Home office? What’s that?
Law firms often take the Fifth on where they’re based
What’s the one question law firms don’t want to hear? “In which city are you headquartered?”
Law firms twist themselves into knots to avoid tying themselves down to a single home office in this global world. Gone are the days when law firms identified with one city or even one state. Today, they want to be everywhere at once, creating the appearance that no one office is more important than another.
“It gives the impression of global reach, knowledge and prestige,” said Steve Werner, professor of management at the C.T. Bauer College of Business at the University of Houston.
Even firms with strong local roots are reluctant to lay claim to the city that made them famous. For example, no law firm is more quintessentially tied to Houston’s trajectory from tiny backwater to the nation’s fourth largest city than Baker Botts. The firm was established in Houston in 1840, five years before Texas became a state. It represented some of the city’s founding leaders. Later, it represented the scores of oil companies that sprung up after the Lucas gusher erupted at the Spindletop oil field in 1901, helping to make Houston the nation’s energy capital.
But today? Baker Botts does not have a main headquarters office, the firm’s public relations department responded when first asked. Then, asked when Houston stopped being the firm’s headquarters, the law firm emailed a clarification: The Houston office acts like its headquarters.
A few minutes later, the firm came back with an update: Baker Botts is based in Houston.
The reluctance of staking claim to one office as home base began when firms began
“Law firms are built as partnerships, organizational structures that imply collegiality, not hierarchy.”
to open satellite locations. Lawyers based in, say, Los Angeles didn’t want to advertise their California ties to clients who have business needs in New York or London, according to legal industry analysts.
Bill Cobb, who consults with law firms on strategic issues from his local office, said that by not specifying a single headquarters, firms can more freely market themselves to clients. Once firms grow to 500 lawyers with multiple offices, they rarely claim a headquarters, he said.
And with several out-ofstate firms opening offices in Houston to expand practices in energy, health care and financial services, it’s often difficult to tell where they’re coming from.
Reed Smith opened its Houston office four years ago and now has 63 lawyers. The firm, which got its start in Pittsburgh in the 1870s, counted the Mellon and Carnegie families as among its first clients. But the firm says it doesn’t have an official headquarters. The office in Houston, like Pittsburgh, is just one of 26 for the firm with 1,800 lawyers.
There is no central power center at Reed Smith, said Kenneth Broughton, managing partner of the firm’s Houston office. To illustrate, Broughton noted that the firm’s largest office is London with 380 lawyers, but its managing partner works out of a small office in Tysons Corner, Va., across the road from a shopping mall.
“I’ve never reported to Pittsburgh,” he said.
Even Vinson & Elkins, founded 100 years ago in Houston, also has gone the global marketing route, downplaying its deep local roots. The firm was cofounded by Judge James A. Elkins Sr., part of a group of powerful business leaders who in the 1930s began to plot Houston’s future from a suite in the Lamar Hotel, later helping to bring Johnson Space Center to town and get the Astrodome built.
Today, Vinson & Elkins markets itself as a international law firm with 700 lawyers in 16 offices and prefers to be described that way. But it doesn’t take offense if anyone refers to it as based in Houston, the location of its largest office, director of communications Darrin Schlegel said.
Clients have mixed views on the trend. Blaine Edwards, assistant general counsel for Houston oil field services company Superior Energy Services, said firms are walking away from local roots that made them great in the first place and that make them appealing today.
“In my mind, it’s a little bit sad,” said Edwards, who hires outside firms to handle contract disputes, personal injury claims and employment disputes. “If I’m going into Singapore or India or South America or even Europe, what I want to do is find the local firms based there a long time and know everything about the local laws, customs and courts.”
On the other hand, Sharon Birkman, CEO of Houston-based Birkman International, which develops personality and career assessment tools, said she focuses on a firm’s expertise, reputation and costs, rather than geography.
“It doesn’t matter to me whether they have an office in Paris or Dubai,” she said.
But it’s often more than marketing when it comes to law firms without headquarters, legal consultants say. It’s also a way to keep the peace.
Law firms are built as partnerships, organizational structures that imply collegiality, not hierarchy. Without a primary office, firms can appear to function more like networks rather than top-down operations, which in turn can help attract and retain legal talent in different locations. Otherwise, lawyers eager to make partner or move into senior leadership roles worry they won’t get noticed if they are working in satellite offices.
That weighed on Houston energy lawyer Tracie Renfroe 11 years ago when she was pondering whether to leave her job at Bracewell, a law firm with deep Houston roots, for King & Spalding, then a relative newcomer to Houston. King & Spalding, which established its local office in 1995, is closely tied to Atlanta, opening there in 1885. Four hundred out of the firm’s 1,000 lawyers work out of Atlanta, its largest office. The firm’s chairman has his office in Atlanta.
Renfroe was worried the Atlanta office would drive decisions and resources. But the firm is structured so senior members of the leadership team are spread among the firm’s 19 offices. That includes Renfroe, who leads the firm’s energy practice and serves as managing partner of King & Spalding’s Houston office, which has 87 lawyers.
With improvements in technology that let lawyers work anywhere for any client, the question of headquarters is almost irrelevant, Renfroe said. “There is not really a center of gravity.”