and Baker Botts each posting the largest decrease of 4.1%.

Revenue per lawyer (RPL) and profits per equity partner (PEP) improved at the firms in 2018. RPL averaged $840,000 at the 17 firms, up 5.3% when compared with $798,000 for those firms in 2017. PEP came in at an average of $1.326 million for the 17 firms, up 6.9% when compared with $1.244 million the prior year.

PEP exceeded $1 million at 12 of the 17 firms.

Those four measures in the Texas Lawyer Annual Report on Firm Finance—gross revenue, net income, RPL and PEP—help describe each firm's financial performance and provide a means for comparison. The gross revenue chart is the master list for the report.

Akin Gump again tops the gross revenue chart with $1.071 billion in 2018, up 3.1% when compared with 2017. Fifteen of the firms brought in more revenue in 2018 than in 2017 and two had lower revenue.

Akin Gump also topped the net income chart, with $445 million in 2018, 4.1% less than the year before. Net income improved at 13 firms and declined at four.

Susman Godfrey, the litigation firm, led the RPL chart with $1.926 million, up 25.6% when compared with 2017. RPL improved at 13 firms, but declined at only four. The highest decline was at Patterson + Sheridan, with a 17.1% drop.

Susman Godfrey also led the PEP ranking, with $2.585 million, up 7.7% from 2017. All of the firms, except for Baker Botts and Kelly Hart & Hallman, improved PEP in 2018.

The report also includes a firm-by-firm analysis that helps explain financial results at each of the firms.

The fact that lawyers from the firms are quoted in this report is no indication of the firm's cooperation with the preparation of the Annual Report on Firm Finance. Lawyers simply responded to questions about work and developments at their firms in 2018. Texas Lawyer does not identify which firms provide financial information to ALM and which do not.

All of the revenue figures in the charts are for the calendar year 2018. All lawyer counts are full-time equivalent for the firm's fiscal year. All numbers are rounded to the nearest 1,000.

See the Charts:

Gross Revenue 2018

Net Income 2018

Revenue Per Lawyer 2018

Profits Per Equity Partner 2018

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Report: Texas Lawyer's 2018 Firm Finance