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Saturday, June 02, 2007

"Oh, really? I had no idea he's a 'name partner' in a Houston-based law firm. 'Who & Giuliani,' didja say?"

I've read lots and lots in the last few months about Rudy Giuliani, and from what I know of him, I definitely like the man. Considering him as a presidential candidate, I don't agree with him on every issue, but I've never seen a candidate with whom I agreed on every issue. I'm flirting with Fred; but if Rudy ends up being the Republican nominee, I won't have any hesitation giving him not only my vote, but my enthusiastic support.

GOP presidential candidate Rudy GiulianiGiuliani's a lawyer, so in sizing him up, I'm particularly interested in his legal career. And he's gotten lots and lots of attention, appropriately, as the former United States Attorney for the Southern District of New York.

But I would wager that if you asked 100 registered, rock-ribbed, but non-lawyer Republicans around the U.S. what Rudy's been doing with his law license, if anything, since the end of his tenure as the Mayor of New York City, not more than one or two of them (if that many) could tell you that he's now a name partner in a major Houston-based law firm with "approximately 400 lawyers practicing in nine offices worldwide":

Bracewell & Giuliani LLP. Ya know 'em?

I do. But unless you're from Houston, or you're a Texas lawyer, or you're an out-of-state lawyer who's just happened to bump into them on a case or a deal with a Texas connection, you probably don't.


I've known of the firm since I was a student at Texas Law School in the late 1970s because Bracewell & Patterson — as they were known until 2005 — was indeed one of the major Houston-based law firms back then, and it still is now. In terms of size, prestige, revenues, client list, and most of the other objective criteria that distinguish law firms from one another, it was then — and still is now — squarely situated in the second tier of first-rate big, full-service firms. Objectively, it's still a notch behind the traditional "Big Three" of Houston (Baker Botts, Vinson & Elkins, and Fulbright & Jaworski). But that's still very fine company to be in, and hanging in there with that crowd for several decades, despite market pressures that have toppled more than a few roughly comparable firms, is itself no small feat. And if you were to assume that Bracewell (as it was then generally called, and still is now) wasn't competitive on a day-to-day basis with the Big Three — fighting for the same clients and matters, handling the same kinds of deals and lawsuits, recruiting the same caliber of law students — you'd be badly mistaken. Bracewell was then, and still is, a damned good law firm.

But Bracewell wasn't, and isn't, a nationally famous one — not even now that its new second-named partner is one of the most famous lawyers in the United States.

As I recollect — and I haven't gone back to research it, I'm just going from memory — Bracewell was actually one of the "early adapters" in trying to open (or, as more often happens, acquire by merger) a New York office sometime in the mid-1980s. The big Houston and Dallas firms had long had at least small outposts — for lobbying and regulatory agency work, mostly — in Austin and Washington. But in the 1980s and 1990s, they became vicious competitors of one another, and of out-of-state firms, in trying to grab dominant positions throughout Texas. Those intra-state skirmishes continue to this day, with the firms originally based in Houston, in general, having done a somewhat better job expanding into Dallas (and the smaller Texas cities like San Antonio and Austin) than vice versa. In focusing on New York so early, though, Bracewell was definitely bucking the trend among its major Texas competitors — but with what success, I honestly don't know.

New York is a tough nut to crack — the most obvious out-of-state place where your big home-state clients are likely to need you (in addition, perhaps, to Washington), but definitely the toughest place to break into in a big way. It's the easiest place to drop a whole load of money on overhead. The band of lateral partners you lure away today from an existing NYC firm may turn out tomorrow not to have had such a tight grip on that book of business as they and you thought. And the competition among the firms that have been knife-fighting each other (metaphorically ... well, mostly) in Manhattan for the last 100+ years is just brutal.

From 1989-1991, I was a partner in the Houston branch office of a New York-based mega-firm — Weil, Gotshal & Manges. And without intending any insult whatsoever to any of the fine firms from not just Texas, but all other American cities, who'd tried to compete with the NYC big boys on their home turf, I think I can say with confidence that my New York partners back then hadn't lost any sleep worrying about losing their New York-based business to firms from Houston, Chicago, or LA — no more than the Yankees or the Mets spend time worrying about competition from, well, Class A farm teams. (That's mean to say, and that's not at all a fair analogy in terms of the quality of lawyers or legal work you find outside Manhattan. But that is how most of the New York big-firm lawyers I've known actually feel.)

Likewise, while I'm sure some non-NYC-based firms have made some decent profits from time to time from their New York branch offices, I'm not aware of any of them who've just hit a monster home run there, even today. Many are the out-of-town firms, both from Texas and elsewhere, who've opened NYC offices with champagne and press releases, then quietly had to sublease their office space (at a loss) a year or two later as they slunk home licking their wounds. According to the famous song, If you can make it there, you'll make it an-y-where. But the simple fact is: A great many out-of-town law firms who've "made it big" not only in their own home towns but also in some other tough markets, nevertheless haven't "made it big,"  or even made it at all, in New York, New York.


The Houston Chronicle's in-house law blogger, Mary Flood, writes today about Bracewell & Patterson's Giuliani's reaction to the most detailed piece I've seen in the legal press about the courtship between Giuliani and the firm, and their relationship since he joined  it (link in original):

This American Lawyer cover story has long been awaited and maybe even feared by the folks at Bracewell & Giuliani. They've known it was coming for months. The post-publication reaction at the firm seems to generally be positive. Managing partner Pat Oxford sent out an e-mail saying the story was basically OK with him.

It's a long, easy-to-read and nicely detailed report on how Houston's Bracewell & Patterson courted and joined forces with now-presidential candidate Rudy Giuliani.

And Ms. Flood is right. Susan Beck's article for the American Lawyer is indeed a good piece of reporting, with enough "inside baseball" to be interesting to those of us in the profession, and it contains the obligatory references to Karl Rove and presidential fund-raising from Texans that will set keep the dKossacks slavering and howling. The article is easily understandable by, and of ample interest to, non-lawyers for the most part. If you want to become thoroughly knowledgeable about Rudy Giuliani's career history, and especially his history as a lawyer, then you ought to include this article in your "required reading" list.

But really, there's nothing too surprising. You want it in two sentences? Bracewell wanted to "enhance[ its] 'overall patina.'" Rudy, in turn, wanted to find a good law firm whose people he liked well enough, and who were willing to accept a wee bit of his actual legal work, plus access to his name, reputation, and contacts, in exchange for some seven-figure folding money (along with a few jobs for his entourage).

It's just market capitalism — a set of arms-length, legal, not too obvious but not needing to be hidden transactions between willing buyers and sellers. Both Giuliani and the Bracewell lawyers will readily plead guilty to the charge of being motivated, capitalistic profit-maximizers. That "patina" quote from Bracewell's managing partner particularly tickles me, because I associate that word with patent leather shoes, which in turn I associate with the evocative, but odd and dated phrase, "white-shoe law firm." And if, as the article speculates, Rudy's been pulling down somewhere between $1-$3M per year from the deal, well, that is indeed a lot of money; but it's actually on the low end of "senior partner who's a major rainmaker" money for the best big firms in either Houston or New York.

Frankly, the clients and business Giuliani has brought to Bracewell, the fees it's charged them, and the partnership distributions Bracewell has made to him have undoubtedly all been transactions which everyone involved has known were certain to come under multiple microscopes — wielded by the mainstream press, political opponents in both parties, and both hemispheres of the blogosphere — at least by late 2007 and early 2008. Bracewell — whose managing partner aptly refers to the past and likely future inquiries as "cavity searches" — has, I'm sure, carefully documented all of its conflicts-checking, for example. Everyone's probably been duly sensitized, re-sensitized, and probably over-sensitized, and they've been walking carefully on a plush carpet of eggshells in every matter having anything to do with Rudy and his crew. If there are skeletons in the Giuliani closet, they're far more likely to be in his non-legal (which is not the same thing at all as saying "illegal") business ventures, "Giuliani Partners LLC, and its two units, Giuliani Security and Safety LLC and Giuliani Capital Advisors."


Could some New York-based firm — someone with a big name locally there, and a bigger name nationally than Bracewell — have offered a sweeter package to land Giuliani for one of the home teams? Oh, sure; and apparently one or two nibbled, according to the American Lawyer article. But Bracewell ended up being the gal whut Rudy chose to bring to the Post-Mayor Law-Practice Dance. And he sez, at least, that he's still willin' and eager to keep dancin' with her, if dances at the White House don't ever fill up his dance card. I have no reason to think Rudy's being insincere in this quote:

"There's not a single negative in it," he said in February about his tenure at Bracewell. "If I do not win, I would like to stay here for the rest of my life." ...

But do I think that's actually likely even if Giuliani doesn't get the GOP nomination, or if he loses in the general election? Naw, not very. You can insert your pre-packaged joke about the number and nature of Rudy Giuliani's literal marriages here. But his name partnership at Bracewell is plainly a marriage of convenience for Giuliani and Bracewell both — and it will last exactly as long as it stays mutually convenient.

Indeed, one thing the American Lawyer article got slightly off, I think — besides the groaner of a title, "Lone Star" — was in this introductory paragraph:

When Houston's Bracewell & Patterson called a press conference at the Waldorf-Astoria Hotel two years ago to introduce its new partner, Rudolph Giuliani, the firm's lawyers beamed. Their trophy mate was a real catch, someone who would bring instant name recognition for Bracewell's fledgling New York office. Like a good traditional bride, the firm changed its name to Bracewell & Giuliani.

A traditional bride would have put the Giuliani name first. The most obvious precedent was New York's Nixon, Mudge, Rose, Guthrie & Alexander, where Tricky Dick hung his shingle between being VPOTUS and POTUS, and which was "Mudge Rose et al." before and after.

But Bracewell didn't make Rudy its first-named partner, and for good reason. If — or more likely, when, according to his own wishes and their best wishes for him! — he leaves the firm, they'll go back to "Bracewell & Patterson," or "Bracewell & Somebody," or just plain "Bracewell."

I'm pretty sure Bracewell hasn't ordered more than one year's worth of office letterhead at a time in their new "married name" anyway. But then, not many other big law firms do that these days, either.

Posted by Beldar at 07:24 PM in 2008 Election, Law (2007) | Permalink


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(1) Gregory Koster made the following comment | Jun 4, 2007 11:34:17 PM | Permalink

Dear Mr. Dyer: Thanks for the link to the AMERICAN LAWYER article. It seemed to be as much about the firm and what it does, as Giuliani and what he does for the firm. It's the second part that I would be interested in.

Let me give you some reading in return. THE PROSECUTORS by James B. Stewart is a portrait of the Reagan Justice Department. Giuliani is prominent in the first and last chapters, in his role as Associate Attorney General. I have mixed feelings about Giuliani. The man has huge talents and perhaps equally huge flaws. The AMERICAN LAWYER article touches on this a bit when it mentions Giuliani's battle with prostate cancer and the experience of 9/11. Beyond doubt, these were sobering experiences, and have given him much to reflect about. But the aura of a bully still hangs about him. I think the most important event in his career is the race he didn't take in 2000: running for the Senate against Hillary Rodham. Granted his personal circumstances were at a low. But the prize would have been substantial. Winning, he would be a sitting Senator, with a hammerlock on the 2008 nomination: The Man Who Beat Hillary and sent the Clintons back to their money grubbing. Even losing would have gotten him some chits, as his first mayoral race did.

He didn't do it. This only reinforces the bully image in my mind and makes me wonder just how tough he really is.

Sincerely yours,
Gregory Koster

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