A leading law firm marks 100 years in business
Vinson & Elkins has been a major force in changing Texas’ legal environment as well as helping the state prosper
WILLIAM Vinson and James Elkins sat next to each other at a July 9, 1917, memorial service in the Harris County Courthouse for Vinson’s law partner, who had died at age 42.
After the memorial service, Vinson invited Elkins to his office in the Union National Bank Building. Though he had “nothing in mind except to be courteous,” Vinson suddenly realized, “Here is your man.”
From that realization came a law firm that has lasted a century. Vinson & Elkins, marking its centennial this month, has grown along with Texas and Houston, widely recognized as the most influential firm in the oil patch and one of the most powerful in the state. Its alumni include the late Texas Gov. John Connally, former Senate Majority Leader Howard Baker, former U.S. Attorney General Alberto Gonzales and former U.S. Trade Ambassador Ron Kirk.
With about 700 lawyers in 16 offices across the globe, V&E raked in $653 million in revenue last year.
“When you look at how Texas has grown over the years, not only with the energy industry, but other industries attracted to the state, having a quality law firm like (V&E) really played a key role in the enhancement of Texas,” said Mark Berg, executive vice
president of Pioneer Natural Resources, a Houston oil and gas company.
Legal analysts agree that V&E has been a major force in changing the legal environment in Texas. The firm championed improved legal services for the poor, sought diversified Texas jury pools, demanded humane prison conditions and supported affirmative action in the state’s public universities. V&E was one of the first Houston businesses to offer same-sex employee benefits.
“The firm has repeatedly rose to the challenges because of the extraordinarily talented lawyers and leaders we have,” said V&E’s chairman, Mark Kelly. “Law firms are extremely fragile institutions because its prime assets — the lawyers — walk out the door at the end of every day, and there’s no guarantee that they will be back.”
After making a handshake deal, Vinson and Elkins opened an office on the second floor of the original Gulf Building in downtown Houston. It proved a good time to grow a law firm in Houston.
The discovery of oil at Spindletop was ushering in new industries. The completion of the Houston Ship Channel in 1914 opened the city to the Gulf of Mexico and the world.
V&E’s first large oil and gas client was wildcatter Colonel A.E. Humphreys, who hired Elkins to sue Texas Co. (later Texaco) for $1 million in unpaid oil purchases. When Elkins resolved the issue in 40 minutes, Humphreys signed V&E as outside counsel.
Another pivotal moment came in 1930, with the hiring of David Searls. Under Searls’ leadership in the early 1960s, V&E began aggressively recruiting young legal talent, especially among top graduates at the University of Texas School of Law.
Harry Reasoner, a recruit from UT Law’s class of 1963, became Searls’ protégé. A renowned trial lawyer, Reasoner successfully defended on appeal a $12.5 billion judgment for Pennzoil against Texaco that Houston torts king Joe Jamail had won at trial. Two years later, Reasoner won a record-setting $1 billion antitrust award for ETSI Pipeline against Santa Fe Southern Pacific Corp. Reasoner also defended pro bono the UT law school’s use of affirmative action in Hopwood v. Texas.
Reasoner, who served as V&E’s managing part- ner in the 1990s, guided the firm through its worst existential crisis. Enron Corp. had become the firm’s largest client, paying V&E more than $20 million a year in legal fees. When Enron’s fraudulent accounting practices were revealed, V&E went under the microscope.
The U.S. Securities and Exchange Commission, the U.S. Department of Justice and the federal bankruptcy trustee in the
Enron liquidation investigated V&E. Enron shareholders sued V&E as part of a class action lawsuit seeking hundreds of millions of dollars in damages from the law firm.
“Not one found that we had violated any laws or done anything wrong,” Reasoner said.
Kelly said the firm is stronger today than ever. Still, there are challenges. In the past six years, major national law firms have
opened offices in Houston and Dallas, hiring away more than three dozen V&E partners. V&E responded by hiring 20 lawyers, deepening its bench in intellectual property and opening an office in Richmond, Va.
“We want to be viewed as an elite firm, not regional,” Kelly said.
For a longer version of this article, please visit TexasLawbook.net.