Arnold & Porter

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Arnold & Porter

Thurman Arnold Building
555 12th Street N.W.
Washington, B.C. 20004-1202
U.S.A.
Telephone: (202) 942-5000
Fax: (202) 942-5999
Web site: http://www.arnoldporter.com

Partnership
Founded: 1946 as Arnold & Fortas
Employees: 1,200
Sales: $218.5 million (1998)
NAIC: 54111 Offices of Lawyers

Arnold & Porter is one of the largest law firms in the United States and in the world. It has a long history of representing corporations in all aspects of modern business law, from taxation and financing to antitrust and mergers and acquisitions. Since the 1950s it has represented Philip Morris Inc. The firm in the past decade has helped its clients organize more than 100 joint ventures in more than 20 nations. Sometimes legislative solutions are necessary, so Arnold & Porter lobbies Congress, state governments, and overseas governments to write new or improved laws. Since the firm began in 1946, it has had a well-earned reputation for helping those with limited resources gain access to legal counsel. Much of that reputation derives from its pro bono defense of those accused of being communists during the McCarthy era and from representing poor convict Clarence Earl Gideon in a landmark 1963 U.S. Supreme Court case that established the right of all to legal counsel. Arnold & Porter is well known for its innovative child care programs and other initiatives that make it easier for working mothers to practice in a large law firm.

Origins of the Law Firm

Thurman Arnold, the founder of Arnold & Porter, was born in Laramie, Wyoming in 1891. The son of a lawyer, Arnold graduated from Harvard Law School in 1914, practiced law until 1917, and then served in the military during World War I. After the war, he returned to practice law in Laramie. In 1920 he began his government service by being elected as a Democrat to the Wyoming House of Representatives. In 1927 he became the dean of the West Virginia University Law School, and in 1930 he joined the Yale Law School faculty.

In the 1930s Arnold served in the federal Agricultural Adjustment Administration, as an advisor to the U.S. governor general of the Philippines, and as a trial examiner for the newly created Securities and Exchange Commission. From 1938 to 1943 he became well known for his vigorous enforcement of antitrust laws as the head of the U.S. Justice Department’s Antitrust Division. Arnold served as a judge in the U.S. Court of Appeals for the District of Columbia from 1943 to 1945.

Arnold had become a well-known critic of social and legal orthodoxy in the 1930s and 1940s. He authored six books, including his best-selling The Folklore of Capitalism in 1937. He advocated moral relativism, a philosophy that rejected absolute and universal moral absolutes, and legal realism, a form of judicial activism to meet the needs of society.

Thus in 1945 Arnold was already quite prominent when he decided to return to private law practice. His first partner stayed just a short time. Then in January 1946 Arnold persuaded Abe Fortas to join him to form Arnold & Fortas. Fortas taught at the Yale Law School after he graduated from there. During the Roosevelt presidency, Fortas served as the under secretary in the Department of the Interior led by Secretary Harold Ickes.

In 1947 Paul Porter joined the firm, which was renamed Arnold, Fortas & Porter. Laura Kalman, in her biography of Abe Fortas, argued that the three name partners had little in common. But Norman Diamond, who joined the firm shortly after it was formed, said in his history of the firm that Kalman’s conclusion “makes no sense to me … [Fortas’s] knowledge of Arnold traced to their concurrent service in three different environments. They were colleagues on the Yale Law School faculty. They worked on at least one common project at the Agricultural Adjustment Administration. Both were involved with … the Securities and Exchange Commission.” Porter had also served at the AAA and was a well-known New Dealer with a common affinity for liberal principles.

The early partnership participated in some major cases after World War II. From 1947 to 1958, it defended without compensation Americans accused of communist loyalties or sympathies during the Second Red Scare or McCarthyism. The firm’s defense of State Department employees accused” of disloyalty was covered in front-page articles in the New York Herald Tribune and later in a Pulitzer Prize-winning book by Bert Andrews. From 1950 to 1958 the law firm aided Owen Lattimore in his fight for civil rights during the excesses of McCarthyism. In the 1955 Peters v. Hobby case, the U.S. Supreme Court ruled for Peters, the firm’s client, on a technicality and also wrote the only Supreme Court opinion on the loyalty program of the Truman and Eisenhower administrations.

By 1951 the partnership had added Pan American Airways, Lever Brothers, Western Union, Otis Elevator, the American Broadcasting Company, and Sun Oil to its client list. Federated Department Stores hired the firm, and Abe Fortas became a Federated director. Other new clients in the firm’s early years included the National Retail Merchants Association, Braniff International, Cyrus Eaton, Investors Diversified Services, Philip Morris, and Unilever.

The firm grew to meet the needs of its growing clientele, from three partners and four associates in 1947 to nine partners and six associates ten years later. In 1960 the entire Washington, D.C. office of the Paul, Weiss, Rifkind, Wharton, and Garrison law firm left to join Arnold, Fortas & Porter. That office previously had done taxation work for Arnold, Fortas & Porter’s clients, and in 1960 it became the new tax department—the first time Arnold, Fortas & Porter created separate practice areas. As new laws and regulations proliferated, legal specialization increased at other large law firms as well.

The partnership defended Playboy magazine soon after it was started by Hugh Hefner in 1955. Judge Arnold argued that obscenity laws were morality based, not the result of rational thinking. The state of Vermont soon dropped its prosecution without a trial. In 1958 the law firm helped the new publication keep its permit for low-cost second-class mail, a crucial development in Playboy’s early financial survival.

In 1963 the U.S. Supreme Court asked Abe Fortas to represent a poor convicted criminal named Clarence Gideon, who had been denied legal counsel by the Florida state court that convicted him. After the Florida Supreme Court upheld his conviction, Gideon himself wrote to the U.S. Supreme Court to appeal his case. Fortas gained a unanimous decision from the court that all persons accused of serious crimes had a constitutional right to legal counsel that would be provided at no cost if they could not afford to hire their own lawyer.

In the late 1940s, Abe Fortas became well acquainted with Lyndon B. Johnson (LBJ), the Texas Democrat, and Fortas in the 1960s was one of President Johnson’s closest advisors. For example, Abe’s law partner Norman Diamond wrote, “It’s common knowledge that Abe was responsible for LBJ’s establishment of the National Council on the Arts in 1965 and the selection of Roger Stevens, Abe’s friend and client as its head.” Although still a law partner, Fortas spent most of his time advising President Johnson on many matters.

Such personal ties to prominent figures like LBJ helped the law firm attract clients. In 1965 LBJ appointed Fortas to the U.S. Supreme Court, a position Fortas never sought and reluctantly accepted. That took Fortas to the top in terms of professional status, but soon it led to his downfall. On May 14, 1969 Fortas resigned from the court because of a scandal in which he agreed to take money from a private client while still sitting on the court. Thurman Arnold and Paul Porter wanted him to return to the law firm, but the younger partners objected. They felt that the firm would be hurt, especially since the American Bar Association had criticized Fortas’s behavior that led to his resignation.

With Fortas gone, the partnership soon lost its other two founders. Thurman Arnold died on November 7, 1969 and Porter a few years later. A new generation of leaders accepted the challenge to move forward in the middle of a major transformation in how large law firms operated.

Practice in the Late 20th Century

The late 1970s marked a watershed in the history of America’s large law firms. At that time the U.S. Supreme Court said professional associations violated the right to free speech by restricting professional advertising. Soon more professionals began advertising just like other businessmen.

In addition, two new magazines revolutionized legal journalism. The National Law Journal and the American Lawyer began publishing articles and ratings of the top law firms based on their finances and management. This new information allowed experienced attorneys to seek better offers in rival law firms. Thus lateral hiring increased, as did the demand for new law school graduates, whose beginning salaries gradually increased.

Key Dates:

1946:: Thurman Arnold and Abe Fortas organize Arnold & Fortas in January.
1947:: The firm is renamed Arnold, Fortas & Porter with the addition of Paul Porter.
1960:: Paul, Weiss, Rifkind, Wharton, and Garrison’s Washington, D.C. office joins Arnold, Fortas, & Porter.
1963:: Abe Fortas wins U.S. Supreme Court case Gideon v. Wainwright.
1965:: The firm is named Arnold & Porter after LBJ appoints Abe Fortas to the U.S. Supreme Court.
2000:: Joint venture started with Budapest firm of Kovacs Barborjak & Kende Lendvay Katona.

The bottom line was that most large law firms grew by leaps and bounds and changed their traditional ways of operating. By the mid-1980s, said Norman Diamond, Arnold & Porter “had grown into a bureaucracy with some 300 lawyers plus a support staff of close to 1,000 men and women.” The company had a formal governing system, a 700-page handbook for partners, and specialists had replaced generalists.

In 1985 the University of California at Irvine sold a group of 100 homes worth $300 million to faculty members. Through its real estate and financial-consulting subsidiaries, Arnold & Porter built and developed this complex. The firm’s Myron P. Curzan argued in the November 18, 1985 Wall Street Journal that Arnold & Porter’s diversification into such new ventures resulted from “natural evolution” as a way to provide many services to clients. Other law firms participated in investment banking, advertising, and consulting.

Arnold & Porter in 1987 responded to the increasing number of attorneys who often struggled to balance career and family demands by starting a child care center. Open at nights and on weekends, the center was used just when parents had to work overtime. In 1997 the firm estimated that its child care center allowed an extra $800,000 in annual billable hours. By that time, it claimed the distinction of operating “the first full-time, on-site child care facility run by a law firm,” according to a press release dated September 15, 1997. In 1997 Working Mother magazine honored Arnold & Porter for the second year in a row as one of the “100 Best Companies for Working Mothers,” the only law firm on the list.

In the 1990s Arnold & Porter continued to represent its longterm client Philip Morris Company. Under attack from both the federal government and many state governments, by 1997 the tobacco industry was spending about $700 million annually for defense lawyers to protect it in court.

Arnold & Porter’s long history of defending Philip Morris against liability claims helped it gain other clients in similar cases. For example, Wyeth-Ayerst hired the firm to defend itself against class-action lawsuits filed in behalf of alleged victims who had used two popular diet drugs, Redux and fenfluramine, marketed by Wyeth-Ayerst.

Arnold & Porter helped transform former government agencies into private businesses as part of a major worldwide trend of the 1980s and 1990s. For example, in 1996 the law firm helped create U.S. Investigations Services Inc. (USIS), incorporated in Delaware, which replaced the Office of Federal Investigations in the U.S. Office of Personnel Management. This first privatization of a federal agency resulted in USIS becoming North America’s largest private investigations firm, in part because it had no significant competitors in serving the federal government.

In 1997 Arnold & Porter built on its 1963 Gideon case by gaining a favorable settlement in the case of Farmer v. Reno [Janet Reno, U.S. Attorney General]. The firm represented Dee Farmer, a prison inmate and paralegal. In the end, the federal government issued new prison regulations that allowed so-called “jailhouse lawyers” to have access to legal materials in prison law libraries or other areas under the warden’s authority. Such cases were ways to make sure that all Americans had access to the legal system, thus strengthening respect for the rule of law in the United States.

In 1997 the Brazilian government honored two Arnold & Porter attorneys for their service to Brazil. The award came after the law firm had served Brazil in financial matters for more than ten years.

Based on Arnold & Porter’s 1997 gross revenues of $192 million, the American Lawyer in July/August 1998 ranked it as the United States’ 41st largest law firm. At that point it had 368 lawyers. The firm’s 1997 revenues also earned it a ranking as the world’s 49th largest law firm, according to the American Lawyer in November 1998.

The following year the firm slipped to 45th largest in America, based on its $218.5 million 1998 gross revenue. The American Lawyer in July 1999 also reported that Arnold & Porter had 404 lawyers and that it ranked as the fifth best law firm for its pro bono work.

At the dawn of the new millennium, Arnold & Porter faced competition from several larger law firms. Effective January 2000, the world’s largest law firm was London’s Clifford Chance, which employed almost 3,000 lawyers after merging with firms in New York City and Germany. Arnold & Porter also faced a rapidly changing economy, with new forms of currency such as the “euro” along with the Internet-based electronic economy.