San Antonio. Photo: Shutterstock

Am Law 200 firms based outside Texas operate more than 160 offices in the Lone Star State, but only a handful are in San Antonio, far fewer than in Houston, Dallas or Austin.

Recruiters and consultants posit a number of reasons why San Antonio is less popular among out-of-state firms, compared with other large Texas cities. Among them: fewer corporations are headquartered in the Alamo City, billing rates are generally lower, and firms may believe they can handle work in South Texas without a physical presence in San Antonio.

To a degree, that means San Antonio lawyers have fewer opportunities to join Big Law firms, where they can take advantage of the bigger and broader client rosters and potentially raise their rates.

"While some significant corporations are in San Antonio, it's just not as robust of a corporate environment as in Houston or Dallas, or even Austin. There's a lot of billing-rate pressure," said Jack Hopper, managing director in Austin for Kinney Recruiting.

"There are companies in Dallas that will pay $1,000 for corporate work, for instance. For San Antonio, that's pushing the outer limits," Hopper said, adding that the rate would be more like $700 an hour in San Antonio.

The out-of-state firms with San Antonio offices are Clark Hill (known as Clark Hill Strasburger in Texas), Akerman, Dykema Gossett, Norton Rose Fulbright and Ogletree Deakins Nash Smoak & Stewart.

Those five offices compare with 65 offices in Houston for non-Texas-based Am Law 200 firms, 51 in Dallas and 30 in Austin.

Much of the Big Law presence in San Antonio is the result of acquisitions or mergers.

For instance, Clark Hill, based in Detroit, picked up a San Antonio office in its 2018 merger with Texas firm Strasburger & Price, and Dykema merged with San Antonio-based Cox Smith Matthews in 2015. Additionally, Florida firm Akerman added a San Antonio office when it picked up 30 trial lawyers from Beirne Maynard & Parsons in 2016. Norton Rose Fulbright was formed in the 2013 merger of Texas firm Fulbright & Jaworski and U.K. firm Norton Rose.

Labor and employment firm Ogletree Deakins opened its San Antonio office in 2001. Lawrence Smith, currently the managing shareholder in San Antonio, was one of five lawyers who left Jenkens & Gilchrist to launch the office for Ogletree Deakins.

Smith said Ogletree Deakins at that time already had offices in Houston and Dallas, and wanted to expand both inside and outside Texas.

Additionally, a number of Am Law 200 firms born in Texas do maintain San Antonio offices, including Akin Gump Strauss Hauer & Feld; Haynes and Boone; Jackson Walker; Bracewell; and Winstead.

Despite the city's large population, Chris Batz, a recruiter who does work in the Texas market, said he does not view San Antonio as a big city in the context of legal recruiting. He said Houston, Dallas and Austin are Texas's business centers, and San Antonio simply has fewer lawyers, which becomes a barrier for firms trying to launch there.

"Recruiting is always a factor. Attracting talent is always a factor," said Batz, founder of the Lion Group in Overland Park, Kansas.

Alysa Schildcrout, a principal at Amicus Search in Dallas, said the dearth of out-of-state firms in San Antonio is due to its smaller corporate market and lower billing rates. She said her search firm's Am Law 100 clients view San Antonio as a tough sell.

Kent Zimmermann, a consultant with Zeughauser Group, said San Antonio's economy is growing, but large law firms tend to expect more "downward pressure" on rates in San Antonio than in Dallas or Houston.

"There's a perception that the opportunity to serve large, sophisticated buyers of legal services are not as plentiful in San Antonio," he said.

Despite that, Zimmermann said two firms he declined to identify have recently expressed interest in launching a San Antonio office.

"I told them, hey, there's less competition for sought-after lawyers there, and there's some high-quality firms doing work there," Zimmermann said.

He said when Dallas and Houston "get more picked over," more firms will expand their focus to other cities, including Austin and San Antonio.

Still, that appears to be a ways off. Batz and Hopper said they haven't worked on specific projects in San Antonio. And neither has Robert Croyle, a director in the Houston partner placement group at Major, Lindsey & Africa, he said.

"My thought on that is there are a number of firms that feel like they can handle whatever business in San Antonio can be handled out of either Houston, Austin or Dallas offices," Croyle said.

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