Planning for the future sometimes means looking at what has gone before.
Baton Rouge’s legal community has roots steeped in small-town gentility and big-city challenges that continue to serve them well, and diversification has become a core strategy as firms plot their course through the economic downturn and a shifting business landscape.
The outlook for 2010 is generally positive. Some firms are looking at growth opportunities as additional federal regulations roll out over the next year. Still other firms are keeping an eye on cap and trade, which might create more work for those companies tied to the petrochemical industry while also curtailing the often-extensive legal budgets levied by those clients.
“So much of the litigation we do is not tied to what is happening now,” says Gary Bezet, the managing partner at Kean Miller, which has a heavily petrochemical client base. “The uncertainty affects their budgeting, and we are under tremendous pressure to control costs. There we’re affected by it, but litigation goes on regardless of cap and trade or gas prices. We plan as best we can.”
Each firm has a number of specializations, including general litigation, environmental, tax, health care, real estate and governmental relations, to name a few. Regardless of the outlook and the individual ways that firms have of coping with the economic downturn, they agree on one thing: Change is coming.
How Baton Rouge’s legal community addresses that change depends on a number of factors, including each firm’s specialties, growth pattern and development.
From the 1900s through the early 1950s, the bulk of the city’s legal services were in general litigation, finance and real estate. Taylor Porter, the area’s oldest surviving law firm, was founded in 1912 and was part of a small but thriving community that included Breazeale, Sachse & Wilson, which was founded in 1928.
It wasn’t until the 1960s and ’70s, when petrochemical companies such as Exxon and Shell began taking an interest in Louisiana because of the copious natural resources the state had to offer, that Baton Rouge firms began expanding their practices.
That meant enormous growth because of the litigation and environmental regulation workload, not to mention the new employees that needed real estate, financial and estate planning services. New businesses dependent on the petrochemical industry also meant more tax and other business services.
Combine the introduction of clients with big budgets and a big need for legal services with proximity to the Capital City, and it’s easy to see why Baton Rouge became an attractive market for New Orleans-based firms. Jones Walker opened a Baton Rouge office in 1980 headed by attorney Robert Casey, who still practices with the company. Phelps Dunbar and Adams and Reese also opened small practices downtown.
“It was the recognition that their presence in New Orleans was not meeting all of their clients’ needs,” says V. Thomas Clark Jr., a partner at Adams and Reese. “Firms that have any interest in governmental relations, or are representing their clients’ interest in government, need to have a presence in the state capital.”
Brett Furr, a partner at Taylor Porter, says the influx of New Orleans-based firms sparked some concern—and even panic—among local firms. The legal community eventually settled into an equilibrium that has captured the best of the old Baton Rouge culture and the competition from a larger market.
“The Baton Rouge bar had this big fear of the New Orleans invasion,” he says. “It was all overblown. They’ve come in and assimilated, and now we have a lot of good friends at the New Orleans firms that practice in Baton Rouge.”
Some of the shakeup also was homegrown.
In 1983, a split in the Baton Rouge firm Sanders, Downing, Kean and Cazedessus resulted in the birth of Kean Miller, which has grown to become the city’s largest firm. Most New Orleans-based firms hired attorneys already located in Baton Rouge, or merged with other firms because clients wanted local attorneys, says Charles Landry, Of Counsel at Jones Walker.
“This market’s different,” he says. “People here like to use local talent and resources if they’re available.”
Hurricane Katrina rattled the legal community in and out of the courtroom. Baton Rouge firms opened their doors to displaced peers from New Orleans, even if all they could offer were a computer and workstation. But the 2005 storm also prompted better communication between firms with offices in both cities by driving technology upgrades and off-site data storage.
“You saw much more communication and engagement in activities that brought New Orleans and Baton Rouge closer together,” Clark says. “To me, its been understanding that we are a balance between these two marketplaces. We have a foot in each, and by straddling the area, we can better serve all our clients.”
Immediately after Katrina, litigation ground to a halt because courts were closed and attorneys and judges were displaced. When the legal community picked up again, the number of lawsuits filed because of the storm—combined with the economic boom—helped buoy firms. Now, in the midst of the recession, some of those cases are beginning to be settled.
Most Baton Rouge firms have remained relatively unscathed by the recession. And while this year did involve belt-tightening and strategic planning, none of the city’s five largest firms has laid off attorneys.
“I’m cautiously optimistic,” Bezet says. “Given how well we’ve survived this year, and the new clients and activity we’ve seen, I think next year will be modest growth for us and the legal community in general. I don’t think it’ll be enough to say happy days are here again.”
Some of the federal regulations currently under debate in Congress, such as health care and cap and trade, will have an impact on Baton Rouge’s economy, but that doesn’t necessarily mean lawyers will be out of work. The rule seems to be the more federal regulation in place, the more work attorneys have to support themselves.
“There’s always the possibility that the initial reaction is that [federal regulation] provides more work for lawyers because any regulatory scheme is going to involve analysis and response,” says Michael Hunt, managing partner for Phelps Dunbar.
So where does the Baton Rouge legal community go from here?
It’s about each firm positioning itself to take advantage of the economy once recovery starts. Some firms are hopeful the film industry and digital media tax credits the Legislature approved this year will provide growth opportunities for Louisiana as well as the local community.
“We’re looking at what’s going to be the next big thing,” says Steve Boutwell, client services director for Kean Miller. “Petrochem is going to be here for a long time, but what’s next? Digital interactive media looks like one of those things that could be big in Louisiana.”
Several firms say Baton Rouge’s efforts to promote economic growth and diversity give them a springboard because the legal community ultimately is a service industry.
“We’re here as a support structure,” Clark says. “We’re here to help the dreamers, the entrepreneurs, the people that are already out there doing business. We want to help them accomplish their goals and reach their dreams.”
