Fall 2011:

The Big Thaw in the frozen job market for lawyers in Texas over the past couple of years appears to be officially in progress. At least at the beginning of this thaw, the in-house market is more active than the law firm market, and primarily in the Houston and Dallas markets. Unlike law firms, where reduced demand for legal services in the economic downturn drove the well-publicized layoffs and delayed the employment of new law school graduates, corporate law departments had plenty of work to do and, from most general counsels’ perspectives, not enough lawyers to do the work. Hiring freezes and C-suite mandated reductions in force and budget cuts only aggravated the pent-up demand in GCs to insource more legal work. Most of our in-house candidates complained of too much work to do – but not too loudly, as they felt fortunate to have a job and were not inclined to search for greener pastures in the drought.

On the law firm front, Big Law is experiencing an early spring on the crest of the resurgence in deal-driven capital market activity (and the rejuvenation that portends for collateral practice areas in support of that driver). However, the majority of law firms remain in a wait-and-see mode about the pace of the economic recovery. The requisite projected billables need to be there before the “hiring in anticipation of need” paradigm returns. We expect that litigation will continue to take a back seat to transactional (corporate/securities/finance; m&a; commercial contracts; traditional and renewable energy deals) and specialty practice (antitrust; labor and employment; intellectual property/ technology; regulatory/compliance; e-commerce) areas in terms demand for recruits. Stand-alone real estate, tax, banking, healthcare (transactional, not regulatory), and bankruptcy practices are most likely to remain soft throughout 2011.

The good news is that employers’ energy is mostly positive and not negative or even neutral. Permanent hiring decisions will continue to be need-based vs. “blue sky” driven for the foreseeable future and more college graduates will necessarily contemplate a legal career more carefully. As the saying goes: we can thank our lucky stars we are in Texas!