Jenkens & Gilchrist, P.C.
Jenkens & Gilchrist, P.C.
Sales: $272.0 million (2003 est.)
NAIC: 541110 Offices of Lawyers
With its home office in Dallas, Jenkens & Gilchrist, P.C. is one of the largest law firms in the United States, with more than 500 attorneys on staff. Additional offices are located in Austin, Chicago, Houston, Los Angeles, New York, Pasadena, San Antonio, and Washington, D.C. Jenkens is a full-service law firm, involved in more than 20 practice groups. Its intellectual property group is especially well regarded, as is the firm's work as a legal adviser in banking industry mergers. Jenkens' reputation is not without blemish, however. The firm has come under fire by the Federal Deposit Insurance Corporation (FDIC) for its involvement in the savings and loan scandal of the 1980s, and more recently the Internal Revenue Service has lodged a suit to force Jenkens to reveal the names of clients it advised on questionable tax shelter schemes.
Firm Grew Out of 1940s Legal Work for Texas Millionaire
Jenkens grew out of the legal needs of wealthy Texas oilman Clint Murchison, Sr. He was born in Tyler, Texas, the son of a banker. Despite having a prep school education, he defied his parents and refused to attend Trinity University. Instead, he went to work for his father's bank and began to dabble in cattle trading and other private ventures. After serving in the Army during World War I, he returned to Texas and along with a childhood friend, Sid W. Richardson, became involved in the new oil fields in the areas around Wichita Falls, Texas. He soon made a fortune in oil (and would later be credited with being a driving force behind the emergence of the natural gas industry). He then invested in a number of industries, becoming one of the first conglomerate makers. After serving in the military in World War II, his sons—Clint Murchison, Jr. (who would become best known as the first owner of the Dallas Cowboys professional football team) and John D. Murchison—became involved in the family's accumulation of a wide assortment of financial interests. These included the Holt Publishing Company, Easy Washing Machine Company, Virginia and Mississippi insurance companies, a Colorado amusement park, a California race track, bus lines, taxicab companies in both Dallas and Kansas City, a canning company, and worldwide construction contracts. In 1946 Murchison hired former Assistant Attorney General Holman Jenkens to become his personal lawyer, but his legal needs were so great that he had to hire a staff of lawyers and turn to outside law firms for help. One of those staff lawyers was William H. Bowen, who came to Dallas from Chicago and was strong in the area of financing.
The Murchisons decided to sponsor Jenkens and Bowen in setting up an independent law firm, which was formally organized on September 15, 1951. Although its primary purpose would be to service the family's business needs, Jenkens & Bowen would also be able to take on "Non-Murchison Clients," as they were called. Joining the two principals of the firm were associates George C. Anson and Walter M. Spradley. This small group of attorneys set up shop at 1021 Main Street, a two-story remodeled bank building that housed the headquarters for the Murchison family business interests. Not only did Jenkens & Bowen have close business ties to the Murchisons, to reach the firm's offices on the second floor of the building visitors had to pass through the Murchison reception area.
Henry Gilchrist Joins Firm in 1952
Because of Murchison's diversified interests, Jenkens & Bowen was transaction-oriented from the outset, involved in all manner of business matters. With a secure base of work, the firm enjoyed steady growth and expanded its staff. In 1952 Henry Gilchrist joined the firm. After earning a degree in civil engineering from Texas A&M he graduated from the University of Texas School of Law with honors in 1950. Involved in mergers and acquisitions and securities, he would become a strength of the firm for the next 50 years, and Jenkens would ultimately make him a name partner. In 1953 Wilson A. Hanna joined the firm, followed by Joe Gray in 1955.
Although the firm was located in the relatively small city of Dallas, which had a population of just 432,000 in 1951, its work extended well beyond the city limits during the 1950s. Jenkens was involved in a proxy fight for control of the New York Central Railroad; the purchase of a St. Louis subway car manufacturer; the formation of the Kirby Corporation, a Houston oil and gas company; the acquisition and operation of out-of-town banks; the creation of national chemical and steel companies; the establishment of the first publicly owned insurance holding company; the construction of a Denver office building; and even the financing of a John Wayne film, The Alamo.
There was so much work, in fact, that the firm had to decline some opportunities because it did not have enough attorneys. Thus, in the 1960s the firm began to expand its staff as well as its capabilities. Not only was Jenkens able to take on more business, it also became less dependent on the Murchisons—a wise move, given that the family would fall victim to falling oil prices in the 1980s and suffer a monumental collapse. Moreover, Dallas evolved into a major city and its economy grew and diversified, leading to even greater growth for Jenkens in the 1970s.
As the Texas economy expanded, Jenkens also broadened its operations, opening an office in Houston in 1983 during that city's boom period, followed by an office in the state capital of Austin. By 1986 Jenkens had 157 lawyers in its three offices and was ranked as the 113th largest law firm in the country. It took a major step in achieving further growth that year when it merged with another Dallas firm, Hutchison Price Boyle & Brooks, adding 28 lawyers. The merger filled out Jenkens' public law and municipal finance capabilities, while Hutchison added tax and banking expertise. Now with 185 attorneys in the fold, the combined firm became the second largest Dallas law firm, trailing only Akin, Gump, Strauss, Hauer & Fled, which had 271 lawyers. Jenkens' Christie Flanagan became managing partner and chief operating officer, and Hutchison's name partner, Ray Hutchison, became chief executive officer and chairman of the executive committee of the newly constituted Jenkens & Gilchrist.
Jenkens was drawn into the savings and loan scandal in June 1987 when the Federal Savings and Loan Insurance Company sued the firm for $100 million, charging the firm with malpractice in its work connected with two failed thrifts: Brownfield Savings and Loan Association and State Savings and Loan Association. Jenkens would agree to an $18 million settlement in 1989, which released 44 partners from liability, but the matter would linger. After three years of discovery and the accumulation of a million pages of documents, federal regulators filed a new complaint in 1990, targeting four former partners in the firm, suing them each for $100 million. One would go to jail. These additional charges brought unwelcome publicity to the firm, especially because it was also involved in a securities lawsuit concerning a Texas oil company, which made a private stock offering in 1981 with Jenkens' help. In March 1990 a Dallas federal jury returned a $5.8 million verdict against Jenkens on this matter.
In 1989 David Laney became president and chairman of Jenkens. At the time, the firm had been reduced to 160 attorneys, involved in ten practice groups. Under Laney's leadership, Jenkens entered the 1990s very much growth oriented. Despite difficult economic conditions, he was also interested in expanding the firm nationally and actively scouted for merger candidates. In 1991 Jenkens grew its Texas operations. The Austin office merged with Shapiro, Edens & Cook, adding specialists in tax and corporate securities. All told, the Austin office expanded from 13 attorneys to 41. The Houston office, however, suffered a rapid decline. The firm was interested in merging the office with another Houston firm and in preparation restructured, reducing the number of attorneys from 34 to 25. This move led to several attorneys leaving to take jobs elsewhere, including the managing partner. By November 1991, the Houston office was reduced to just seven attorneys.
Jenkens did not begin to achieve the kind of growth Laney envisioned until the mid-1990s, as the U.S. economy began to pick up and Dallas emerged as one of the hottest legal markets in the country. The firm added offices in San Antonio, Washington, D.C., and Los Angeles. It hired new lawyers at a rapid clip, 180 of them from 1996 to 1998. In 1998 Jenkens hired 101 attorneys firmwide. Jenkens also added practices, such as construction law, a practice that had long been the province of boutique law firms but that Jenkens now used as a magnet to attract other business at all of its five offices. Altogether, Jenkens was now involved in 13 separate practice groups, and by the end of 1998 was ranked number 51 in the National Law Journal 's list of the largest law firms in the United States. In terms of the number of attorneys employed, Jenkens was now the largest law firm in Dallas. In terms of revenue, it only trailed Akin, Gump in the city.
At Jenkens & Gilchrist you'll find attorneys nationwide with industry-leading expertise in more than 20 areas of law. But we understand that our greatest insight comes when we work with you to define specific solutions that meet your circumstances and goals.
Chicago Office Opens in 1999
In January 1999 Jenkens opened its seventh office, in Chicago, by cherry-picking five attorneys previously employed by area firm Altheimer & Gray. Over the next 18 months the Chicago office added more top Chicago attorneys, including almost 20 from Arnold, White, and Durkee, five from Houston-based Bracewell Patterson, five from Dallas-based Gardere & Wynne, and in June 2000 nine attorneys from the recently disbanded Hedlund Hanley & John. Jenkens made an even bigger move in 2000 when it entered the New York market by acquiring the firm of Parker Chapin, culminating a two-year search for a New York partner. Parker Chapin was founded in 1934 and added about 150 attorneys, bringing Jenkens' total to 600 attorneys firmwide. In addition to gaining a presence in the key New York market, Jenkens strengthened its corporate, intellectual property, and technology practices. The firm expanded so much that in 2000 it outgrew its Dallas offices, and the national management team moved to another building to open up another floor for lawyers.
After more than a decade as chairman, and instrumental in growing Jenkens from a firm with three offices and 160 attorneys to one with eight offices and more than 600 attorneys, Laney in January 2001 turned over his post to William Durbin, who had been with the firm since 1983. Laney stayed on as a Jenkens' partner, but two years later, in February 2003, elected to leave the firm after 26 years, assuming a non-managerial role at another Dallas law firm, Jackson Walker LLP. With Durbin in charge as CEO and chairman, Jenkens opened a new office in Pasadena and established a biotech consulting subsidiary, Connexon Life Sciences Consulting Inc., operating out of Washington, D.C. But Durbin also had to face some difficult times caused by a recession in the early years of the new century. After pursing a decade-long growth strategy, the firm in 2002 decided to step back and shrink its size in the belief that further expansion would simply dilute strength.
In 2003 Jenkens experienced a large number of defections, as more than 50 of its high-profile attorneys, including former chairman Laney, switched law firms. One contributing factor to this high turnover was the adverse publicity Jenkens was receiving from an IRS investigation on the part the Chicago office played in abusive tax shelters. (Laney, for one, denied that the IRS matter played any role in his decision to leave the firm.) Jenkins and Chicago law firm Brown & Wood (subsequently renamed Sidley Austin Brown & Wood) were accused of helping to develop highly technical tax shelters which they then "blessed" by issuing opinion letters that stated the shelters were "more likely than not" to be legal investments under the federal tax code. Such opinion letters were intended to aid taxpayers should they be challenged by the IRS, although there was no guarantee they would avoid penalties. The IRS demanded to know the names of Jenkens' clients who sought advice on tax shelters in order to conduct individual audits, but Jenkens and Sidley refused, citing client-attorney privilege. Jenkens also faced civil suits from clients alleging bad tax-shelter advice. The firm settled this matter by agreeing to pay $75 million. In 2004 Jenkens continued to fight the IRS over its demand that the firm turn over client names, but the firm's position was undercut when Sidley turned over the names of about 400 clients (although it maintained that it withheld the names of clients who asked not to be identified). The matter not only affected Jenkens, it held long-term implications about how individuals sought advice and how lawyers gave it.
In January 2004, Durbin stepped down as chairman and CEO and returned to the firm as a full-time fee-earner. He was replaced by Thomas H. Cantrill, who had served as the firm's chairman for a period some 15 years earlier.
- Holman Jenkens becomes personal attorney to Clint Murchison, Sr.
- Independent law firm of Jenkins & Bowens is formed to handle legal work for Murchison family and outside clients.
- Henry Gilchrist joins firm.
- Houston office opens.
- Firm merges with Hutchison Price Boyle & Brooks.
- David Laney is named president and chairman.
- Merger with New York firm Parker Chapin is completed.
Akin Gump Strauss Hauer & Feld LLP; Fulbright & Jaworski L.L.P.; Vinson & Elkins L.L.P.
Bryan-Low, Cassell, "Moving the Market: Jenkens & Gilchrist Agrees to Pay $75 Million in Tax-Shelter Case," Wall Street Journal, March 8, 2004, p. C3.
Hansard, Donna Steph, "2 Dallas Law Firms to Merge," Dallas Morning News, February 6, 1986, p. 1D.
Harland, Christi, "Jenkens Agrees to Settle Case of Malpractice," Wall Street Journal, August 11, 1989, p. 1.
Harland, Christi, and Paul M. Barrett, "Lawyers Are Sued in Dallas S&L Failure," Wall Street Journal, March 21, 1990, p. B8.
Maxon, Terry, "Chief Defends Dallas-Based Law Firm Jenkens & Gilchrist After Controversies," Dallas Morning News, July 25, 2003, p. 1.
"Texas Is New Wild West for Law Firms," Salt Lake Tribune, November 26, 1998, p. D2.
Whitley, Lisa M., "Jenkens & Gilchrist Has 'Never Been Strong,' " Dallas Business Journal, January 22, 1999, p. 6.