Houston has always been known for energy and oil & gas. An area located west of downtown known as the Energy Corridor is home to many of these companies. There are currently twenty-one Fortune 500 companies headquartered in Houston, most of them related to Oil & Gas/Energy.
Included in the Top 200 are Phillips 66, ConocoPhillips, Plains All American Pipeline, Baker Hughes and Halliburton. Upstream, downstream, drilling, pipelines, and oilfield services. These companies have large corporate counsel offices and equally large outside counsel with multiple law firms.
Shifting Historical Trends of the Houston Legal Market
Houston’s high-end legal market was once dominated by the so-called “Big Three” Texas firms: Vinson & Elkins, Baker Botts, and Fulbright & Jaworski (now known as Norton Rose Fulbright). In 2020, 14 of the 15 largest law firms by revenue in the U.S. have an office in Houston. Several of these newer offices are led by lawyers who were formerly partners at the home-grown Houston firms.
A Look Back at the Hiring Spree of 2019 & 2020
The new Texas Lawbook data show that the years of conservative hiring practices ended in 2019. Corporate law firms in Houston went on a relative hiring spree in late 2019 and early 2020, growing in lawyer count by 3.6 percent, compared to less than 1 percent each of the previous five years.
Ironically, the long-awaited growth may have occurred at exactly the wrong time, citing the one-two punch of COVID-19 and plunging oil and gas prices. What seemed like good strategic planning 18 months ago is now a drain on cash-flow.
Oil field services giant Schlumberger, which has a primary office in Houston, reduced their 100K+ workforce, worldwide by 20% in Q2. Exxon, Halliburton and Chevron, among others, also had significant layoffs.
2021 Hiring Outlook for Legal Professionals
Consequently, 2021 is saying, “out with Energy work and in with Bankruptcy and Restructuring”. This can be seen as an opportunity for several law firms with strong bankruptcy and restructuring practices, such as Kirkland & Ellis, Weil Gotshall, Norton Rose Fulbright, Sidley Austin and Haynes and Boone. Also taking advantage of this business is Pachulski Stang Ziehl & Jones, one of the nation’s largest firms devoted primarily to corporate restructurings.
The Chapter 11 restructuring process often brings management changes within corporations, meaning that law firm allegiances can become newly up for grabs. The result could open up opportunities for attorneys in Houston. Law firms that guide those companies through the process may have a leg up to remain after the crisis giving these bankruptcy practices a leg-up.
As we continue to see small, but visible improvements in the Texas economy, we encourage the lawyers we work with at Momentum to expand their practice area knowledge. This can be done through attending CLE’s outside of their practice area. This can hopefully develop a new skill and introduce them to other lawyers and business professionals for future networking and business development.
We learned from the 2008-2009 recession that many lawyers re-tooled their practices and survived. Hot practice areas are certainly economy driven and cyclical. As oil remains king in Houston, renewable energy continues to grow. The slow rise in the price of oil since their first of 2021, may signal a comeback in this work. Renewables are also receiving a lot of press since the power grid failed in Texas this month.
The recruiters at Momentum each have 15+ years’ experience in the Texas legal market, offering a wealth of historical knowledge in shifting, retooling and adjusting your practice to make you more appealing to businesses to hire or law firms to want you to join them. Call us to discuss hiring for your firm or legal department or if you’re interested in dipping your toe in the job market.