Seventeen corporate law firms in Texas hit elite status.
Every profession has its benchmarks for success — be it the number of barrels pumped or home runs smashed or square footage leased or surgeries performed.
In the world of corporate law, there is one statistic that is widely recognized as the measurement determining financial elite status: revenues per lawyer — $1 million per lawyer to be exact.
In Texas, the number of business lawyers working at elite law firms has skyrocketed during the past decade.
Seventeen corporate law firms with offices in Houston and Dallas reported generating $1 million or more in revenues per attorney in 2018 — up from just two law firms in 2011, according to exclusive financial data obtained by the Texas Lawbook.
The extraordinary increase in high revenue-generating law firms coincides — not surprisingly — with the tremendous influx of deep-pocketed national legal practices into Texas.
Only two of the 17 law firms are headquartered in Texas. Fifteen of the 17 elite firms are based in New York, Chicago, Los Angeles, Washington and Atlanta. Ten of the firms opened offices in Houston or Dallas during the past seven years.
Three other law firms, including Baker Botts of Houston, are on the verge of achieving elite status.
“Corporate law in Texas has clearly divided between the haves and the have-nots — and $1 million in revenue per lawyer is the dividing line,” said Kent Zimmermann, a legal industry consultant who works with several of the Texas law firms.
“Most of the large national corporate law firms have the resources to hire away the best lawyers from the Texas law firms,” Zimmermann said. “The best lawyers have the best clients and charge the most money and thus generate the most revenues.”
Zimmermann and other corporate law analysts say revenues per lawyer is the easiest and most trustworthy way to measure law firm success.
“Law firms can have hundreds of lawyers, but their attorneys are working on smalldollar matters,” he said. “Profits per partner are too easy for law firm leaders to manipulate. (Revenues per lawyer) is simple. Divide the number of lawyers into the total revenues made.”
The Texas lawyers at Simpson Thacher & Bartlett, a Wall Street firm that opened a Houston office in 2011 and has 32 attorneys working in the state, generated a record-setting $1.68 million in revenues per lawyer in 2018, according to Texas Lawbook data.
Only a few thousand dollars behind was global giant Kirkland & Ellis, which saw its Texas lawyers bring $1.65 million each into the firm’s coffers. Kirkland opened its Houston office only in 2014, but it now has more than 200 lawyers operating in Texas.
Gibson Dunn, Latham & Watkins and Weil Gotshal & Manges round out the top five.
The only large, full-service Texas-based law firm that achieved elite status was Houston-based Vinson & Elkins, which is chaired by Mark Kelly and reported revenue per lawyer of $1.20 million.
The biggest surprise on the Texas Lawbook list of elite firms was Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing — also known as AZA — a Houston litigation boutique that debuts on the elite ranking at No. 6 with an RPL of $1.234 million.