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Law360 (July 8, 2020, 6:49 PM EDT) -- Nearly three-quarters of the millions in loans Texas law offices took out through the federal Paycheck Protection Program went to firms based in the state's major metropolitan areas, with heavy concentrations in Dallas and Houston, data released this week show.
More than 1,100 Texas law offices took out loans of more than $150,000 through the U.S. Small Business Administration program intended to ease the economic impact of COVID-19, data released by the U.S. Department of the Treasury shows. Of those loans, most were distributed to firms located in either the Houston, Dallas/Fort Worth, Austin or San Antonio metro areas, with more than half of the loans going to 317 Houston firms and 299 Dallas firms.
Two legal aid groups and five Texas law firms — Chamberlain Hrdlicka White Williams & Aughtry PC, McKool Smith PC, Thomas J. Henry Law PLLC, Thompson & Knight LLP and Thompson Coe Cousins & Irons LLP — were awarded the biggest loans, valued at between $5 million and $10 million.
Most Texas firms took smaller amounts, the data show. Roughly 60% of Texas law firms that received loans detailed in the data fell in the range between $150,000 and $350,000. Another quarter of Lone Star State firms receiving PPP loans took between $350,000 and $1 million.
Twenty firms received loans between $2 million and $5 million, including Gray Reed & McGraw LLP and Porter Hedges LLP.
Another 93 Lone Star State firms received loans between $1 million and $2 million, including Beck Redden LLP, Andrew Myers PC and Lynn Pinker Hurst & Schwegmann LLP.
At Texas Riogrande Legal Aid Inc., the state's largest provider of legal aid, the pandemic has increased demand for its services even as it decreased funding the group was receiving, the group said in a statement to Law360. TRLA was one of the two nonprofit groups to receive a loan between $5 million to $10 million.
"The PPP funding enabled us to maintain a planned expansion of our workforce to start to meet these needs," the statement reads. "If we did not receive that funding, we were considering retracting offers to bring on much needed staff to handle the increased demand for these vital services. Retracting offers and cutting out staff would have been harmful to our clients and the communities we serve and so we are very thankful [for] this program to help us bridge the funding gap."
TRLA said the practice areas that have seen the highest increase in demand during the pandemic are family violence, eviction, foreclosure and public benefits.
Dallas-based Munsch Hardt Kopf & Harr PC, which received a loan valued between $2 million and $5 million, told Law360 on Tuesday that it is using the one loan it received for employee-related expenses and rent. The firm said to date, it has been able to avoid layoffs and furloughs.
Dallas-based Thompson & Knight said earlier this week that the firm applied for a PPP loan to reduce the pandemic's impact on the firm, as most of the top industries it serves have been severely affected by the economic strains caused by the virus. Thompson & Knight didn't respond to additional questions about how the firm used the awarded funds.
A total of 10 nonprofit organizations received some type of loan under the program as well as 33 lawyers who identified themselves as either sole proprietorships or self-employed, according to the data.
A number of Texas firms declined comment or didn't immediately respond to inquiries about PPP loans.
Congress funded the Paycheck Protection Program as part of the Coronavirus Aid, Relief and Economic Security, or CARES, Act, a massive coronavirus relief package passed earlier this year. The program began with an initial infusion of nearly $350 billion, which was offered as forgivable loans to businesses that agreed to use the funds to pay workers.
On Monday, after complaints from lawmakers and advocates about a lack of transparency in the loan awards, the Trump administration released a flood of data on where the money went. The information revealed company names and the banks that awarded the funds but gave ranges rather than exact dollar figures for the amount of the loans.
Law360 reviewed the data and reviewed Texas' award distributions.
--Editing by Jay Jackson Jr.
For a reprint of this article, please contact reprints@law360.com.
