Firms around the country are flocking to Texas to open doors in a new location. In fact, less than three months into 2018, more than a half a dozen law firms have already expanded into Texas, according to Texas Lawyer.
The number of established firms within the state are expanding as well, and people are taking notice. Why are both large and mid-sized firms suddenly calling the Lone Star state home?
Texas is on the legal industry’s radar for a number of reasons. Here’s what you need to know.
Texas Is the Best Place to Start a Business in 2018
Texas was ranked number one in CNBC’s annual, America’s Top States for Business 2018. States were scored based on ten specific categories that are beneficial for a new or expanding business. The three categories that factored the most in overall scoring include the following:
- Workforce: States are rated based on the education level of their workforce, number of available employees and “net migration of college-educated workers.” The concentration of STEM-related (Science, Technology, Engineering, Mathematics) workers are also taken into account, as well as success of training programs, union memberships, and the states’ right-to-work laws. Texas received a grade A in this category.
- Infrastructure: This includes assessing the state’s systems for transporting goods by air, water and land. Quality of roads and bridges and average commute to work are also factors. In this area, Texas received an A+.
- Cost of doing business: This includes tax climate and state-sponsored incentives that lower the cost of doing business. Also considered are the cost of utilities, wages and office spaces. Texas was given an A-.
Other areas in which Texas received high marks included economy, technology and innovation, access to capital, and cost of living.
Texas Firms Are Open to Mergers
Texas law firms have made it clear that they’re open to mergers, according to the 2018 Law Firm Leaders Texas Survey. A large majority of those surveyed, 82 percent, have been approached to merge with another firm in the past year, and 32 percent are open to a merger in the next 3 to 5 years. Of that 32 percent, 80 percent are interested in a “transformational combination with a larger or similarly-sized firm.”
This survey also explains why areas like Houston, Austin and Dallas are some of the most popular locations for law firms in Texas. Although firms are likely to encounter greater competition in these locations, they would also have access to a larger base of clients.
Firms Want a Piece of the Recovering Energy Industry
Hurricane Harvey took a toll on the Texas energy industry, but oil prices are on the rise. The state’s oil and gas industry are poised for growth, providing yet another reason why law firms are migrating to Texas. Firms are looking for experienced lawyers who can contribute their expertise and potentially their clients, or are looking to establish a new office in the Lone Star State.
The Permian Basin in West Texas is expected to push the United States ahead of Russia in oil production. With output expected to double by 2023, law firms are looking at both the long- and short-term gains.
The Texas Law Firm Boom
Texas has a lot to offer for law firms looking to grow and expand into the state, including a pro-business environment, strong economy, and a flourishing energy sector. It’s easy to see why many law firms have set their sights on Texas.