Many small and medium-sized business owners have complained that they need an attorney to successfully navigate the rules and regulations of the Small Business Administration’s Payroll Protection Program.
Turns out, Texas attorneys have a pretty good grasp of the COVID-19 pandemic emergency funding process.
New data shows that Texas law firms qualified for 14,311 PPP loans in 2020 and 2021 for a combined value of $1.1 billion, helping to support more than 90,000 law-related jobs.
When the COVID-19 pandemic hit in March 2020, Texas courthouses closed. Trials of all kinds have ceased. Many law firms have closed their offices, which means billable hours have been reduced and there have been fewer new clients.
In turn, there have been fewer new lawsuits, fewer divorces and fewer depositions. While Zoom and Google Meet eventually became routine, most hearings were delayed for weeks or months.
PPP loans have benefited law firms of all sizes and in all areas of legal specialty – from divorce and criminal defense to personal injury and commercial contracts.
Houston law firms were approved for 2,990 PPP loans for a combined $280 million in 2020 and 2021, which SBA documents show impacted more than 21,000 jobs. Dallas law firms were approved for 1,836 $240 million relief loans that affected 16,241 positions. San Antonio law firms have been approved for 1,094 PPP loans worth $88.6 million, affecting 8,039 workers.
In the second half of 2020, judges and lawyers became familiar with virtual hearings and the legal industry started to rebound. In the 2021 pandemic emergency funding round, 3,487 Texas law firms were approved for $224 million, down significantly from the 10,824 firms that received more than $900 million in the first round of funding in spring 2020.
Firms with fewer than five lawyers accounted for the majority of those receiving PPP loans.
SBA data shows that several midsize business law firms in Houston — including Chamberlain Hrdlicka, Coats Rose, Perdue Brandon Fielder and Porter Hedges — have been approved for $3 million or more in PPP loans.
“(In) March, April and May (2020) all law firms were leaning into the abyss,” said Rob Reedy, managing partner at Porter Hedges. “It all stopped and the law firms had no idea what was coming or how long it would last. The PPP was a welcome insurance policy to avoid the idea of cuts.
Porter Hedges received $4.6 million, which was the third highest for a Houston law firm.
The Texas law firm that received the most PPP money — $10 million — was Dallas-based Thompson & Knight, a 107-year-old firm that had a few dozen attorneys in its Houston office. Earlier this month, Thompson & Knight merged with Miami-based Holland & Knight.
A total of 135 law firms have been approved for PPP loans of $1 million or more. Fifty of these companies are headquartered in Dallas and 39 live in Houston.
Fifty nonprofit organizations in Texas that focus on providing legal services to the poor, disadvantaged, and veterans also received the SBA loans.
For Houston-based Lone Star Legal Aid, the $5 million PPP package was essential.
COVID-19 has created a flurry of legal cases, says Lone Star CEO Paul Furrh. The organization, which serves much of the Gulf Coast region, had grown to a staff of around 400 – including 200 lawyers – following a flurry of Harvey-related cases.
Furrh said Lone Star – whose head office was destroyed in that storm – would likely have lost up to 50 of its staff had PPP funds not been available. Not only that, but the organization would have been unable to track the 25,000 cases it closes each year.
“We were still dealing with Harvey when COVID-19 hit,” he said. “The money helped us continue to help people who needed it.”
For a longer version of this article, please visit TexasLawbook.net.
/cloudfront-us-east-1.images.arcpublishing.com/gray/G52BUCP7WNAWZAZQQO4IO6MFJY.jpg)
/cloudfront-us-east-1.images.arcpublishing.com/gray/VFL5LWOJ3NHXRN6DJKDPLKAL3A.jpg)
/cloudfront-us-east-1.images.arcpublishing.com/gray/MOUNZMGS7FJQLGFWLJDSGJQ5XI.jpg)
