Economic Diversity Keeps Texas Powerhouse Firms Busy
As part of its Regional Powerhouse series, Law360 is recognizing five Texas law firms that showed prowess in delivering for their clients across a wide range of practice groups and that are bucking the perception that energy is the only market in Texas. They are Akin Gump Strauss Hauer & Feld LLP, Kirkland & Ellis LLP, McKool Smith PC, Susman Godfrey LLP and Vinson & Elkins LLP.
Each of the firms has a national presence, working on deals both global in scale and those that have a major impact at home in Texas.
Akin Gump and McKool Smith, which were both founded in Dallas, have five and four outposts in Texas, respectively, and each has an office in the patent litigation-heavy Eastern District of Texas. Susman Godfrey and Kirkland each have offices in Houston and Dallas. Vinson & Elkins has Texas offices in its hometown of Houston and in Dallas and Austin.
The law firms among this year’s winners vary quite a bit by headcount of attorneys practicing in Texas. Vinson & Elkins leads the way with 444 Texas practitioners, followed by Kirkland with 192, Akin Gump with 162, Susman Godfrey with 84 and McKool Smith with 74. Nationally, Kirkland has the biggest bench, with 2,054 attorneys, followed by Akin Gump with 767, Vinson & Eklins with 609, Susman Godfrey with 156 and McKool Smith with 150.
Firms outside the state have been flocking to Texas in recent years, a trend that started because of the energy work to be done in Houston. But the focus has now shifted to Dallas, where recruiting activity is high, Austin-based legal recruiter Lee Allbritton, a principal of Amicus Search Group, said.
“I think that’s probably due to the leveling out of the oil and gas markets … but the Dallas market has just been on fire lately, largely just because the Dallas economy is so diversified,” he said.
With companies like Toyota moving to Dallas, and those such as Apple and Google opening up outposts in Austin, Albritton said the type of work for attorneys to handle in Texas continues to diversify, as do the attorneys themselves.
“It’s always been a leading national center for professional services, but it’s becoming less Texan — and some would call it parochial — and becoming more uniformly national in character,” he said of the Texas legal market. “That’s largely due to so many new entrants to the market over the last decade.”
Deals That Reshaped the Energy Landscape
Energy drives the Texas economy, and for these Regional Powerhouse firms, making deals in that space is part of their DNA.
Akin Gump advised Diamondback Energy in its $9.2 billion acquisition of Energen Corp. That deal closed in September 2018 and created a Permian Basin behemoth, giving the companies the third-largest production for a pure play company there.
In October, Kirkland’s Texas attorneys represented Houston-based Rowan Co. PLC in a $12 billion combination with Ensco PLC, a deal that created one of the largest and geographically diverse offshore drillers in the world.
Vinson & Elkins provided tax counsel to Enbridge Inc. in its $3.3 billion purchase of its U.S. master limited partnership, Houston-based Spectra Energy Partners LP, and gave tax counsel to Buckeye, a midstream MLP, in its $10.3 billion acquisition by institutional fund manager IFM.
As market watchers fear stress in the energy space will increase over the next year, Texas attorneys expect they’ll stay active.
“We have a strong restructuring practice, and during the last downturn in 2015, we were able to stay very busy handling those types of matters,” said Anthony Speier, of Kirkland in Houston. “There’s definitely a lot of distress in the energy space, and I think that will become a bigger part of our practice over the next 12 to 18 months.”
But the firms guided major clients through complex, blockbuster transactions outside of the energy arena as well.
Akin Gump served as lead antitrust counsel for AT&T's integration planning efforts in its $108 billion merger with Time Warner Inc. The deal officially closed in February after the D.C. Circuit OK’d the media merger over the objections of government attorneys who argued it could create substantial competitive harms.
IP Victories That Made Waves
Called upon for make-or-break litigation and crucial patent work, Texas Powerhouses scored major victories for clients in the intellectual property space this year.
Susman Godfrey attorneys secured the largest-ever jury verdict in Bexar County when they guided HouseCanary — a company that developed proprietary home appraisal technology — to a $706.2 million win against Title Source in a trade secrets lawsuit. The court affirmed the jury’s findings in November and denied a bid for a new trial in January, though the ruling is on appeal.
In February, the Patent Trial and Appeal Board sided with pharmaceutical giants Sanofi and Regeneron, represented by McKool Smith’s Texas-based attorneys, in the successful defense of the companies’ patent for Dupixent, an eczema medication that had netted Sanofi $922 million in revenue in 2018. Sanofi was seeking a ruling that its drug did not infringe an Amgen Inc. patent for a failed asthma treatment.
Also in February, McKool Smith successfully defended Ericsson Inc. in a jury trial in a lawsuit brought by HTC America Inc., which had alleged Ericsson was overcharging on licensing fees for certain cellular patents. In August, HTC appealed that verdict to the Fifth Circuit.
Go-To Trial Lawyers for High-Stakes Court Fights
In Houston, Susman Godfrey attorneys took on the pro bono representation of Maranda ODonnell, who alleged the Harris County bail system unconstitutionally kept poor defendants locked up prior to trial solely because they couldn’t afford bail. In January, the attorneys brokered an agreement between indigent defendants like ODonnell and Harris County that would severely limit the use of the cash bail system. The deal needs final approval from U.S. District Judge Lee Rosenthal.
Neal Manne, a partner with Susman Godfrey, said the firm’s work on that case made him proud.
“It’s a landmark change, and it’s going to become a model for bail reform all around the country,” he said. “I feel great about the impact we were able to have.”
Vinson & Elkins’ Houston attorneys went all the way to the Texas Supreme Court in a fight to revive a $100 million claim from client Anadarko Petroleum Corp. that Lloyd’s of London must cover the cost of litigation stemming from the Deepwater Horizon explosion and oil spill. They won that battle in January in a case closely watched in the insurance industry.
Another big Texas Supreme Court victory for the firm came in May, when the high court ended a defamation lawsuit that had been brought against Vinson & Elkins’ client the Dallas Morning News by the owners of a compounding pharmacy alleging the paper falsely reported it was under federal investigation.
Kirkland secured a two-fold victory for client Neiman Marcus earlier this year in a lawsuit brought by Marble Ridge Capital alleging the clothing company had fraudulently transferred more than $1 billion in assets beyond the reach of the retailer’s creditors. The firm’s lawyers got that suit dismissed and also cleared the way to bring counterclaims against Marble Ridge for defamation and business disparagement, beating an early dismissal bid from the fund in April.