Empires of Paper
Three of the nation's largest law firms are in Houston. They have kept their awesome power, their pervasive influence, and their closed societies out of the public eye. Until now.
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THREE OF THE TEN BIGGEST LAW firms in the United States are located in Houston. Two of them rank as #3 and #4. In the past few months they have overtaken several Manhattan giants that were doyens of American law for decades before the men who lead the Texas firms were even born; their phenomenal growth shows no signs of slowing down. They are the talk of the legal profession.
These are the Big Three of Houston law:
*Vinson, Elkins, Searls, Connally & Smith (186 lawyers).
*Fulbright, Crooker & Jaworski (185 lawyers).
*Baker & Botts (160 lawyers).
Roughly two-fifths of the lawyers in each firm are partners, meaning they are senior men who own the institution and share its profits. The rest are associates,” younger men who work as salaried employees pending promotion to partnership status. There are currently 68 partners at Vinson Elkins, 69 at Fulbright Crooker, and 66 at Baker & Botts. The only firms in the country that remain larger than the two biggest Houston mammoths are the Wall Street firms of Shearman & Sterling with 226 lawyers; and Dewey, Ballantine, Bushby, Palmer & Wood with 197. No one outside New York is any longer even close: there is nothing in Chicago, Los Angeles, Philadelphia, Boston, or Washington to match them.
Nor is there anything in Texas either. Dallas has five firms over 30, but none over 45. San Antonio, Fort Worth, and Austin trail far behind. Houston lawyers speak of an “amoeba complex” that regularly causes Dallas firms to split into separate factions just as they approach the 50 mark. It doesn’t happen in Houston.
Their elaborate structure of specialized departments and sections is a far cry from the days of the country lawyer who hung out his shingle on the courthouse square. Though the labels differ from firm to firm, each of the Big Three offers specialists in corporate finance, banking, patent law, utilities, real estate, labor, admiralty, bankruptcy, tax, wills, trusts, and public law. They also have a separate breed of trial lawyers, men who would not think of trading the rough-and-tumble of the courtroom for any sort of office practice.
Houston’s Big Three have a national reputation for top-quality legal work. Local lawyers may sometimes joke about the big firms’ peculiarities, but no one underestimates their skill at handling the law. A successful small-firm trial lawyer in Houston who opposes big firms in courtrooms all across the country says flatly, “The lawyers I face from the big firms here in Houston are the best anywhere. They’re better than Wall Street, far in excess of O’Melveny & Myers [the top Los Angeles firm]. By and large, they’ve got the finest talent in the country.” Even discounted for a little Texas brag, the statement is not far wrong, judging from the opinions of their colleagues in bar associations nationwide.
The Big Six: A Floor Plan of Houston Law
THERE ARE THOSE WHO WILL argue that Houston law is dominated not by the Big Three but by the Big Five—or, as some would have it, the Big Six. The massive bulk of the giants does tend to obscure the fact that several other firms do a similar sort of legal practice with enough lawyers to make them giants in their own right if they were located in San Antonio, Dallas, or almost any other American city.
The oldest and most aristocratic of these middle-sized firms is Andrews, Kurth, Campbell & Jones, an exclusive group of 65 lawyers with many of the attributes of a social club. Very ingrown, they seldom fraternize with other members of the Houston bar. “It’s like a closed fraternal order,” says a successful solo practitioner who spent several years in another of the big firms. “They go to retreats together, that sort of thing. They judge your looks and your wife before they hire you—they take only handsome lawyers. They come to work late, and they quit early.”
They are also more paternal than others: once accepted into the fold, a young lawyer is virtually assured of lifetime security without the desperate competition that characterizes the ladder of success elsewhere. Andrews Kurth once shared the cream of the Houston practice with Baker & Botts, but after the death of its driving force, Col. Frank Andrews, in 1936, it threatened to wither on the vine.
In the past 15 years, however, it has come back strongly and is now generally regarded as having one of the finest collections of legal ability in the city. It is also considered suffocatingly conservative, even by conservatives. Political involvement is strenuously discouraged, with a conspicuous exception for Hall Timanus, the one-time chairman of the Wallace-for-President forces in Texas. For years the firm’s biggest client has been Howard Hughes’ Hughes Tool Company. Among their other major clients is the Missouri Pacific Railroad. The dominant figures in the firm today are Mickey West and Harry Jones.
Although the firm of Butler, Binion, Rice, Cook & Knapp comprises 85 lawyers, it has been described as “a small firm that happens to have a lot of people in it.” Formed in the 1940’s, it has never gone in for representation of large corporate clients whose work requires concentrated teamwork, and therefore has developed into a collection of feudal fiefdoms instead of a monolithic empire. Each lawyer reputedly has his own set of articles of incorporation, for example.
One consequence of this informality, individualism, and lack of tradition has been a certain unevenness in the quality of the legal talent there. The firm has some very able lawyers at the top, and others who are not so able. “They’ve got 50 per cent good lawyers and 50 per cent bad lawyers, and they don’t know which are which,” is the harsh judgment of a lawyer in the Big Three. Their attrition rate is admittedly high; good lawyers like Bob Singleton, Bill Wright, and Percy Williams have departed for greener pastures. On the other hand, no major Houston firm has a more distinguished record of elevating its partners to the bench. James Noel, a federal district judge in Houston; Malcolm Wilkey, circuit judge on the U.S. Court of Appeals which heard the White House tapes appeal; and state district judge Bill Blanton, are the most notable. As might be expected from such an individualistic firm, Butler Binion is far more tolerant and flexible about the political involvement of its members. Partners and associates are readily granted leaves of absence for political work. Steve Oaks, a partner, currently serves as Executive Assistant to Lt. Governor Bill Hobby, and Jonathan Day acted as campaign manager for Houston mayoral candidate Fred Hofheinz. Since the November, 1972, death of the firm’s remarkable managing partner, trial lawyer Jack Binion, its dominant figures have been B. Hunter Loftin and the “name” partners, Frank J. Knapp, Cecil N. Cook, and George W. Rice. It continues to do vast quantities of probate work, and counts among its clients the Bank of Texas.
With the Big Three, Andrews Kurth and Butler Binion make up Houston’s traditional “Big Five.” But the explosive growth of another business-oriented firm, Bracewell & Patterson, has stirred talk of a new “Big Six.” It has more than doubled in size in the last four years and now stands at 42 lawyers. Plans are being made to hire 15 more next year. “It’s a supergrowth firm, just going like crazy,” says a wide-eyed solo practitioner. B&P’s aggressiveness has clearly (and probably understandably) not met with the favor of the older, larger firms—in particular not with Baker & Botts, from whom B&P alienated the affections of an exceptionally able lawyer, Ed Marston, to strengthen their corporate department. The older firm steadfastly refuses to acknowledge B&P’s aspirations to major firm status. They dealt the upstarts a gloved karate chop this spring, when Bracewell & Patterson audaciously offered one of their partners, Hal DeMoss, as a candidate for President of the Houston Bar Association. The Bar Association, it seems, has a cozy tradition that a partner in one of the “big firms” will serve as president in odd-numbered years and someone from the small firms can have the job in even-numbered years. Except for Fulbright Crooker, the large firms never do much with the office, but they guard the honor jealously. Baker & Botts scowled that it was their turn this time, and besides, that Bracewell bunch wasn’t a big firm anyway. The contest became a colossal grudge match with both firms fighting for their self-esteem. “The activity at Baker & Botts was unbelievable,” recalls one young associate who lived through the experience there. “Nobody seemed to be doing any work for a while—the associates certainly weren’t. We were all on the phones, calling people to get out the vote. It was like saving Western Civilization.” Baker & Botts’ resources eventually succeeded in “electing their candidate, Ralph Carrigan, but not without some hard feelings all around. In 1975, B&P may try again, and may win.
Bracewell & Patterson, like Butler Binion, is a firm of uneven quality—a situation due in part to its rapid growth. Unlike the other big firms, it is willing to hire experienced lawyers, men who have practiced elsewhere, to shore up departments that have grown faster than the firm could manage. Politically it maintains a moderate conservative tone that occasionally slides into super-conservatism. With Butler Binion, it shares the distinction of being the only major firm still directed by the men who created it—in this instance, Harry Patterson and the two Bracewell brothers, Fentress and Searcy. The latter is well-known as a former Harris County state senator, present-day lobbyist for the utilities during legislative sessions, and one of the handful of authentically powerful figures in the downtown Houston conservative political establishment. (During the furious last days of the 1971 Legislature’s congressional redistricting fight, things came to a brief but firm halt while the members awaited a precinct-by-precinct map of the Harris County congressional districts prepared by Bracewell. It arrived with instructions that the legislators were not to change it by one iota. They didn’t.) Among the firm’s more prominent clients are the Houston Independent School District and Parker Brothers (the shell dredgers, not the manufacturers of games).
There are some areas of the law the big firms will not touch, principally divorce work, criminal defense work, and plaintiffs’ personal injury cases. Mention to a partner in one of the Big Six that you would like him to handle your divorce, and he will react as though he has just discerned an unpleasant odor in the room. In rare instances involving a valued client, a personal friend, or an extraordinarily enticing fee, this rule may be suspended, but for the general public the big firms will politely suggest taking your divorce elsewhere. Percy Foreman is the acknowledged grand sachem in the divorce field.
Criminal defense work is regarded as far, far worse, a sullying pastime if ever there was one, and. . .well, not very lucrative either. There is no point in a criminal defendant’s ever stepping aboard the elevator to one of the Big Six unless he happens to enjoy heights, or he has, by the luck of the draw, been assigned one of their lawyers by the court because he is indigent. (This sometimes happens, and occasionally a big firm lawyer whose practice is exclusively civil will acquit himself—and his client—brilliantly. Leon Jaworski at Fulbright Crooker argues forcefully that lawyers should welcome the professional duty of representing accused indigents, and has done so himself in state court cases). The day-to-day criminal law practice however, is handled by a largely penurious cross-section of specialists. Percy Foreman and his motorcycle-riding, pipe-smoking rival, Racehorse Haynes, are the most prominent criminal defense lawyers in the neighborhood.
Representation of plaintiffs in personal injury lawsuits is potentially the most lucrative branch of the law, but the big firms are effectively precluded from entering it because they already represent the defendants—manufacturers, railroads, insurance companies—who are being sued. It is a feast-or-famine business, but the feasts are regal indeed. One Houston lawyer who specializes in products liability cases (injuries caused by defective products) has two verdicts of more than $1.5 million to his credit, one over $1.6 million, and fifty over $100,000. The usual fee for successful representation in a personal injury case is about 30 per cent of the recovery, plus expenses. Handsome. The firm of Kronzer, Abraham & Watkins is generally regarded as the top personal injury firm in town, but Joe Jamail, the driving force behind the tiny firm of Jamail & Gano, is unquestionably the leading individual personal injury lawyer.
Any member of a bar association grievance committee will confirm that the vast majority of unethical practices are committed by lawyers on the fringes of divorce work, criminal law, and personal injury work. An observer of the Houston scene laments the reluctance of the big firms to become involved in these branches of the law (or at least in divorce and criminal cases, where no problems of conflict of interest arise). “If the large firms came down and got involved, the overall quality of the work would improve dramatically, I’m sure,” he says. “They have the ability and they know what an ethical lawyer is supposed to do. But they’re not interested because they’re afraid they’ll get themselves dirty. It’s a vicious circle. And the reputation of all us lawyers, good and bad, gets hurt by it.”
A variety of excellent smaller firms specialize in more or less esoteric branches of the law. Dixie, Wolf & Hall is the leader in the field of labor law on the unions’ side and Neel & Hooper is highly regarded on the employers’ side. Royston, Rayzor, Cook & Vickery is the top admiralty firm; like Butler Binion it is notably proficient at producing federal judges, including Carl Bue, a district judge, and John Brown, colorful chief judge of the Fifth Circuit. Arnold White & Durkee take their hats off to no one in the patent law field. Sheinfeld, Maley & Kay is excellent in bankruptcy cases. And there are several outstanding firms approaching 20 lawyers with a more general civil practice, including Hutcheson & Grundy; Childs, Fortenbach, Beck & Guyton; Liddell, Sapp, Zivley & Brown; Sewell, Junell & Riggs; and Foreman, Dyess, Prewett, Rosenburg & Henderson. Each is competitive with the giants, and each feels the pinch on legal business that the big firms’ domination causes. There are, in addition, a number of solo practitioners and three- or four-man firms who vigorously defend their way of doing things. Many of them—too many to mention—are quite able. But the Big Three remain the singular, dominant feature of the Houston legal landscape.
Baker & Botts: Doing the Deity’s Work
FOR MANY YEARS BAKER & BOTTS was the largest and most prestigious of the Houston law firms; until the late 1920s it held a virtual monopoly on the city’s desirable law business, except for the share claimed by Andrews Kurth. From this commanding position it has now slipped in size to a somewhat distant third. But it has lost none of its classy reputation.
There is something remote. . .foreign. . .even Yankee. . .about Baker & Botts, despite its undeniable pedigree in the Houston establishment. From its earliest days it has been the East Coast’s team in southeast Texas, representing Northern brokerage houses, utilities, lumber companies and other absentee landlords, and railroads. From the 1870s to the 1930s, when the Southwest was just another province in an economic system that was centralized in the East, these interests required trustworthy lawyers to cultivate their Texas gardens, and they found them. Baker & Botts grew with its clients. One of their most prized documents is an original hand-written $10,000 retainer from a corporate predecessor of the Southern Pacific Railroad, dated 1872, six years after the law firm was founded in the wreckage of the war-torn South. The partner who handles Southern Pacific’s business today preserves it in his files.
None of the other Houston firms has anything like this sort of tradition. It sustains the B&B lawyer in his serene detachment, a detachment that in turn goads other lawyers to mutter sourly of, “the Baker-Botts halo” and dream of puncturing the self-righteous aura that surrounds the firm. Ask a member of Baker & Botts about his competitors and you will hear a scornful series of Olympian thunderbolts, two-thirds serious, concerning everyone but Andrews Kurth, the one firm to whom B&B graciously extends full diplomatic recognition because (some say) it is the only group of lawyers not suspected of scheming to lure away a valued client or two. He views his firm as “national” rather than regional, the equal (which in many ways it is) of practitioners in New York or Philadelphia.
Lawyers at Vinson Elkins and Fulbright Crooker are equally convinced of the superiority of their own firms, but they do not express their feelings with the same self-assured air of patrician certainty as the B&B man does. He seems satisfied to believe that his soul remains in Wall Street, Greenwich, Westchester, or Cape Cod, while his body has been temporarily assigned to these steamy Gulf Coast marshes in furtherance of the Deity’s inscrutable barristerial design.
A strict sense of legal professionalism is the dominant concept—critics would call it an obsession—at Baker & Botts. More than any other of the Big Three, the firm scorns partisan political activity. Young associates are rigorously chosen for their grades and rank in class (“mental gear,” says one). It is the firm least likely to be caught in a conflict of interest. It is also the firm least likely to have welcomed retiring Governor John Connally into its fold-in fact, they instinctively wouldn’t have done it. We have a very formalized set of procedures around here,” remarked one B&B member. “To bring someone in from The Outside—anyone—just upsets our traditional way of doing things.” Secrecy about the firm is almost a fetish; the managing partner never bothered to return calls or acknowledge letters from Texas Monthly requesting an interview. Said a young associate: “It’s just imprudent, unwise, and very unBottsian to talk to the press.” Baker & Botts prides itself on the fact that it has never sued a client over an unpaid bill. From this tight little island the severest censure that can be hurled at another lawyer is the epithet, “unprofessional.”
Baker & Botts’ offices occupy all of the 29th, 30th, and 31st floors (and parts of two others) in Houston’s tallest skyscraper, One Shell Plaza. A swift ascent in the building’s famous leather-lined elevators [TM: Briar Patch, May, 1973] deposits the visitor in a tastefully modernistic world of Vasarely wall hangings, glass tables, and stylish furniture. The rich blond wood called prima vera that panels the walls grows in just a single Central American country and represents (so the story goes) more than half the total world’s supply. It is worth whatever they paid for it. The decor, so different from the traditional dark intimidating law office atmosphere, provides a cheerful feeling of airiness and openness.
Presiding over this legal department store is the most able group of senior partners in the city. Baker & Botts has its share of deadwood at the top—patriarchs who make $250,000 a year and do virtually no productive work—but one of the signal advantages of a giant firm is that it can afford to put its superannuated partners out to pasture as civic front men. (Similarly, lawyers who turn out to be duds can be hidden away as workhorses who never tarnish the reputation of the firm by coming into contact with clients or the courts.) The majority of B&B’s senior partners are exceptionally fine, and among them power is more diffused than it is at Fulbright Crooker or Vinson Elkins.
Three men, however, stand out within the ruling executive committee: William Harvin, George Jewell, and John Mackin. Harvin is the mandarin of mandarins—a formidable trial lawyer who acts as managing partner. Associates view him as a frustrated corporate lawyer, a man who would be more at home in the gilded world of conference rooms and Boards of Directors. He keeps his cards close to his vest. Brilliant, poised, and cold-blooded, he first came to B&B as an associate whose mother was the firm’s office manager. The anti-nepotism rules that prevented founder James A. Baker’s great-grandson from joining the firm that bears his name (he went instead to Andrews Kurth, of course) did not apply to the sons of employees; and Harvin, bred in the firm as few others have been, has become perhaps its most tenaciously loyal leader.
Jewell runs the tax department. Affable and tough, he has leapfrogged over a score of older partners to reach his present position. Ability got him there.
Mackin is regarded as something of an enigma by everyone. A widely read man, he is powerful because his department (the corporate section) is itself so powerful.
Baker & Botts is now in the midst of a more-or-less orderly transfer of power from the men who arrived in the flush years of the late 1920s to those who belong to the postwar generation. (Only a handful of partners came in the 1930s.) Discreetly, they are fighting over the only things they consider worth fighting over: money, control, and the type of clients they will cultivate. Whatever the outcome, one thing is certain: the large clients like Pennzoil, who provide over a million dollars a year in fees, will continue to be taken care of.
Vinson Elkins: Jet-Set Superlawyers
VINSON ELKINS IS NOT ONLY the largest law firm in Texas: it is the third largest in the world and in reach of the top. If Baker & Botts is patterned after Wall Street practice, VE is the closest thing Houston has to the legendary Washington superlawyers. The analogy is not perfect because VE spends the overwhelming part of its time on very traditional types of legal business; but the rest of the time it is political to a degree that no other Texas firm can match.
The offices that sprawl across the 20th, 2lst, 22nd, and 25th floors of Houston’s First City National Bank building (and parts of two other floors as well) are a surprisingly prosaic setting for the power that emanates from within. The reception area is an elevator lobby unsuccessfully disguised as a living room. Paintings of scenes from ancient Rome and antique cabinets containing finely-bound but unread classic law books line the walls, and the view in either direction is down long corridors oppressively reminiscent of federal office buildings, suffused with a pink light. There is an air of intense activity; young lawyers in white shirtsleeves and respectable ties dart briskly from one door to another, bearing sheafs of papers and intent expressions. In a random five-minute period one afternoon, 37 people passed in front of the reception desk.
Both the building and the law firm are a striking monument to the tenacity of one man, although others have improved upon his original plan. He was James Elkins, a county judge in Walker County, who came to Houston in 1917, allied himself with the young law firm of Vinson & Townes, and founded the City National Bank. The firm’s fortunes were the bank’s fortunes; they grew together. Judge Elkins had a winning combination, and he played it for all it was worth. He lived to be 93, but the legend of his strong will may outlast him by a century. Said a lawyer who knew him in his heyday: “There wasn’t a man alive who could dominate anything Judge Elkins was in, except Judge Elkins.”
He made all the decisions at both institutions for practically half a century, never bothering to get anyone else’s approval. Lawyers work on Saturdays, he said, and a hundred VE attorneys attired in coat and tie duly trooped to their desks each Saturday morning until 1969, almost a decade after the other firms had made such appearances optional.
Lawyers wear hats, he said, and hats were worn. It is conceivable that by the mid-sixties, half the hats sold in Houston were purchased by Vinson Elkins lawyers. A young Kennedyesque associate, new to the firm, vowed he would be damned if he would wear a hat. One day as he was leaving, he chanced to encounter Judge Elkins in the elevator Granitic stares. Uncomfortable silence. Finally: “Young man, I see that you do not have a hat.” Came the abashed and craven answer: “Sir, I did have a hat, but somebody stole it, and I’m on my way out right now to buy another one.”
Vinson Elkins, unlike Baker & Botts, built its strength on local business. In the 1930s it was a “four-client firm”: the Great Southern Life Insurance Company, Moody-Seagraves, the production end of United Gas Corporation, and Pure Oil Corporation. All but the last were headquartered in Houston. Judge Elkins saw another resource, however, and exploited it brilliantly. The local independent oil men had never catered to Baker & Botts; they always thought it was too close to the big oil companies and Eastern finance. The Judge, wearing his banker’s hat as president of First National, gave them loans; VE in turn did their legal work. The firm prospered by carrying them on the cuff while they drilled dry holes and collecting when they finally hit. This neat little arrangement catapaulted VE into the big time.
For VE’s future, however, the worm in the apple was Judge Elkins’ embarrassing penchant for hiring the sons of clients and judges, young men whose legal abilities were not always readily apparent. His purpose was to gain what lawyers call “client access,” and it worked for awhile: business boomed. But the firm became less and less able to handle that business properly. Enter, then, the second of VE’s guiding lights, David Searls, whose influence grew as Elkins aged. Searls served only briefly as the official managing partner, but he was the dominant figure in the firm for over a decade, from 1960 until his death in October, 1972.
Searls, a nationally-known trial lawyer, recognized that the firm needed a transfusion of brainpower. He wrenched the hiring practices around to place a premium on merit. His efforts were rewarded in 1963 when VE swooped down on the University of Texas Law School and carried away practically all the top graduates of a class that is still remembered by professors as the finest in the school’s history. It was an event that transformed VE and revolutionized the Houston legal scene. The new recruits set to work devising methods for winning others, and during the remainder of the decade their lavish recruiting program enjoyed success after success.
Searls gave an astonishing amount of authority to these younger men, particularly Harry Reasoner and Richard Keeton. Together they initiated most of the basic reforms that swept through the Big Three in the Sixties, reforms that included sharply increased salaries for new associates, a shortening of the time required to become a partner from ten or 12 years to six, and a wider system of participation to replace ironfisted one-man rule. VE developed a reputation as the most aware and enlightened firm in town.
Searls was genuinely beloved and widely mourned. Today his picture sits on the desk of many partners, a white-haired fatherly figure alongside snapshots of their wives and children. One can talk to Houston lawyers for weeks about their peers, past and present, without hearing an unflattering word about the man.
Since his death, there is a growing feeling that the firm has begun to slip a little. Control has shifted to A. Frank Smith, Marvin Collie, and of course John Connally. Although Connally has generally been regarded as a progressive force, his busy role as Presidential advisor and Republican politician has left him little time for day-to-day decision-making about VE’s policies. As the official managing partner, Smith has increasingly set the tone. Those close to the firm perceive a definite reaction against “the liberals, long-hairs, and fancy dressers.” Recruitment has changed, and less say is given to younger partners and associates.
The “45-year-old bracket”—men who for years felt voiceless as Searls passed them over to share his power with the younger men—dominate Smith’s executive committee. (Smith himself is 58.) Rivalry between the two groups is subdued but obvious even to the outsider. Where it will lead is anybody’s guess. Worried associates observe that the 45-year-old group built up a substantial body of resentment and discontent watching the younger generation enjoy fatter salaries and swifter promotions than they themselves had been privileged to receive at such an unseasoned age; deprived of their turn at power for so long, they are unlikely to relinquish it willingly. And they are still relatively young themselves.
Whatever problems Vinson Elkins may be having with its generation gap, however, nothing has interrupted the phenomenal growth of its already-high-quality clientele. The firm represents such corporate giants as Texas Eastern, Pan Am, Halliburton, and Occidental Petroleum (the last three, Connally is said to have brought in), as well as the extensive Cullen family interests. More are coming in every day, attracted from far beyond the borders of Texas by the former Treasury Secretary’s reputation for thaumaturgy. “Everyone wants to hire him,” smiles a VE partner, “because everyone wants to get acquainted with John Connally.”
Fulbright Crooker: Texan to the Core
FULBRIGHT, CROOKER & JAWORSKI is the johnny-come-lately of the Big Three, a big gangling giant that seems as surprised as anyone else by its position as one of the nation’s four largest firms. The Eastern pretensions of the other two are missing here: FC is Texan to the core. Aware that it lacks B&B’s lofty tradition and VE’s jet-set polish, it has stewed itself into a massive inferiority complex over the years. A lawyer at the other two who brags about his firm will simply take for granted that the listener considers it Number One; by contrast, a lawyer at PC is likely to say plaintively (as one did), “I hope you’re going to be as fair to us as you are to the other two.”
There is no question that Fulbright Crooker is a somewhat different genre: less sophisticated, less affected, more friendly, open, and down-home. It is much less secretive than the others. No one ever calls it stodgy. Says a former member: “Through the years, Fulbright Crooker has always wanted to hire the best, but only if they were Good Ole Boys.” Asked for a capsule description of the Big Three, another Houston lawyer thought a moment and said, “Baker Botts plays golf; Vinson Elkins plays tennis; Fulbright Crooker hunts.”
These differences provide fuel for one of the most popular (and catty) parlor games among Houston lawyers: making fun of Fulbright Crooker. “Their suits are shinier; mostly they wear Hong Kong silks,” sniffs a VE wife. “They look a little bit corny, like they could wear a string tie to work.” PC lawyers absorb this sort of thing with stoic indifference; but it hurts. They respond by redoubling their efforts to make a mark in various highly-visible civic and professional endeavors. It is no accident, for example, that PC always controls the Houston Junior Bar Association, nor that its senior partner, Leon Jaworski, won election as President of the American Bar Association. The firm has an unquenchable thirst to gain acceptance by its peers.
The most persistent criticisms of Fulbright Crooker involve its alleged ruthlessness and disregard for the customary rules governing conflict of interest. “They don’t see a conflict of interest …ever,” charges one of their competitors. More than any other of the Big Six, Fulbright Crooker has been touched by scandal. The Haden will contest, the Andrau airport, and the first Sharpstown scandal (in 1957) are oft-cited examples. Similar accusations float like wraiths around the Houston bar. “There is a constant feeling of impropriety about the firm,” remarks a middle-aged solo practitioner. “Conflict of interest is not a term often heard around there.”
In fairness to Fulbright Crooker, one must readily admit that it is difficult to measure how much of this criticism is truly righteous indignation and how much is just mean-spirited professional jealousy. As the solo practitioner acknowledged, “These older firms know how to use power and they are pretty proud of it. When somebody else comes along who is able to do the same thing, they get knocked.”
Even the harshest critics of the firm are quick to praise the caliber of its work in many areas. PC is nationally recognized for its insurance defense trial section, headed by Newton Gresham. “They’re probably the best firm in the country in that field,” says a University of Texas law professor. Their labor law section, headed by Larry Clinton, is “far and away the best in town.” Their admiralty work is equally fine. And virtually every department is laced with men whose legal abilities match or exceed those of their rivals in other firms. Although Baker & Botts is considered pre-eminent in corporate financing and Vinson Elkins in oil & gas, the overall professional quality of the Big Three is remarkably close to being even.
Fulbright Crooker has also been something of a pioneer in chipping away racial barriers and other forms of discrimination. It hired its first Jewish lawyer about 15 years ago, well ahead of the other Big Six (one Jew did practice briefly at Baker & Botts in 1917). It is not the only firm to hire black law clerks in recent summers, but it topped all the rest by hiring a black girl and offering her an associateship at summer’s end.
The firm is governed by a seven-member management committee, three of whom are among its most senior partners. But the dominant figure is Leon Jaworski, known to all as “the Colonel,” who has been the committee’s chairman for years. His rule is not the monolithic kind Judge Elkins practiced; other partners, particularly Krait Eidman and Gresham, possess real influence. Gibson Gayle is an up-and-coming figure. But Jaworski is the man that matters.
His corner office on the 8th floor of the Bank of the Southwest Building is cheerful, comfortable, and decorated as discreetly as possible with the avalanche of photographs, awards, and other memorabilia he has received during several decades of civic activity. (Students of the Houston skyline who associate elevation with status have noted that Baker & Botts looks down from its lofty perch on both of the other two, while Vinson Elkins has at least the satisfaction of looking down on Fulbright Crooker.) Sobriety is the keynote of the firm’s reception. area, where leather chairs and oriental vases are balanced by bookcases containing rare editions of Smollett’s History of England and bound volumes of The Spectator. The mood of traditionalism and affluence is enhanced by portraits of Jefferson and Marshall along with an original landscape painting or two (of English pastoral scenes—not Hill Country bluebonnets).
It is impossible to dislike Jaworski. A winning blend of Legal Lion and small-town Chamber-of-Commerce booster, he never gives you a chance. His enthusiasm for Fulbright Crooker is infectious. Although he has never been fully accepted by the old Houston legal and social establishment, he is exempted from the reproofs that they sometimes levy against his firm. “The Colonel,” says one, “is still a man who has judgment.”
“Our really phenomenal growth has been in the last decade,” Jaworski says. From 56 members in 1955, the firm grew to 108 in 1965 and has reached 185 “as of today.” He recalls that a meeting of the entire firm two years ago had to be held in the auditorium of the Humble Building, five blocks away, because there was no room large enough to hold everyone at the Bank. (If they had all marched down there together, one supposes they would have needed a parade permit.)
He is convinced that the big firms will keep on growing. “There’s not a psychological barrier at 200,” he says. “Years ago I said that when we reach 100 lawyers we ought to put on the brakes because we’ll be getting too unwieldy. I could not have had a more complete misconception. Either you keep growing or you run the risk of stagnation.”
Fulbright Crooker got its start in 1919 through the liaison of John H. Crooker and R. C. Fulbright, an expert in tax and transportation who spent much of his time in Washington, D.C. (The firm has had an office there from the beginning.) Their principal client was Anderson Clayton & Co., a cotton compress company which had the perspicacity to corner the world market in cotton after World War I. As far as the firm’s vigor was concerned, having Anderson Clayton for a client was like having a lifetime supply of Gatorade. The company is an even bigger giant today, although it has switched to food processing, insurance, and vegetable oils. After a merger in the years following World War II that brought in a large amount of high-quality insurance defense work, FC began to grow in earnest. Clients included legendary oilman Glenn McCarthy, the M.D. Anderson Foundation, and the Second National Bank, now the Bank of the Southwest.
Jaworski surveys his firm as a benign father might contemplate his happy family. “I have never seen a team work together like these boys do,” he beams. “Why, the way these boys pitch in and I help when someone else’s ox is in the mire is amazing. They’ll even stay down here at night.” It is like being captain of the world’s finest steamship.
Most vivid of all, perhaps, is his obvious, pardonably Texanish pride in the sheer bigness of it all—how it is booming, going great guns. “We’ve got men going all over the world,” says the man who began his career when Houston was just another provincial city never dreaming that it might one day sit in the seats of the mighty. “We even have an office in London now.” Did you send someone over there to run it? he is asked. “No, we didn’t have to. About a year ago we got a man from Mobil Oil to head up the operation. He was already familiar with that part of the country.”
How the Big Firms Got That Way: They’re Big Because They’re Big Because. . .
WHY HAS HOUSTON PRODUCED THESE immense law factories? The question is really two-fold: Why did they become so big? And why do they stay so big?
The conventional answer to the first question is that they grew because of their intimate associations with the big banks. This holds true for Vinson Elkins and Fulbright Crooker; for Baker & Botts, less so. But it is not far wrong with B&B, either. The banks generated a lot of business for their allied firms, and, more importantly, they sent a lot of business upstairs. Houston’s banks have traditionally done business with a single firm, in contrast to those in Dallas which have parceled their business out and played one set of lawyers off against another. These different modes of operation were partly foreordained by the unusual way some Houston banks happened to develop: Judge Elkins’ dual role as banker and lawyer is only the most obvious example.
An even more important reason, though, was the sheer forcefulness of the personalities who ruled the Big Three in their formative years. Men like Judge Elkins, John Crooker, and Captain Baker at Baker & Botts held the firms together by the strength of their own wills in the crucial 1920s and 1930s. The centrifugal forces that have held sway in Dallas—where the Turner firm reached 45 or 50 and split, the Carrington firm 30 or so and split—were held in check by these extraordinary men at precisely the time when their firms were still small enough to break apart. By avoiding the break then, they ensured it would probably never come.
As a partner at Vinson Elkins observed, “There comes a point of ‘critical mass.’ Beyond a certain point—perhaps 50 or so—large firms are so much more profitable because of the size of the clients they can attract and the specialization they can bring to bear.” A group of partners could conceivably have walked off with half the clients of one of the Big Three in the Twenties; now they never could. One does not walk off with Texas Eastern, Pennzoil, or Anderson Clayton. They are too big to put in one’s briefcase—and their loyalties now are to the firm itself and not to the lawyer who handles their business (or part of it) at a given moment. The real reason for the Big Three’s size is to be found in history, rather than in anything that is happening today. It is no riddle to say, “They are big. . .because they are big.”
This is not to deny that there are other forces helping to keep them big. Some of these are common to law practice in other major cities: the sustained boom in legal business for the past decade, dumping more work than they can handle on the major firms; Houston’s own growth; and, fascinatingly, the introduction of the jet airplane. By making Washington and New York as accessible as Austin, it has opened up new vistas in branches of the law heretofore monopolized by firms along the Eastern seaboard—representation of clients before federal agencies like the Federal Power Commission and the Securities and Exchange Commission, for example. As VE partner Evans Attwell observes, “As late as the Fifties, the only way you could get up there was by taking a three-day train trip or flying an uncomfortable DC-6. Now you can leave in the morning, be in DC by noon, have your conference, and be home that night. It’s opened up a whole new world of federal practice to us.”
There are also forces peculiar to Houston that help keep the big firms big. Foremost among them is the special status, the patina of prestige, that they have acquired in social and legal circles. A lawyer loses it if he leaves. In Dallas no one would care; in Houston they do. A lawyer who severs his ties with one of the Big Three must face the fact that he is choosing to be an outsider from then on; it is not an easy thing for some men to do. Leaving that elite peer group relationship takes a bite out of his ego. If he is a partner, it may also take a sizeable bite out of his bank account. The lawyer on the move is always under economic pressure: the house always costs $10,000 more than he can afford. For a partner to abandon the built-in security of the big firm is usually judged to be a pretty poor gamble. Some of the firms have penalty clauses in their partnership agreements, requiring the departing ingrate to forfeit the value of his partnership interest, which can be substantial, and refrain from competing with Alma Mater’s business for as long as five years. All in all, it is easier to stay put. Besides, most of the people in the big firms like what they are doing. It is a simple thing, but it escapes most of their critics, who reason that lawyers in large firms must somehow be miserable. “The cement that’s kept the big firms together,” says a lawyer at Vinson Elkins, “is the fact that they mediate the economic life of Texas. They resolve the most intriguing problems a lawyer can imagine, and they do it every day.” Another young associate puts it even more simply: “I like large firms,” he says, “because I can work on interesting problems with qualified people. . .for money.”
Is Big Best? The Large and the Small of Things
IF YOU’RE LOOKING FOR A LAWYER to handle your business affairs, should you head for a big firm or seek out one of the smaller ones? It depends, naturally, on whom you ask.
Hank Webeldor (a pseudonym) is a promising young associate at Baker & Botts, wise beyond his years. He argues persuasively for the big firms. “Let’s face it,” he says, “they’ve got brand-name confidence. The client knows he’s not going to get fly-by-night legal service. But even more importantly, he knows the big firm has as much to lose as he does if things aren’t done right.
“You can find outstanding, brilliant lawyers who practice alone or in small groups. Look at their work and you can see they’re worth their fee. But when you find an organization which is able as an institution to bring off work comparable in excellence to that of a brilliant, charismatic lawyer, then you’ve got a remarkable situation.”
Webeldor concedes that big clients stand to gain the most from hiring a big firm. “A very big client can count on the firm to have all the available manpower he needs. Say you want to merge two companies and do it right. You’ll have to merge their pension plans. That’s intensely complicated. But there’ll be a man in the big firm who does nothing but pension plans—and he’ll be ready and available to talk to the client. The same thing goes for anti-trust questions, securities, and so forth. If it’s a big deal, you’ll probably have two anti-trust guys, four corporate guys, two tax guys, a patent-trademark guy, and some real estate guys. The whole thing can be done in one place without winding up in the soup.”
But what about the little man, the small businessman who just wants to set up a corporation and doesn’t need all that expertise? What’s the point of his going to one of the giants? Webeldor’s answer sums up the big firms’ self-perpetuating success story: “A blue chip law firm gives instant credibility to a new business.”
Ray Needham, an energetic and articulate young labor lawyer who has put his chips in with the four-man firm of Schlumberger, Hinsley & Westmoreland, sees, on the other hand, a new breed of businessman developing—one who doesn’t want the same kind of relationship to his lawyer that his father had.
“Houston business was created by gunslinger-types,” he says. “They were happy with the big firms because they’d grown up with them. But now their sons are taking over, and they want someone they can call ‘their lawyer.’ They want a guy whose advice they can trust, somebody who’s not just a narrow specialist. They want a real person they can see, not a vast anonymous structure.
“They’ve been going to the big firms by default, because they know they can get good work done there; but they know the big firms are always going to give first attention to their big clients, and they’d much prefer to work instead with someone they know—if he’s good. You’re going to see things loosening up around here as they take over.”
There are hazards for the small practice, though, attitudes which alarm solo practitioner Brooks Pollard (a pseudonym. Pollard was associated with one of the Big Six for several years; now on his own, he agrees that many good clients are intimidated by the larger firms. But he worries about some of them.
“You have a lot of businesses who don’t particularly want the kind of professionalism the big firms represent,” he says. “There are lots of lawyers in Houston making bundles of money with an eighth-rate practice. A client calls and says, ‘I want a contract and I want it now and I want it on one page’—so the lawyer does it. It’s gross, horrible, sloppy—but he does it. And the client is happy because he controls the lawyer.
“A large firm has the ability to maintain its professionalism and resist client wiles and manipulations much better than someone who depends on that client for perhaps one-fourth of his total income.”
You pays your money and you takes your choice.
Life in the Firm: The Bonds of Affluence
AN ARTICLE IN FORBES MAGAZINE two years ago neatly capsuled the economic realities of a large law firm:
Economically speaking, a law firm is a very simple structure. It buys brainpower wholesale—by the year, that is—and sells it retail—by the hour.
Less than half the members of the large firms are partners. The rest are associates, working long hours for a fixed wage and waiting for the day when they may be allowed to “make partner.” They typical starting salary for someone fresh out of law school who goes to work for one of the Big Three is now $15,400 a year. This figure has risen dramatically in a short time. In 1967, $7500 was considered good; in 1969, the going rate was $13,200. Compensation for this wholesale brainpower increases by about $2400 each year the associate remains with the firm; about the time he is getting nervous about being made a partner, six or seven years after he arrived, he can expect to be earning in the neighborhood of $25,000 to $30,000.
This may seem like a lot of money, but it is actually only a small fraction of the revenue he produces for the firm. Therein lies the rub, as far as many an associate is concerned. Billing clients by the hour for his work, he may bring in $80,000 to $100,000 in annual receipts. His overhead is perhaps $10,000, and the remaining $40,000 or so (after his salary is taken out) is siphoned into the coffers of the firm, to reappear at the end of the year in the pockets of the partners. This difference between the money an associate produces and the cost of hiring him—billing cost versus talent cost—is what makes the big firms roll.
Obviously it is in the partner’s interest to squeeze as much profitable labor as possible out of their associates. The associates don’t get paid extra for doing more; the partners keep the revenue. “The only way they make so much money is for the associates to overproduce,” says a bright young lawyer who left one of the Big Three.
To the outsider there is something chilling about the cynical ways associates are induced to “overproduce.” Long hours are expected and demanded; it is not uncommon for a young associate to be at work before 8:30 a.m. and come home after 9 at night. Work regularly spills over onto Saturdays and Sundays. Wives, families, and outside interests are neglected; the firm is an all-consuming thing. Some lawyers often work sixty and seventy hour weeks. “There is a moral imperative to spend long hours at the office,” says an associate at one of the Big Six.
Fear is what keeps things going—fear of not being made a partner, fear of being resented as a laggard by one’s peers. As an ex-Marine figuratively put it, “It’s like basic training: if one guy falls behind on laps, the whole group has to do them over.” An associate who tries to live a normal life is plagued by gnawing fears that one of his friends is back at the firm doing something he himself ought to be doing, and cussing him for it; or that displeased partners are preparing a package of switches and ashes for him at promotion time.
“The older men want to take too much out of the firm,” says a young associate who left one of the Big Three considerably disillusioned. “By the time they draw a hundred-and-fifty, two-hundred, two-hundred-and-fifty thousand a year, they are rich men. But they derive satisfaction out of pushing it higher and higher, even though it’s ordinary income and taxes take a huge bite. It hurts the firm and it discourages the associates. But it’s a way of explaining to themselves that the treacherous climb to the top was worth it.”
The firms are ruthless about exposing idlers who do not carry their share of the excessive load; conversely, they make certain that those who work themselves dizzy are properly rewarded—with praise, of course, not money. Baker & Botts annually circulates a sheet ranking the associates according to the number of hours each has billed during the year: woe betide the young man whose total slips much below 1750 hours, and 2000 is a safer figure. If an associate partner did nothing but “billable” work eight solid hours every workday for 50 weeks a year, he would barely reach the mark. Since, in the nature of things, it’s impossible (ethically) to bill a client every minute he spends at his desk—six billable hours out of eight is doing well—most associates work nights and weekends to make up the difference. Others skip their vacations. Vinson Elkins is even more domineering: the billing totals for each lawyer are circulated each month. The sheets are reviewed by older partners who worked even harder in their day and don’t take kindly to young whippersnappers who fail to appreciate how lucky they are. They know if you’ve been bad or good, so be good for goodness’ sake!
The physical working conditions are, of course, superb. Messengers, day and night secretarial shifts, comprehensive libraries, even (at Baker & Botts) desk switches that open and close office doors by remote control. “You don’t have to bother with the details of running a law office,” says a happy associate. “You can concentrate on the law.”
But the price for these advantages is steep, and it must be paid in the coin of personal independence and freedom. The firms regiment their members’ dress, their access to clients, even the decor of their offices. A story now making the rounds in Houston tells of a young associate at Vinson Elkins who decided that his north-facing office did not need curtains; “heresy,” said the office managers, and they hung the curtains anyway. For a decorative plant he chose a hanging basket instead of one that sat on the floor like everybody else’s; soon he was summoned by the managing partner and ordered to take it down. Except at Fulbright Crooker, which has a reputation for leniency, political activity by associates is notoriously restricted. They can vote for whomever they please, but to take an active role in a campaign is courting disaster unless the management approves. In the opinion of a VE partner, a lawyer is taking an “active” role if he receives calls about the campaign through the firm’s switchboard during the day.
Even more burdensome to the self-respect of some proud associates is the knowledge that they are virtually forbidden to discuss their work—the major portion of their life—with their best friends outside the firm. It is not a matter of disclosing professional secrets or confidential client relationships; no reputable lawyer will do that. They know that the censorship imposed on them is broader; if they are observed talking about even the most innocuous matters, like the leadership of the firm or its history, their trustworthiness is made suspect and their advancement threatened.
This writer has interviewed political dissenters in Czechoslovakia and “banned” African revolutionaries in South Africa, meeting them in obscure cafes and parked cars to avoid detection. By all odds, associates in Houston’s Big Three are more reticent and fearful than either. One old friend who did talk (but not about his firm) was obviously distressed by his sudden loss of freedom to discuss his work; he kept returning to the subject, trying to explain his predicament as the inexorable consequence of choosing to go to work there—like volunteering for the Army (a recurring image). “You obey orders in the Army,” he said, “even if you’re told to paint the tanks pink. You can question them logically, but if you’re told to go ahead, you do it. The whole training of a lawyer in the big firms is to know your place in the organization—to avoid being presumptuous. One shines in one’s work—not in extracurricular things. You don’t talk about the firm unless you’ve been authorized to do it, any more than you allow a default judgment to be entered against your client. At all costs you have to avoid whatever can be seen as indiscreet.”
Other young lawyers who come in contact with their friends at the big firms wonder out loud why they don’t mutiny. “Why do they put up with it?” asks one. “Why don’t they go on strike, why don’t they get the hell out? I’ve never understood it.”
The answer, not surprisingly, is the alluring promised land of a partnership. “Make partner” and your income almost doubles right away—suddenly you’re a sixty-thousand-dollar-a-year man, and right at Christmastime, too. It is delicious. Who would risk taking a chance at losing that, especially when the firm is ominously dotted with graying 50-year-old relics who were judged a little too rambunctious in their day and were therefore kept as permanent associates, pour encourager les autres? When the alternative is finding yourself on the street, deprived of the monthly check and forced to develop a private practice or drown, most associates shudder, hurriedly clamp the lid on the abyss, and return to the warm glow of their respective firms. They are hooked. Predictable rationalizations ensue: their overworked existence is no longer thought of as exploitation, but rather as a prudent system of “forced savings,” a way of depositing in the bosom of the firm a comfortable income for their future years, a kind of upper-middle-class Social Security.
Left unspoken to themselves and their families is the recognition that, like Social Security, the system depends upon steady, even increasing, contributions by the associates who succeed them; that it is premised on an ever-expanding economy and law business which may or may not materialize. Thus their fears become the same as those of their elders who hold them down: what if, when I become a partner, the associates demand their share at once? At that point, cynics say, they are ready for a partnership.
With so much riding on a partnership, there is agony as the time approaches. There is no appointed hour, just a minimum number of years (it varies from firm to firm) below which no one will be considered. But once that time passes, an associate begins to get the message. A year or two later, it is obvious to all that he is in trouble. He can pack and go, or stick around and take his chances. The firm has very little incentive to kick him out: after all, he has eight or nine years’ experience, he is bringing them perhaps a hundred thousand dollars in billings, and his replacement would be an inexperienced fellow fresh from law school. “Maybe he will improve.” For those who remain, the suspense often becomes almost unbearable. One lawyer from a small firm vividly remembers the tension he has witnessed. “A fine young attorney at Baker & Botts got passed over when he should have made partner two years ago. His friends took him to lunch to console him, but he got sick. Next year the same thing happened, only this time he passed out in the street. Soon afterwards he moved to Dallas.”
Merit is the main criterion for promotion, and the continuing quality of the big firms’ work over the years indicates that their executive committees (whose list is almost never overruled by the full partnership) know what they are doing. Still, there is a measure of truth to the saying that “the only way you get to be a general is by not offending the generals.” Every firm has those senior associates who have paid for their independence.
An element of caprice also enters in. In some firms, an associate is assigned to work with a particular lawyer; his advancement is sometimes unjustly affected by how highly the other partners regard his supervisor. In other cases the partner decides how many billing hours he will credit to himself and how many to his associates, when they have worked on a project together. “How many billing hours I get to show depends on how good a guy he is,” says an associate. “And yet his decision rules my career.”
The high degree of specialization in the Big Three gives some associates a running head start on others.” At Fulbright Crooker, the patent section is the way to dusty death,” says a former associate there. Baker & Botts is dominated by the trial and corporate departments, whose strength is demonstrated at promotion and profit-sharing time. Says a disgruntled associate: “If they make a trial man a partner, they almost have to make a corporate man a partner. If you’re in, say, oil & gas, your partners may be fighting for you, but they just don’t have the same clout.”
Ironically, a partner’s life often turns out to be more of the same. The trappings change—they sell their homes in West University and Southgate to associates and move to Tanglewood or River Oaks—but they find themselves working harder than ever. Ingrained habits are hard to change. Some new partners tend to relax and coast, but most don’t; they identify themselves completely with their firms. Partnership brings its own set of competitions for rank and power.
Alcoholism and the divorce rate are both high among the middle-aged partners, evidence of discontent and frustration that will not go away. In the Big Three, a partner finds that unless he sits on the firm’s executive committee, he is still not likely to have much voice in its policies. “It would be very unusual for the partnership not to go along with the management,” says Leon Jaworski, “but it can happen.” For those so inclined, a struggle for influence within the firm replaces the struggle for promotion.
Why then do people do it? What do the big firms have to offer that make worthwhile the struggle to win a niche in a giant organization and the loss of personal independence it entails? Part of the reason is the excitement and exhilaration of the big firms’ type of law practice; there are those who are happier—professionally happier—in a big firm than they could ever be outside. For most, however, it is money, security, and social prestige. Money, because there are few Houston lawyers who make more than the top partners of the big firms, and those that do won their stripes in a very risky world where the losers outnumber the winners. Security, because a partnership carries with it a lifetime relief from fears of financial reversal. Social prestige, because those who have not previously moved in establishment society find the big firms an irresistibly easy path to acceptance and status.
These insights are not lost on the recruiters who leave the big firms each year and fan out to law school campuses in search of the ablest legal talent they can find. They know their winning cards.
Students on Pedestals: The Dazzle of Bigtime Law Recruiting
AS RECENTLY AS TEN YEARS ago, a law student who aspired to work for one of the Big Three went to their office, credentials in hand. All that has changed. Active recruiting now occupies a considerable portion of several partners’ time, year-in, year-out. With more law business than they have lawyers to handle it, the big firms find themselves engaged in a bruising, escalating competition for top law graduates. And like college football stars at the height of the old AFL-NFL rivalry, the graduates love it.
The University of Texas Law School in Austin is the principal battleground for capturing this legal talent. While the old Texas prejudice against Ivy Leaguers has largely faded (each of the Big Three sends a recruiting team to Harvard), the old Ivy League prejudice against Texas hasn’t, with the result that these sallies to New England are not notably successful. The big firms persist in showing an icy indifference to most graduates of other Texas law schools, including Baylor, the University of Houston, and to a lesser extent, SMU. But almost any second- or third-year law student in the top ten per cent of his class at U.T. can, if he wants, savor the opulent delights of big-time law recruiting.
There is a round of parties in the fall, timed to coincide with a football weekend, and another in the spring, to coincide with the Law Review Banquet. These are nothing if not lavish, and Vinson Elkins (which started it all) is universally regarded as the most lavish of all.
A third-year law student who was invited to one of VE’s early parties this fall was numbed by the experience. “There was this giant buffet at Green Pastures [a mansion-style restaurant in Austin],” he said. “It was huge—spread out through two or three rooms. And an incredible amount of liquor: I’ve never seen anything like it. An open bar beforehand, they kept filling your drinks while you ate, then Irish coffee. Amazing! Then they invited you up to their suite for after-dinner drinks! I never knew lawyers could drink that much.” A moment later he added pensively, “You know, I don’t think people today are as impressed by that sort of thing as they were a couple of years ago.”
Like the Russian army mobilizing for war, Vinson Elkins sometimes sends as many as 30 young associates, partners, and their wives to Austin for a recruiting weekend. Each is fully briefed in advance on the salient details of the four or five law students for whom they have assumed particular responsibility. At a “structured” party, each couple may be assigned a specific prospect to entertain and shepherd around, usually without the prospect’s prior knowledge. The atmosphere is reminiscent of fraternity rush—in some ways it is simply a continuation of fraternity rush—and in unguarded moments members of the big firms frequently slip back into the Greek terminology (rushee, rush party) until, grinning sheepishly at the outsider, they catch themselves.
The big impetus toward lavish recruitment came after the famous VE class of ’63 had settled into the firm; the other firms were virtually forced to follow. The emphasis at VE has always been upon bountiful, conspicuous extravagance: the finest foods, the finest wines, a life of stylish prosperity. One young lawyer who went to VE describes the process as “an attempt to sway impressionable law students, an appeal to their ego. ‘Here we are in Maxim’s wine cellar; this is the life of the young VE lawyer.'” A Vinson Elkins dinner for a half dozen students held at Austin’s prestigious Headliners Club in 1971 was, according to Club officials, the single most expensive meal ever served there.
Fulbright Crooker and Baker & Botts pursue the same pattern with varying degrees of success. The unreal atmosphere of a cocktail party, however, does not afford a congenial home court advantage to the aloof lawyers at B&B, and despite their punctilious observance of all the proper rules, they sometimes trip over their feet when stepping down from their pedestal. A 1973 Law Review graduate of U.T. argues that “VE gives the best parties because they hire the best cocktail party people. [The recruiting technique at] Baker Botts is just awful, clearly the worst—they send people up to Austin who don’t have any idea what to do at cocktail parties and that turns some guys off.” He adds, “Of course, that may mean they are better lawyers. I’ve never thought good cocktail party people and good lawyers were particularly compatible.”
Fulbright Crooker, as always, is honored more for their folksiness than their finesse. A typical FC recruiting weekend might feature a rock band at the Party Barn in Austin. A central Texas lawyer who was rushed by the big firms recalls that on his trip to Houston he and his wife went to see Lucia di Lammermoor with Beverly Sills at the Houston opera, courtesy of Vinson Elkins. “Fulbright Crooker,” he says half-seriously, “would have taken us to the Astrodome.” He neglected to mention that VE, keeping all its options open, has reserved a block of seats behind home plate.
Until quite recently, the most ferocious recruiting always took place within the Texas Law Review, a prestigious group of second- and third-year students who earned their positions strictly on the basis of their grade point average. But in late 1972 the Review began to admit members on an internship system that emphasized such things as a candidate’s legal writing ability; only 15 (instead of 40) positions are now determined solely on grades. At about the same time, the Law School administration forbade firms to restrict their campus interviews to an exclusive group like the “top 10 per cent” or “Law Review only.” They must now interview any student who asks to be interviewed.
The result of these reforms has been to make the grade-conscious Big Three increasingly suspicious of the students they interview on campus, with a correspondingly greater reliance on off-campus, informal party impressions. There are no more blanket Law Review invitations to parties, either; admission is now by individual invitation only. “It’s a lot more like rush than it used to be,” says one recent graduate. “If you are shy, introverted, don’t talk easily, you are likely to suffer. You just don’t have the chance to make the same impression. Good people have been hurt this way, especially with Vinson Elkins, who’ve been getting more and more toward the ‘good ole boy’ syndrome in the last year or so.”
One of the most reliable methods the firms have developed to measure the abilities of a prospective associate is the system of “summer clerkships.” Students whom the firm is interested in hiring are given a chance between their second and third years in law school to do legal research at the firm, to pick up a little cash at $250 a week, and to show their stuff. Ostensibly it’s just another summer job, but the firm and the clerks both regard it as a sort of trial run. In some ways it is deceptive (the clerks leave at 5 p.m. and don’t see the young associates still working at 10:30), but each learns enough about the other that solid “offers” are frequently made, and accepted, for employment to commence after graduation. Some students thus return to law school for their final year already employed, in effect, by one of the Big Three. At least two of the big firms, and possibly the third as well, quietly provide expense accounts for them to entertain and recruit selected fellow students who are still uncommitted.
A third-year student who is being pursued by one or more of the Big Three can expect to receive a first-class trip to Houston at the firm’s expense. One who recently returned from such a visit recalled that he and his wife were flown down and given a choice of staying in any hotel they desired. While he toured the office and met a succession of partners, his wife was taken on a tour of the city by several firm wives. During lunch at Neiman-Marcus the wives discussed the merits of housing and the Houston schools. Meanwhile he was having lunch at the Hyatt-Regency Windowbox with a few young associates. “There was no hard sell about it,” he said. “Their attitude was, ‘This is what we’ve got; be sure it’s what you want.'” In the afternoon he continued to make the rounds of partners, impressed that the top lawyers in the firm would stop what they were doing to visit with him. His wife was also taken to meet several of the principal partners. “When it was over I was told that if I wanted an offer, I could have one,” he said. “That was all there was to it, except we had dinner with some associates that evening. The rest of the weekend we were free to do as we wished; they made it clear we could stay as long as we wanted at their expense, but I had to get on back to school.” A “moderately generous” check for taxis, meals, and miscellaneous expenses arrived at his Austin home a few days later.
The recruiting battle is fueled by the traditional feeling at U.T. that anyone who doesn’t go to work for one of the big Houston firms probably isn’t much good. The firms scrupulously strive to preserve their status by impressive recruiting tactics and generous gifts to the Law School Foundation. (Each of the three has endowed a $100,000 professorship.) By and large the strategy works: an offer from one of the Big Three is regarded as proof of professional ability even by their most cynical Naderesque classmates; like the winner of a Rhodes Scholarship, the recipient can never again be regarded as just another face in the crowd.
The firms’ recruiting luck varies from year to year. Baker & Botts adroitly manages to spirit away a few of the highest-ranked students almost every time. Vinson Elkins dazzled the legal profession by snapping up great gobs of top graduates in the late 1960s, but their last vintage year was 1971. Fulbright Crooker outstripped the others in 1972, when they got four officers of the Law Review. A large proportion of the Class of 1973 opted for judicial clerkships, perhaps expressing a measure of distaste for the sort of work done by the Big Three. The current class talks even more radically than their predecessors, but at graduation they very likely will head for business-oriented firms.
If that doesn’t happen—if the Big Three are spurned by yet another crop of activist, reform-minded U.T. law graduates—the firms may well be forced to reappraise some of their policies. One which is long overdue for some reexamination is their attitude toward legal work pro bono publico, lawyers’ Latin for professional services provided free of charge to causes the lawyer deems worthy. Lawyers are traditionally even more tight-fisted than doctors when it comes to giving away their services for free, but this resistance has increasingly come under attack by young lawyers chagrined at the lack of legal representation available to poorly-financed consumer, environmental, and civil rights causes. In many of the larger New York and Washington firms, a substantial fraction of a lawyer’s time may be devoted to pro bono work for which the firm receives no income. The failure of Texas firms to follow suit has made them something of a joke among Ivy League law students at recruiting time.
None of the Houston firms has a pro bono program worthy of the name. There is a story, possibly apocryphal, of a much-sought-after Harvard law senior who was being recruited by Vinson Elkins. His hosts happened to take him to the office of one of the firm’s grand old men, a prominent insurance lawyer. Looking at the youngster, the senior partner said, “So you want to work for Vinson Elkins.”
The young man acknowledged that he thought that might be nice, and the two chatted amiably for a while about the many splendors of the firm. Finally the student asked, “By the way, do you do any pro bono work?”
An explanation ensued in which the student, somewhat taken aback, explained to the old gentleman the nature of that particular form of legal generosity. With an indulgent smile came the partner’s response: “Well, son, I’m sure it’s all right for you to do that, just as long as you do it on Saturdays.”
A recent U.T. graduate who is well acquainted with the pro bono policies of Washington law firms was discussing them with several of the top partners at VE during a recruiting interview. “I was talking about one D.C. firm—one of the two or three best—that has a written firm policy that 20 per cent of the firm’s time shall be spent on pro bono work. No ifs or buts—it’s a written policy, and it’s not just something nominal, it’s 20 per cent. The bigwigs at VE just flatly refused to believe it. What can you say?”
Vinson Elkins is by no means the worst offender in the matter of pro bono work, although their progressive reputation in the Sixties makes their lack of initiative more conspicuous. Baker & Botts seems to discipline associates who stray too far from the moneymaking path by denying them promotion to partner year after year, regardless of the merit of their outside work. At Fulbright Crooker, managing partner Jaworski was obviously discomforted by questions involving pro bono work. There, as at the other big firms, the crunch comes when an attorney is asked, say, by the environmental groups like the Sierra Club or the League of Conservation Voters to contribute his time in a class action suit on behalf of citizens seeking to stop industrial pollution or freeway construction.
“How,” Jaworski asks, “would a client who pays us a retainer react if he found that one of our boys was sitting on the other side helping to agitate a lawsuit against him? We can’t trample on our own clients’ interests by turning one of our boys loose to foment litigation.”
Most lawyers would acknowledge that he has a point. In one form or another, this is the persistent dilemma of the big firms: conflict of interest. A junior partner at Vinson Elkins candidly admits: “Most of our clients have environmental problems. We can’t represent both sides in an environmental lawsuit anymore than we can in any other kind of suit, even if we represent one side for free. If someone wants to handle environmental litigation, he shouldn’t come to a big firm.” He means, of course, handling environmental work for the plaintiff’s side, since the big firms defend such cases for their clients every day; they are happy to latch onto a young lawyer who knows environmental law, provided he wants to use his expertise in behalf of corporate defendants.
But lurking in the background is the realization that conflict of interest is not as final an answer as it seems. There are many environmental cases that even a lawyer in the Big Three could handle without placing himself in direct opposition to one of the firm’s clients. What the big firms know, however, is that if one of their lawyers succeeds in winning a tough environmental ruling today in a case that does not involve one of their clients, the law thus made may be used tomorrow as a precedent in a case that does. In this sense, “conflict of interest” is a convenient excuse for refraining from doing anything that would impair the interests of corporate defendants as a class, regardless of whether there is an ethical conflict in a particular case. Critics of the big firms would regard this as a telling example of the way they confuse their own responsibilities as lawyers with the very different interests of the clients they serve.
Still, the Houston firms sense that something new is in the wind, and one suspects that they are preparing for the necessity of allowing pro bono work when and if they have to. Their desire to keep getting the top graduates is ultimately stronger than their distaste for pro bono work; if their favored graduates consistently start going somewhere else in pursuit of the greater personal opportunities that such a program offers, the Big Three will doubtless devise one of their own to win them back—but not until. Meanwhile, Houston managing partners do have fewer illusions than lawyers in other Texas cities about the nature of pro bono work. The graduate who had such difficulty convincing the VE brass that Washington firms actually did require pro bono work recalls: ” At least the people in Houston know what the words mean—even if they are damned sure they aren’t going to do any of it. At one of the biggest Dallas firms they said, ‘You betcha we do pro bono work: one of our senior partners helps run the United Fund campaign every year.'”
Lawyers’ Wives: The Loneliness of a Closed Society
MOST WIVES FIND THAT THE firm dominates their lives as well as their husbands’. Emily Lowry (a pseudonym) is attractive, dark-haired, thirtyish. Her husband recently became a partner in one of the Big Three. Seated in the den of their comfortable two-story home in a fashionable neighborhood of Houston, she analyzes their climb.
“The first thing you have to understand about being a lawyer’s wife is that it’s very similar to being a doctor’s wife. The first few years are hard and lonely. He’s working long, long, hard hours—twelve to 15 hours is not unusual, for days at a time. You’ll raise your family almost single-handedly for a while.”
Whatever dreams a law student’s wife may have, they probably do not include an image of herself sitting around an empty house day after day as the sun sets, the dinner hour passing unmarked and preschool children wanting to be cared for and entertained, while her husband works on downtown. The young lawyer’s wife knows the firm’s night number by heart. To combat the inevitable loneliness, the wives seek out others in the same situation. “They’ll group together,” says Emily. “For instance, they’ll go over for a cocktail at 5:30 and pass the time with each other’s children until eight or so. But it gets a lot better after awhile.”
Social life tends to revolve around the firm—about 50 per cent of the time, Emily estimates. “These are the men your husband is working with, so it’s just easier that way.” For the first three or four years, young lawyers are expected to shoulder the recruiting burden. When they do this sort of entertaining, whether at home or somewhere else, the firm picks up the check. Emily recalls “one of the more exuberant” parties during her husband’s second year with the firm. “We went to the Petroleum Club; there were 30 of us, plus the rushee and his wife. So you see there’s an advantage to entertaining—it’s a very nice fringe benefit. The disadvantage for the wife, if she’s only on her own budget, is that you have to have very nice clothes in order to go places with your rushees.”
After the husband becomes a partner, he and his wife begin to entertain the firm’s clients instead of prospective associates. For the wife this is often an emotional trial, since she is the one who is expected to see that things go smoothly. The degree of entertaining depends on the type of work her husband does. If he is in real estate, securities, or some other kind of predominantly office practice, the burden may be light. But if he is in trial work, especially insurance trial work, entertaining is a permanent part of their lives. If the wife does not like it—or if she doesn’t like the people she is expected to entertain—”that can be a real problem,” says Emily. “You will be constantly socializing with insurance people, going to meetings with insurance people, traveling here and there. You just have to say, ‘I don’t like ’em, but this is my job,’ and go out and do it. And that isn’t very pleasant, especially if you’ve had a hard day with six screaming children.”
If the husband’s line of work requires him to know a wide circle of other lawyers, his wife becomes a useful agent to help him establish and develop contacts. She may be expected to join and participate in a variety of women’s clubs, civic projects, or charitable activities. If she balks, his advancement in the firm may be impaired.
When wives are so important to their husband’s and the firm’s success, it is not surprising that the firm scrutinizes them coldly but inconspicuously during the recruiting process. The associates’ wives are often asked for their opinion of a rushee’s spouse, although their judgment seems to carry weight in inverse proportion to the prospective young lawyer’s grade point average. “If you’re talking about a guy with super grades,” says Emily, “then he’d have to have a pretty bad wife to lose out.” But it does happen. “I remember a Harvard boy who had married an actress from New York, a former prostitute. If she’d been able to cover all this up—not the actress part, but the former prostitute part—then I guess it would have been all right. But she didn’t. She came to the firm and was quite loud, fairly obnoxious; and he was not offered a job because of her. They later got divorced.”
“A good wife is rather unobtrusive,” muses Emily. “She should be someone who can help entertain, to a degree. And yet there are some excellent lawyers whose wives you never see socially”—their husbands, presumably, had super grades. For the rest, feminine subordination to the husband’s career is a basic premise of their life together. In the firm’s eyes, the wife’s activities are his activities, and the same ground rules apply to both. A wife conspicuously active in radical politics, for example, would be an unmitigated disaster for her husband. Life in the big firms is still very much a family affair, and the firm’s threshold of embarrassment is low indeed.
An incident that occurred near the end of the interview forcefully (and unexpectedly) drove this point home. The telephone rang, and Emily’s precocious seven-year-old daughter answered it. “Mommy’s talking to the tape recorder,” she told the caller, who turned out to be Daddy. His curiosity metamorphosed into great ire when Mommy told him she had been discussing the life of lawyers’ wives. This writer took the phone to reassure him that the interview had begun with an understanding that neither Emily’s identity nor the firm’s would be disclosed. Unmollified, he insisted that the firm be supplied with a copy of the transcript and allowed to delete anything it did not want printed. He was told that this would be impossible, but that the writer would be happy to clear up any misconceptions about the terms of the interview on his visit to their offices the next day.
A somewhat-shaken Emily returned to the sofa and continued the discussion, but her animated manner was gone. About five minutes later the phone rang again. Daddy’s message was unambiguous, ex cathedra: I have told the managing partner what you are doing, and he has ordered you to stop the interview. “I guess you’ll have to destroy the tape,” said Emily as she sat back down, stunned.
A few minutes of pleasantries were exchanged to save embarrassment all around, but the interview was over. Emily grew visibly unnerved by the occurrence, changing the subject every couple of minutes to say, “I suppose I should have checked with them first, but I never thought. . .” And her voice trailed off. Explanations were offered—”It’s just a misunderstanding, we’ll straighten it out tomorrow”—but one had the distinct impression of being present at a moment when another person realized for the first time the true extent of her confinement. A man for whom she did not even work, sitting in an office building five miles away, could casually order her to stop talking to someone else about her life. He not only could, he had, without even bothering to ask first what she had been saying. It was a sobering experience, and it spoke volumes about the way the Big Three firms sweep lawyers, wives, and families into their all-encompassing embrace.
Hidden Mandarins: The Law Firms and Political Power
THE EXTRAORDINARY EDIFICE OF POWER erected by the Big Three is built on two secure cornerstones: politics and economics. Their political power is enormous, but it is not displayed in the manner that the general public has come to expect. Seldom does a partner manage a campaign, even locally. Almost never does one seek public office. Judges, too, come from someplace else. There is no tradition of public service in the big Houston firms, no noblesse oblige. Their sense of dignity clashes with the realities of politics as they perceive it: politics is not a gentleman’s game in this state; therefore gentleman lawyers do not sully themselves by becoming politicians. This distaste extends to other forms of public service as well. Dillon Anderson of Baker & Botts, who served as Special Assistant to Dwight Eisenhower, and John Crooker, Jr., of Fulbright Crooker, who took a leave of absence to assume the chairmanship of the Civil Aeronautics Board, are exceptions to a very rigid rule. Much more typical is John Heard at Vinson Elkins, who declined John Kennedy’s request to serve as Commissioner of Internal Revenue because his firm objected.
The big firms, of course, cannot please their critics either way. The very people who deplore their unwillingness to share the responsibilities of public service would be furious if they decided to do so, considering the possibilities for conflict-of-interest charges that could be levied against a legislator whose law firm represented the multitudinous clients of the Big Three. In any event the question of direct political participation is academic. As one lawyer remarks, “The big firms are conceived and bred like thoroughbred horses for one purpose: the practice of law. That is the end of their collective existence.”
The political power is instead derivative. It flows through the big firms—and from them—but is not generated by them. It belongs to the people who have the money: those who rule empires of insurance, lumber, shipping, petrochemicals, utilities, and banking, to name a few. It belongs, in other words, to their clients (except in the case of the banks, which are often run by the lawyers themselves).
The big Houston firms act as mediators between these men with money and the men who hold (or want to hold) public office. “If you thought something needed to be done in Houston,” muses a partner at Vinson Elkins, “the managing partners of the big firms would be the logical place to start.” The firms’ endorsement is a sort of imprimatur that gives credibility to a candidate, a proposal, or an idea; their power comes primarily from the fact that their judgment is trusted.
“Nothing big is going to happen in Houston unless Houston Lighting and Power, Humble Oil, et al. want it to happen,” a liberal-minded trial lawyer insists. “And they’re all represented by one of the Big Three. They go to their lawyer and have their lawyer tell the mayor.” Not all the firms, however, have equal political clout. Baker & Botts seems at times to take a perverse pride in losing politically-tinged battles like the recent contest for Cable TV franchise rights, as though a certain degree of ineptness in dealing with politicians was the hallmark of a truly professional lawyer. Fulbright Crooker (which clobbered Baker & Botts in that fight) has a record of backing winners in political races without much regard to whether they were Republicans or Democrats. A study of the “Houston Establishment” last year placed PC at the apex of its pyramid. Vinson Elkins has for many years been the most politically astute of all, if one measures astuteness by success in seeing one’s allies elected to public office; but their greatest impact has been on state, not local, politics.
To the outside observer, the role of the big Houston firms in state politics is a masterwork of subtlety. In essence it is a screening system that approves candidates and enables them to tap the great resources of establishment wealth.
“All the state officials go down and see them, hat in hand,” says a wealthy, aristocratic former state legislator. But why bother with the lawyers, he is asked: it’s the clients who have the big money. “Of course,” he says. “But that’s not the way it works. You have to go through the firm before you get to the client. You have to run the gauntlet first. In the old days you went to see Judge Elkins, or old man Crooker Now it’s one of the other partners, but the routine is just the same. If the firm approves, you’ve got access to the client. Unless you could get their blessing, you couldn’t get the money from the client. And the firms would charge their clients fees commensurate with the heat they’d taken off them.”
The last Texas governor who was not the candidate of the big firms (or substantially acceptable to them) was James Allred. He left office in 1939. The firms also take an abiding interest in the races for State Treasurer (held by Jesse James since 1941), Attorney General, the Railroad Commission, and of course, the Texas Supreme Court. Occasionally a candidate slips up on them, as did John Hill, a trial lawyer who made his reputation on the opposite side of the docket from the big firms and squeaked through to election as Attorney General in 1972. Hill’s strategy was simple: he announced his candidacy at the last minute, preventing the big firms from fielding a third candidate who would split the anti-Crawford Martin vote. Hill has continued to be independent of them.
By reputation the Big Three have a hefty say in the selection of judges, particularly local judges. Partners in the firms seldom deign to accept judgeships themselves, but there is no doubt they keep close watch on those who do. Younger lawyers outside the big firms claim to see the malevolent hand of self-interest at work: “Get a judge who doesn’t know the law,” says one aggressive young newcomer, “and he has to depend on the reputation of the attorneys in the case or of their firms.” The quality of trial judges in Harris County is considered uneven, to say the least, but the appellate bench is exceptionally able for a state court. In the opinion of some experienced attorneys outside the big firms, it is at least the equal of the state Supreme Court in character, integrity, and legal scholarship. There is no real evidence that the Big Three actively attempt to maneuver mediocre minds onto the bench, although they do frequently get the benefit of the doubt in mediocre judges’ decisions.
Members of the Big Three candidly admit that the firms hold a virtual veto over Harris County judicial appointments. (Although judicial positions are elective in Texas, most vacancies occur by death or resignation and are filled by gubernatorial appointment. The new judge then runs at the next election with whatever advantage an incumbent might have.) One prominent trial lawyer views judicial appointments as merely another example of the comfortable, symbiotic power relationships between big law firms and their prosperous clients. “Say you have a governor who got oil money the last time he ran. The law firm has a guy they want to see appointed judge. All they have to do is pick up the phone and call the Chairman of the Board of one of those companies, who just happens to be their client, whom they’ve just happened to keep out of trouble in the courts, and ask him to mention to the governor that so-and-so would make a fine judge down here. I’m not saying it’s dishonest. I’m saying they use the political tools available to them.”
Once on the bench, moreover, a Texas judge faces a lifetime of re-election campaigns if he wishes to remain there. While it is true that incumbent judges are hard to beat, very few are reckless enough to risk their positions by ignoring the political niceties. And the indispensable ingredients for apolitical campaign—publicity and finances—are conveniently available through the big firms and their corporate clients.
No one familiar with the practice of law in Houston seriously contends that the judges who win appointment or re-election in this fashion put on their robes and step into the courtroom determined to disregard the law in order to reward the lawyers and litigants whose influence helped them get there. But the idea that some lawyers and some clients exercise a disproportionate influence over the accession of judges has an insidious effect on the confidence other lawyers feel for their courts. Like so much else, it perpetuates an “us and them” attitude in the Houston bar.
Power Is Where the Money Is
THE ECONOMIC POWER OF THE firms is even more impressive than their political power. It can be traced to their special relationships with major Houston banks. National Democratic party chairman Robert Strauss, a Dallas lawyer, observes that while in most cities the big financial interests dominate the big law firms, in Houston the situation is reversed. And there is nothing at all derivative about that power.
On paper, the interpenetration is impressive: Jaworski is chairman of the executive committee of the Bank of the Southwest, and FC senior partner Hugh Buck also serves on the board. The firm also represents Houston-Citizens Bank, where two other partners, Newton Gresham and John Crooker, are on the board. Vinson Elkins is practically synonymous with First City National Bank, where senior partners John Connally and Marvin Collie serve on a board chaired by Judge Elkins’ non-lawyer son. Baker & Botts has its share of partners on various local boards, but it has no major “captive” bank of its own. Paradoxically, however, this situation has given them special influence over many medium-sized banks. As a giant firm with the largest corporate clientele of all, they automatically fall heir to much banking business, and the other banks tend to prefer doing business with them because they are not identified with Bank of the Southwest or First City National.
Economic power flows both ways, of course; the answer to the question of who controls whom is often murky. But the influence of lawyers from the Big Three is obviously substantial. The banks have channelled a disproportionate amount of their legal business to their allied law firms, in sharp contrast to the Dallas banking tradition of spreading the work around. Houston law practice is rife with tales of heavy-handed banking tactics. In effect the firms can use the banks to promote their own business. Lawyers from the small firms insist they often do.
Nor is the alliance of lawyers and banks limited to the downtown giants. Because the Texas constitution prohibits branch banking, there is nothing comparable to California’s vast Bank of America with statewide offices. Instead there is a plethora of small suburban “community” banks, each ostensibly an independent business enterprise. But the names of directors at the big banks appear with uncanny regularity as proposed directors for community banks seeking operating charters from the State Banking Board in Austin. An observer who has watched the Banking Board for years says, “When an application comes up, you can always tell which big bank is interested in it, just by looking at the names.” Through this system of interlocking directorates, the big banks have dominated the Texas banking scene far more than the casual observer might suspect.
This informal procedure came roaring out into the open after the Bank Holding Company Act was amended in 1970 to permit, in effect, the development of bank holding companies. More and more “downtown” Texas banks are acquiring direct control of community banks through this device, which enables them to dominate numerous smaller institutions without running afoul of the letter of the constitution. There are now twenty multibank holding companies in the state with 122 subsidiaries. They control almost 40 per cent of the total deposits. Two of the top four are First City Bancorporation of Texas and Southwest Bancshares. The lead bank in the former is Houston’s First City Nation; in the latter, Bank of the Southwest. Even as this new technique flourishes, however, the quest for bank charters continues.
A bank charter is a very valuable piece of paper. “It’s the next best thing to a Coors beer franchise,” one lawyer quips. Charters are adjudged to be so valuable, in fact, that they are granted not by a single individual, but by the three-man State Banking Board, one member of which is called the Banking Commissioner and is appointed by the State Finance Commission. The second member is appointed by the governor for a two-year term, and the third is the State Treasurer himself. A majority vote is sufficient to award a charter. And a majority of the Board is, of course, composed of one elected official and one direct appointee of an elected official, both of whom have been required to mount expensive statewide campaigns every two years.
The cooperation of the big law firms has traditionally been central to the success of gubernatorial candidates and Treasllrer Jesse James. A disillusioned former member of the Banking Board sums up the situation thusly: “Millions of dollars in state funds are lying around in banks at very low interest rates. James has the authority to put the state’s money pretty much where he pleases, and a lot of it winds up in Houston, at banks associated with law firms that have helped him stay in office. I’m not suggesting there’s been any wrongdoing, but I am suggesting that they [the big Houston firms] understand his problem, and he understands theirs.” A big transfusion of state money that can be invested at a profit is, of course, a very useful thing for a bank to have.
Lately the economic importance of the Big Three, especially Vinson Elkins, has been showing definite signs of going international, in a way that has very little to do with banks. The American oil industry, centered in Houston, is not without its influence in the Middle East. Most of the big companies already rely on their lawyers for advice that often transcends the merely technical. If the energy shortage worsens, American policy in that ticklish, oil-rich corner of the world may be affected even more by the judgments of oil men and their lawyers. Firms in New York have for decades influenced the development of American foreign policy, sending partners to counsel presidents and even to serve as Secretaries and Undersecretaries of State. Now it seems to be Houston’s turn.
There is another little-noticed basis for the big firms’ power. They are enduring institutions. A partner at Vinson Elkins reflected this when he remarked, “If you are going into Texas politics, you can assume that VE will be there throughout your career”—adding as an afterthought, “for good or ill, of course.”
In a young city like Houston, their age and apparent permanence stands out sharply from the surrounding landscape. In one very real sense they are more powerful than their clients. A lawyer in government service muses on the relationship between Baker & Botts and their pollution-troubled client, Champion Paper. “They’ve been around longer than Champion Paper and they’ll be here when Champion Paper is gone,” he says. “The judges on the bench are there because of Baker & Botts, not because of Champion Paper. Whatever happens B&B will still be here: it’s just like the government itself. They’re going to suffer when their clients suffer, but they’re going to bounce back.”
The examples could be multiplied endlessly, but the message is the same. The big firms abide while other things change.
What the Future Holds
WHERE ARE THE BIG FIRMS headed? Despite their apparent immutability, they are actually at the threshold of a potentially dangerous transition. Control is passing inexorably from an older generation of generalists who had diverse knowledge of the law, to younger specialists who have spent their professional lives in one narrow “section” of their huge firms. “There is a generation of lawyers coming up who cannot try a lawsuit or set up a small corporation,” says a worried freshman associate at a Big Three firm. The fear is that such men may make mistakes their seniors would never have committed because no one will be around to see the overall picture. Whatever may happen, it is clear that the trend toward specialization makes big firm lawyers even more dependent on their institutions, more than ever unable to leave if they are dissatisfied. A lawyer who does nothing but write pension plans is eventually trapped by his own expertise.
The big firms long ago reached a size where the day-to-day demands of managing their affairs became a full-time job for one or more partners. The relentless inroads of bureaucracy continue. Many lawyers who have left to set up practice on their own did so because they felt the management techniques placed an unacceptable barrier between them and their clients. “Time sheets, billing, all the mechanical details began to dominate,” said one emigrant who gave up a successful partnership at a Big Six firm. “I kept sending the stuff back, or ‘forgetting’ to do it, and they put up with my idiosyncracies because I brought in a hell of a lot of money every year. But that’s the only reason I got away with it. Maybe they have to be that formalistic, but there’s nothing in a time sheet that reflects the quality of the work you do. After a while you fall into the trap of working for your firm instead of your client.”
A great lawyer has to have a certain individualistic spirit; the giants of the profession are not technicians. But the big firms put no premium on that quality. Those of their senior partners who have it, began their careers when the firms were still small. If the big firms expect to see it 20 years from now, they will have to pursue it by conscious choice.
As yet, however, they show every indication of moving in the opposite direction. Exhibiting the abundant caution of men who have already got what they want and are determined to keep it, their instinct is to play things safe. The really exotic corporate finance creativity lately, for example, came out of Wynne, Jaffe & Tinsley, a Dallas firm that represented James Ling in his conglomerate sorcery. Could it happen in Houston? Probably not; the tendency is not to be terribly bold. An inventive young lawyer who left one of the Big Three recalls an incident that helped him make up his mind: “We had a client who did business on the Ship Channel. He was worried to death about a proposed new Treasury Regulation that would have required him to report under-the-table payments to captains of foreign vessels—something that was pretty standard in his business. They were kickbacks, really. He didn’t mind reporting them because they were deductible anyway. But the captains, who weren’t reporting them as income, didn’t want the government to have any record of them. Our client knew that his competitors would just ignore the Regulation, so that if it were adopted he would lose all his customers because the captains would just deal with his competitors and not with him.
“He was an honest man, and he was about to lose his shirt. So I went up to Washington and testified at a hearing in opposition to the Regulation. I must have been persuasive, because they didn’t adopt it. After I got back I told the head of my section what I’d done. I thought he’d be delighted. Instead he was alarmed, and he told me in a stony tone, ‘We do not testify on behalf of, or in opposition to, legislative matters, without the firm’s approval.’ What he meant was, ‘If you go around changing the law to help one of our clients, you may hurt another, bigger client.’ But if the firm had said, no, don’t testify, where would that have left my client and me?”
That eternal incubus of the big firms, conflict of interest, subtly depresses their lawyers’ creativity and sometimes stifles the free-swinging battling for the client’s interest that all lawyers like to believe is their stock in trade.
For all their far-reaching involvement in the political and economic life of Texas, however, the big Houston firms are strangely insular places. Their power paradoxically isolates them from the society they oversee. They inhabit a curious high-rise world, peopled by men of undoubted power whose influence they share and sometimes even create, but disquietingly detached from the human consequences of the decisions they. make. An individual who eventually will be affected by something they do may be strolling along Main Street 20 stories below, blithely unaware that his future is being determined in some small particular by a lawyer intent on “the most intriguing legal problem imaginable,” to whom he is a negligible abstraction. It happens all the time. The big firms take justifiable pride in their ability to resolve the most intractable legal problems and keep the engines of the Texas economy running smoothly for their clients. One looks in vain for a complementary sense of awe at the power they hold over other men’s lives.
“They are law machines, my friend,” said the trial lawyer who went on to praise them for being the finest concentration of legal talent in the country. He felt, quite rightly, that their ultimate justification lay in that fact. By their own professional lights, there is nothing wrong in siphoning off the best intellectual talent they can find and reshaping it into men whose first loyalty is to the wellbeing of the institution for which they work, rather than to the society of which they are citizens. If the firm’s interest ever conflicted with the good of society, they tell themselves, we would of course defend the latter; but such is their perception of society’s needs that that day never comes. And so the big Houston firms feel no sense of urgency to offer leadership in the reform of law, to improve the quality of the judiciary, or to elevate the tone of public life.
The source of the malaise is politics, and their inability to reach a reconciliation with it which they can regard as suitably professional. These thoughts were on the mind of a lawyer at one of the Big Three.
“What is a lawyer?” he asked. “Is he a professional man, an officer of the court? Or is he a tradesman who has mastered a lucrative craft? What the hell is a lawyer? Traditionally a professional man was respected because he was not just ‘in it for the money’; he was a leader in the community and he took time away from his moneymaking to do it.
“Now, to a rather blatant degree, lawyers have become the tools of the propertied class. Instead of lawyers being the best read and wisest people in the community, they’ve become technocrats. Since you don’t want to alienate your clients, you begin to think like them and act like them.
“Politics makes very cautious people out of us. When I think of the leadership that is lost to the community when lawyers are inhibited by these things, I become very discouraged indeed. We have a lot more to offer than we give, and we are the ones who are tying ourselves down.”
The clients of the big Houston firms gain excellence, of course; but the loss to the rest of us is considerable.