Dallas Continues to Make Strides as a Thriving Financial Hub as Texas Looks to Open New Business Courts
It has been said that it was JFK’s assassination in 1963 that put Dallas on the map. After the assassination, news outlets blamed the political climate in Dallas, and companies and individuals across the country refused to do business in North Texas — forcing Dallas to develop a rehabilitation plan for the city’s image. And boy has it worked, creating a need for the soon-to-embark Texas business courts.
In 1974, DFW International Airport opened halfway between Dallas and Fort Worth, almost instantly resulting in an influx of corporate business and population growth. Today, a multitude of Fortune 500 and other large businesses call North Texas home — McKesson, American Airlines, Southwest Airlines, CBRE, and Charles Schwab, just to name a few[1] — and more companies are making the move.
North Texas is not only the nation’s fourth largest and most centrally located metro area, but the Wall Street Journal recognizes it as a “Burgeoning Financial Hub,” second in the U.S. only to New York.[2] And burgeoning is right, as lower taxes, affordable housing, and simply an overall more cordial environment and mentality continue to lure. Goldman Sachs is building a $500 million tower (which will be its second-largest office), two Wells Fargo towers are underway, Charles Schwab (which five years ago moved its headquarters from California to Dallas) is constructing a new office, and Deloitte is doubling its footprint.
New York demonstrably remains the investment epicenter, but Texas is making up ground. Statistically, Texas investment banking and securities employment has increased more than 111% over the past 20 years, and 27% since the Covid-19 pandemic, dwarfing the respective growth of New York at 16% and 5%. Finance-related employment in Texas has risen 13% since the pandemic, while New York saw 2% growth and the U.S. saw 3% growth overall. There are no signs of these growth trends slowing any time soon, and Dallas continues to make moves to draw even more of the financial industry — e.g., the announcement of the Texas Stock Exchange (TXSE) to be headquartered in Dallas.[3]
But, with corporate growth comes corporate disputes, and Texas courts have struggled to keep pace. Corporate lawsuits can take years on end just to get to trial, due only to the court’s inundated docket. Intent on doing better and anticipating continued market influx, on September 1, 2024, Texas is opening a statewide business court judicial district with 11 business court divisions.[4] Modeled after Delaware’s Court of Chancery, the newly created business courts will be poised to tackle corporate disputes and allow the financial boom in Dallas to proceed, full steam ahead, more quickly and efficiently.
Companies, owners, managers, directors, officers, and board members alike need to be aware of the opportunity to utilize the business courts. As with any new law, there will be risks and uncertainties to consider, but businesses should discuss and evaluate with counsel so they are poised to take advantage of the potential benefits while mitigating risk.
If you have any questions about this article, contact Andrew Howell, who is a securities and financial fraud litigator in Foley’s Dallas office, or your Foley attorney.
[1] https://www.dallaschamber.org/wp-content/uploads/2021/03/BusinessEcon-MajorCompanies.pdf
[2] https://www.wsj.com/finance/welcome-to-yall-street-texas-burgeoning-financial-hub-29b712f4
[3] https://www.txse.com/
[4] https://www.foley.com/insights/publications/2023/05/texas-legislature-bill-specialized-business-courts/
