If you're an Aussie, Canadian or New Yorker, you should consider moving to Texas

Why should I move to Texas?

Since the pandemic, there has been a plethora of firms expanding their global footprint to the Lone Star State – including Kirkland, Latham, O’Melveny, even Ashurst, a market-leading London law firm has planted some roots there. At least seven BigLaw firms have opened offices in Austin alone. Law firms are following their clients, with many moving their HQs out of Silicon Valley including Oracle and Hewlett Packard. In fact, 95 of the Fortune 1000 companies of the world have their headquarters in Texas.[1]

So why are they moving there, and why should you?

Yes – we’re talking about tax…

…Or a lack thereof. Law firms and clients alike are flooding into the 3 major hubs of Texas (Austin, Dallas and Houston) and the main reason is there are huge tax breaks for corporations, which is unsurprising. There is also a multibillion-dollar corporate tax incentive program run by the State (which is due to end in 2022… but we’ll put that aside for now).

But what about your tax? Well, if you’re coming from New York, you can make at least a 6% saving on your total income depending on your salary as there is absolutely zero state income tax. Here’s a breakdown of what you’ll get in Texas:

Taxes in Texas:[2]

·???????There is no state income tax in Texas, only Federal.

·???????On a salary of $180,000, you would pay effectively 25.49% including Federal and FICA (take home $134,125)

·???????On a salary of $250,000, you would pay effectively 28.23% (take home $179,420)

·???????On a salary of $400,000 you would pay effectively 31.65% (take home $273,395)

·???????On a salary of $1,000,000 you would pay effectively 36.00% (take home $640,018)

Cheaper rent?

The average rent (per month) for a New York studio apartment is $3,638.[3] As a Londoner, that number astounds me. My rent for a 1-bed in London’s zone 2 was “only” ￡1,500 per month (that’s about $2,000 dollars). However that’s a myriad compared to Houston’s cheap rent which averages $1,263 for a 1-bed.[4]

Rent in Sydney is also extremely expensive, averaging around AUD550 a week[5] which is around $1,600 per month in USD and if you’re in Toronto, Canada, you are looking at about CAD2050 per month[6] which is around $1,500. So there are definitely savings to be made.

That’s also not taking into account the amount of space and the quality of the apartments you’ll get for those kinds of prices. The real estate options in Texas are far superior with huge apartments and most having a pool.[7]

Other things to consider:

Lower average target hours: The average target hours in Texas tend to be around 1,900 per year, which usually includes pro bono. Although some of the New Yorkers have opted to get rid of target hours, this may actually be because it’s a given that juniors will be smashing 2,000+ hours per year so they just don’t need to enforce targets. In Texas however, work-life balance is much more important and flexibility has been key even before the pandemic.

Less competition: Although there has been an influx of law firms to the State lately, there is still, and maybe even more so, a shortage of lawyers. As more firms come in, more jobs are opened and the possibilities to relocate are ever increasing. This has a number of benefits, for example as a junior you can be more selective on your move and as a Senior, the path to Partnership will be more certain.

Cost of living: Food, drinks, clubbing, transport, healthcare… all of these things and more are considered a lot cheaper than most places in the Western world.

Lovely, welcoming culture: Everyone talks about that ‘Southern Hospitality’ – and you’ll experience that in most places in Texas. In addition to its lovely personality, Texas has an exceptionally vibrant art and entertainment scene, with a number of festivals, concerts and theaters throughout the state. There are over 30 annual music festivals in Texas alone. Some of the bigger festivals, like South by Southwest and Austin City Limits, attract a global crowd.[8] Not to mention the amazing food and huge sports culture, including rodeos!

What about visas and/or qualifications?

• Australians can apply for an E-3 visa, which is actually pretty straightforward and shouldn't take too long to process. Also, if you've qualified as a lawyer in Australia, you will be fine to move to Texas, though you may need to reduce your PQE by about a year to accommodate the new market. It is always advisable to pass the Texas Bar, though it may not always be necessary.
• Canadians don't need a visa to move to the States. Furthermore, they shouldn't need a new qualification or reduce their PQE to obtain a position in Texas. Though it is always advisable to pass the Texas Bar.
• New Yorkers can move across to Texas without needing to pass the Texas Bar, however showing an intention to undertake it can help your application.

If you are considering a move to Texas, please reach out to Larissa at VARO Partners who will be glad to assist you:

Email: [email protected]

Phone: +447873705608

[1] https://fortune.com/fortune500/2020/search/?hqstate=TX

[2] https://smartasset.com/taxes/texas-tax-calculator

[3] https://www.apartmentlist.com/renter-life/average-rent-in-new-york-city

[4] https://www.rentcafe.com/average-rent-market-trends/us/tx/houston/

[5] https://www.sydneymovingguide.com/the-cost-of-living-in-sydney/

[6] https://www.zumper.com/rent-research/toronto-on

[7] https://www.forrent.com/find/TX/metro-Houston/Houston/extras-House-Pool?bounds=30.00570947969128,29.641137390090204,-94.94252003190877,-95.46437061784627

[8] https://www.moving.com/tips/10-reasons-to-move-to-texas/