Jones, Day, Reavis & Pogue

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Jones, Day, Reavis & Pogue

North Point
901 Lakeside Avenue
Cleveland, Ohio 44114-1190
U.S.A.
Telephone: (216) 586-3939
Fax: (216) 579-0212
Web site: http://www.jonesday.com

Partnership
Founded: 1893 as Blandin & Rice
Employees: 3,200
Sales: $530 million (1998 est.)
NAIC: 54111 Offices of Lawyers

Jones, Day, Reavis & Pogue (Jones Day) is one of the world’s major law firms, with numerous offices in the United States and overseas. Its clients include about half of the Fortune 500 corporations and several foreign companies, such as CBS, Bridgestone/Firestone, Ernst & Young, Goldman Sachs, Chemical Banking Corporation, Toyota, The Fuji Bank, and Honey-well. Clients from Europe, Asia, Latin America, the Middle East, and Australia call on Jones Day for legal advice. The firm’s international business practice concentrates on mergers and acquisitions, joint ventures, financing issues, labor, environmental, tax, and other corporate concerns. Jones Day is well known for defending numerous companies in high-profile product liability lawsuits, the best known being its long-term representation of RJR Nabisco in hundreds of tobacco lawsuits. The firm is also well known for its antitrust practice.

Origin and Early Practice

In 1893, two experienced lawyers in Cleveland formed a new partnership that years later evolved into Jones, Day, Reavis & Pogue. Edwin J. Blandin, the older partner, was born in New York state in 1843, attended Hillsdale College and Commercial College of Cleveland, and in 1870 was admitted to the Ohio bar. He became a well-known judge and litigator before meeting the junior partner, William Lowe Rice, a native of Delaware. Rice studied civil engineering before serving an apprenticeship in a law office and then being admitted to the bar in 1883. His practice centered on providing counsel to corporations facing increased laws and government regulations in the Progressive Era.

The new partnership played a key role in helping Cleveland and Ohio grow around the turn of the century. For example, the firm’s clients included some of the area’s major utilities, financial institutions, railroads, local interurban transit systems, manufacturing firms, and coal companies. Early partners acted not only as outside counsel, but sometimes served as corporate officers and directors. Companies such as Cleveland Trust Company, W.S. Tyler Company, and the Ohio & Pennsylvania Coal Company hired the firm. The founding partners were prominent citizens and leaders of the Cleveland Bar Association.

In the early 20th century firm attorneys helped write the Ohio Municipal Code and represented corporate clients, including the Lake Shore Electric Railway that connected Cleveland, Toledo, and other nearby communities, and the Baltimore & Ohio Railroad. The firm’s continuing reputation for representations of utility and energy concerns was established with early work on behalf of the East Ohio Gas Company, Ohio Bell Telephone Company, and the Cleveland Electric Illuminating Company.

A 1913 merger with another partnership almost quadrupled the firm’s annual sales, although it still was a relatively small firm with just 14 attorneys in 1918. From the end of World War I to the mid-1930s, the partnership represented O.P. and M.J. Van Sweringen, a local Cleveland family prominent in real estate and railroads. For example, the Van Sweringens purchased in 1916 the New York, Chicago, and St. Louis Railroad, often known as the Nickel Plate. The law firm defended the Nickel Plate against lawsuits and helped it acquire other lines.

In the late 1920s the law firm gained one of its historic victories when it represented the Nickel Plate in Snyder v. New York, Chicago, & St. Louis R.R. The Ohio Supreme Court ruled that the Nickel Plate’s consolidation efforts did not violate the 1920 Federal Transportation Act and that no antitrust laws had been violated. The U.S. Supreme Court upheld the state court’s decision.

Meanwhile, the partnership represented other Van Sweringen business interests, such as the Higbee Company, a major Cleveland department store, and also the family’s construction of Cleveland’s Union Station and Terminal Tower on Public Square. In addition, the firm represented two Cleveland firms started by local inventors: Thompson Products, Inc., which became TRW, and the Weatherhead Company, a diversified manufacturing company that remained a major client until 1983.

In the 1920s the firm began representing the steel companies owned or managed by Elroy J. Kulas, including Otis Steel Company and the Midland Steel Products Company that made car frames and brakes. About the same time firm attorneys developed the land trust certificate as a way to finance new commercial buildings without paying certain high Ohio taxes. Although significant, the land trust certificate was no longer needed after Ohio changed its tax code in the 1930s. Other significant clients developed during the period who would remain clients into the 1990s and beyond were North American Coal and M.A. Hanna Co.

When Cleveland’s Union Trust Company opened on December 31, 1920, firm partner Frank Ginn served as its counsel. Formed from a merger of 29 banks and savings and trust companies, the Union Trust Company was the nation’s fifth largest trust company. In 1924 the partnership moved its office to the newly constructed Union Trust Building, where it remained until 1987.

The Great Depression and World War II

After the stock market crashed in 1929, many businesses declared bankruptcy or were forced to reorganize or recapitalize. Although millions of Americans lost their jobs during the Great Depression, attorneys found new ways to serve clients during the crisis. The famous bank holiday in 1933 led to the law firm helping the Union Trust Company reorganize, while the federal government forced unsound banks to close their doors. The 1935 Wagner Act revitalized the labor movement and led to new work for many labor attorneys, including those at the Cleveland firm.

In November 1938, the partnership, then known as Tolles, Hogsett & Ginn, announced a merger effective January 1, 1939 with a smaller Cleveland law firm called Day, Young, Veach & LeFever. The merged firm named Jones, Day, Cockley & Reavis consisted of 22 partners and 20 associates. The Tolles partnership chose to merge with the Day law firm primarily because of its representation of the Republic Steel Corporation and the iron firm of Cleveland Cliffs Iron Co. In 1940 the merged firm for the first time since the 1929 stock market crash enjoyed cash revenues of over $1 million.

However, America’s entry into World War II resulted in 15 Jones Day lawyers leaving for military service. The firm hired additional associates; some remained after the war ended. During the war the partnership continued its litigation practice, representing its corporate clients as they geared up to meet war demands. For example, about this time firm attorneys devised a way for mining companies to create what were known as “cost companies” as a way to decrease taxes, a mechanism that survived until 1977 as an accessible means of financing joint ventures.

In 1944, an explosion at the East Ohio Gas Company killed 130 people and destroyed about 680 homes. After immediate investigation, on the advice of Jones Day lawyers, the gas company admitted its liability in the Cleveland Plain Dealer. Thus, claims were settled without lawsuits for most victims within three months of the explosion.

Growth in the Early Post-World War II Period

In 1946 Jones Day opened its first branch office in Washington, D.C., based on one of its attorney’s considerable experience in the government. That office in 1952 worked with Luther Day from the Cleveland office to fight President Truman’s order that the federal government take control of most steel mills. Using his authority as commander-in-chief, the president intended to prevent a steel workers’ strike that would hurt the nation’s military during the Korean War. However, the steel industry, including Republic Steel, which hired Jones Day, argued the president’s order exceeded his constitutional authority. In 1952 the U.S. Supreme Court agreed with the steel industry, a ruling that helped Jones Day become a nationally recognized law firm.

In the postwar era, the firm represented two prominent financiers: Abe List, who organized the conglomerate Glen Alden Corporation that later purchased the RKO Theatres Corporation from Howard Hughes; and Cyrus Eaton and his securities firm Otis & Company.

In the 1950s Jones Day worked on securities financing for such clients as American Greetings Corporation, TRW, National City Bank of Cleveland, Sherwin-Williams Company, and the J.M. Smucker Company. It also assisted underwriters such as Smith Barney and Kidder Peabody.

Company Perspectives:

Jones Day aspires to be recognized as one of the few premier firms which will dominate the profession throughout the world in the next century. The firm seeks to be recognized as a law firm of choice for those legal services which are deemed essential to modern corporations, capital providers, financial intermediaries, and other significant institutions, and to be a firm of recognized institutional quality, efficiency, and sensitivity to appropriate client objectives in the coordinated delivery of all legal services to clients throughout the world.

The law firm in the 1960s and 1970s represented Midland-Ross Corporation in mergers with Industrial Rayon Corporation and the National Casting Company. Other corporate clients in that time period were Diamond Alkali Company, Clevite Corporation, Scott & Fetzer Company, Diamond Shamrock Corporation, and Mogul Corporation. In the 1960s, the firm’s litigation practice took root with a number of significant representations, including that of General Motors in several lawsuits involving the much-maligned Corvair, as well as Firestone Tire & Rubber Co. in patent litigation involving oil-extended rubber. In 1972 Jones Day won a case that allowed Ohio banks to start branches outside their home county.

Rapid Growth in the 1980s and 1990s

In 1980, differences in strategic goals resulted in a majority of the Washington, D.C., office splitting away from Jones Day to form Crowell & Moring. Both branches continued to grow and prosper, with the Crowell law firm expanding by the early 1990s to 200 lawyers in three offices. The re-established Washington office eventually grew to over 200 lawyers as well.

The 1980s at Jones Day can be described as a period of geographic expansion. The firm established many new offices during this time, both to serve its corporate clients that were expanding nationally and also to take advantage of new industries developing in different parts of the nation. In 1980 it opened an office in Columbus, Ohio, mostly with local attorneys. On January 1,1981 it opened its new Dallas office following the acquisition of the 20-lawyer Dallas firm of Meyers, Miller, Middleton, Weiner & Warren that represented Crow businesses and was well-known in the local real estate and construction industries.

Although some native Texan lawyers called the newcomers from Ohio “corncobs from the Middle West,” according to the Borowitz history of the firm, that did not stop Jones Day. They gained acceptance in Dallas and other new cities by participating in local bar associations and other civic causes. In 1984 Jones Day opened its second Texas office, this time in the state capital of Austin, a fast-growing city with more high-tech firms supported by research at the University of Texas.

Other new Jones Day offices were opened in Irvine, California; New York; Hong Kong; Chicago; Geneva; Brussels; Tokyo; Pittsburgh; Atlanta; Taipei; Frankfurt; Shanghai; and Madrid. Like many other law firms, Jones Day was responding to an increasingly globalized economy.

Jones Day’s rapid growth in the 1980s was not unusual. Increased economic growth, new high-tech industries, new laws and regulations, and a litigation explosion led to more demands for legal services. Another major factor was the U.S. Supreme Court’s 1977 decision in Bates v. Arizona that lawyers had the right to advertise as a form of free speech guaranteed by the First Amendment. That decision and new legal publications started in the late 1970s, such as the National Law Journal and the American Lawyer that printed data about law firm finances and management, led to increased competition for top partners, higher salaries, and generally an increased business orientation by most big law firms.

Jones Day attorneys played leading roles in the litigation explosion of the late 20th century. In 1980, for example, the firm sued one president and defended another. In cooperation with the Independent Gasoline Marketers Council, it sued President Jimmy Carter over his gasoline tax. Citing the firm’s 1952 defense of the steel industry, the courts found that only Congress could impose such a tax for fuel conservation purposes.

Later that year, Jones Day defended Republican Ronald Reagan during the presidential campaign. The Carter team, represented by Cravath Swaine & Moore, wanted to hold up $29.4 million in federal elections funds while the courts determined the legality of certain independent Reagan committees. Jones Day won this case based on the argument that even a few days delay in distributing the federal funds could seriously damage a campaign.

Major product liability clients were represented by Jones Day in the 1980s and beyond. The firm represented Firestone for over 15 years when it was sued for accidents from multipiece truck rims and wheels. Many cases against Firestone were dismissed, and Jones Day helped dispose of over 100 other cases in ten states, Puerto Rico, and the District of Columbia. Starting in 1987, the law firm represented Sherwin-Williams in lawsuits claiming damages from lead in the company’s paint.

In 1985 R.J. Reynolds (later RJR Nabisco Holdings Corporation) chose Jones Day to be its national coordinating counsel when it and other tobacco manufacturers were sued for health damages. The firm won a jury trial in the Galbraith case in California, a case extensively covered by the media, and by 1999 Jones Day had helped Reynolds win some 250 cases, but the antismoking forces also won their share. In 1997, 40 states reached a settlement with the tobacco industry that agreed to pay $368.5 billion over the next 25 years to compensate the states for healthcare costs, pay individuals suing for damages, conduct research, and fund programs to prevent juveniles from starting smoking.

Key Dates:

1893:: Edwin J. Blandin and William Lowe Rice begin partnership in Cleveland.
1900:: Firm name is changed to Blandin, Rice & Ginn with addition of partner Frank H. Ginn.
1912:: Partnership becomes Blandin, Hogsett & Ginn after Thomas H. Hogsett joins firm.
1913:: Firm is renamed Tolles, Hogsett, Ginn & Morley.
1927:: Firm adopts name of Tolles, Hogsett & Ginn.
1939:: Merger with another Cleveland firm leads to name Jones, Day, Cockley & Reavis.
1946:: The firm’s office in Washington, D.C., is opened with three lawyers.
1967:: Washington, D.C. office merges with Pogue & Neal.
1974:: Jones, Day, Reavis & Pogue is adopted as firmwide name.
1986:: Firm merges with Surrey & Morse, adding offices in New York, London, Paris, and Riyadh.
1989:: Brussels, Tokyo, and Pittsburgh offices are opened; merger with Atlanta’s Hansell & Post.
1993:: Firm celebrates its centennial by publishing its own history.
2000:: Firm opens its office in Madrid.

In 1999 gun manufacturers faced lawsuits from at least 23 municipalities that blamed them as being at least partially responsible for violence in America. Colt Manufacturing Company chose Jones Day as its national coordinating counsel.

To serve clients such as RJR Nabisco and Colt and others involved in lawsuits, Jones Day by the late 1990s had over 500 lawyers involved in about 4,000 litigation cases in the United States and international settings.

Partners at Jones Day and other major law firms earned hundreds of dollars per billable hour, and Americans of modest means could not typically afford such legal services. In his 1994 book The Betrayed Profession, Sol Linowitz quoted Jones Day partner Erwin Griswold, a former Harvard Law School Dean, as recalling that “some of his most depressing moments are when he has to tell people he knows who need the services of a lawyer that, except for truly pro bono work, of which his firm does a good deal, its managing committee can’t even consider matters where the amount involved is less than $25,000.” While Linowitz was lamenting the ways in which the legal profession had changed over the century, the example nevertheless pointed to the success of firms such as Jones Day.

During the 1990s, Jones Day built one of the nation’s premier bankruptcy practices. It represented the debtor in matters for Federated Department Stores, TWA, Montgomery Ward, Morrison-Knudsen, and USG Corporation. It represented the creditor committees in bankruptcies involving Olympia & York, Drexel Burnham Lambert, Resorts International, and Allegheny Health, Education & Research Foundation.

Also during this time, Jones Day emerged as a leader in the mergers and acquisitions practice. Consistently ranked in the top five firms based on the number of transactions handled, the firm has represented clients across a broad spectrum of industries with particular concentration in the energy, media, telecommunications, and health care industries.

According to annual surveys by the American Lawyer, Jones Day ranked as the United States’ third largest law firm based on its 1997 revenues of $490 million and its 1998 revenues of $530 million and its 1998 revenues of $530 million. With about 1,300 attorneys in 2000, Jones Day remained a major international law firm, but it faced plenty of competition and challenges. Several law firms merged, creating larger firms to serve clients growing in the globalized economy. For example, in 1999 London’s Clifford Chance and New York City’s Rogers & Wells announced the first merger of major British and American law firms. Moreover, top accounting firms employed thousands of lawyers, and one of the big issues that confronted Jones Day and other law firms in 2000 was the possibility of the American Bar Association allowing lawyers to work with other professionals such as accountants.