James Elkins, who co-founded Vinson & Elkins in 1917 at the tender age of 37, is remembered as a bit of a curmudgeon.
He drank coffee sparingly and, it is said by lawyers at the firm today, even partners had to sneak their trips to the local coffee shop or face a tongue lashing from Elkins. Same for golfing.
“If he could detect you played golf on the weekend by the tan line from your golf glove, he’d let you know it,” said John Taurman, an of counsel at the firm, who has a keen interest in history.
Elkins never owned a home, preferring to live on the top floor of the Rice Hotel, which still stands on Houston’s main street though it was converted into lofts.
The firm celebrates its 100 anniversary this year. Established by William Vinson and James Elkins, the two-person law firm has grown to about 700 attorneys with 16 offices across the world — with the largest office still in Houston. Although its profits-per-partner fell in 2015 by about 2 percent to $1.8 million, it had been riding a 12.6 percent year over year increase in 2014, according to The American Lawyer. Chairman Mark Kelly said 2016 was a strong year, as work in restructuring and M&A and capital markets has helped make up for the slump in the energy market, although he declined to disclose numbers.
Vinson and Elkins were already established lawyers when they teamed up, according to Taurman, who is the past chairman of the firm’s history committee.
[Editor’s Note: The firm formed a history committee in 1992, when Rice professor Harold Hyman set out to write a book about the firm, Craftsmanship & Character, which was published through the University of Georgia Press in 1998. The role of the committee was to support the author’s research.]
Vinson was the elder of the two at 42 years old. Previously, he had operated a law firm with Judge Ernest Townes. But when Townes passed in 1917, Vinson looked for another partner and settled on “Judge Elkins,” as he was known to all due to a two-year stint as a county judge in Walker County, Texas.
“The two big firms in town were the predecessors of Baker Botts and Andrews Kurth,” said Taurman. “They had a dozen lawyers each. Fast forward 20 years to 1937, Vinson & Elkins has 42 lawyers and their nearest competitor, Baker Botts, has 36.”
According to a 2016 Houston Business Journal survey, it is still the largest law firm by headcount in the city with 263 lawyers.
While Vinson was older, Taurman said Elkins “was the man that drove the growth of the firm those first 20 years as well as the 30 years after … He was the key figure in making the firm a leader in Houston.”
The firm’s most important case was also one of its shortest, according to Michael Harrington, a V&E partner and member of the firm’s history committee. The year was 1921 and A.E. Humphreys, known as the “King of the Wildcatters” because of his knack for finding oil gushers, needed help collecting an account receivable from Texas Company, now known as Texaco. The amount was just over $1 million. The state’s Attorney General sent Humphreys to Elkins on a referral.
“That was some real money in 1921,” Harrington said. “Judge Elkins picked up the phone, called Texaco. Mr. Humphreys had a check sent over to him in short order.”
Delighted at the result, Humphreys hired the firm to do all his oil and gas work. V&E opened offices in what were then oil boom towns of Mexia and Cisco, Texas, where he operated, Harrington said.
“That transaction was instrumental in Vinson & Elkins becoming a real factor in oil and gas law,” he said.
Three years later, in 1924, Elkins made arguably a bigger contribution to the firm’s growth by starting a bank, Harrington said.
Called the Guaranty Trust Company, it eventually became First City National Bank, one of the largest banks in Texas by the 1970s. As the bank chairman, Elkins offered his law partners access to credit, and gave his law firm a steady stream of clients — any of his bank clients would be referred to Vinson & Elkins for their legal needs.
“I couldn’t say definitely if Elkins was the only lawyer to start a bank, but it is definitely unusual,” said William Henderson, a law professor at Indiana University. “Of course, in the 20s, there wasn’t the public’s concern over conflict of interest like there is now.”
Still, there’s a long history in the U.S. of tight relationships between law firms and banks.
Henderson said a 2010 study of law firms showed many of the top-performing law firms in the 1940s had strong relationships with major commercial and investment banks. Almost 70 years later, those firms were still some of the largest firms, he said.
In the early 20th century, many law firms located their offices in the banks they represented, according to David Wilkins, professor at Harvard Law School.
“This is unusual in its origin story, but the basic story is very similar,” Wilkins said.
Today, regulation on ownership and conflicts of interest would prevent firms from starting a commercial bank, Wilkins said.
Elkins, who passed away in 1972, spent most of his later years at the bank, Harrington said. In the 1970s, First City National Bank of Houston became the largest bank in Texas. But the stock market crash of 1988 finally drove the bank into bankruptcy. One relationship remained alive however: Vinson & Elkins handled the bankruptcy case.
In the 1980s, Vinson & Elkins represented ETSI Pipeline against Santa Fe Southern Pacific Corp. in an antitrust case. The pipeline company accused Santa Fe and other railroads of trying to block the construction of a coal slurry pipeline from Wyoming into Louisiana. The firm won a record-setting $1 billion antitrust award, showing it could handle plaintiff’s side work in addition to its usual diet of defense-side work.
“Over the years, we’ve taken on plaintiffs work in addition to defense work,” Taurman said. “I think it makes you a better lawyer on both sides to have done both sides.”
The firm was also outside legal counsel to Enron Corp., which collapsed in 2001 in what is still regarded as one of the largest frauds in recent history. Vinson & Elkins agreed to pay $30 million to Enron’s bankruptcy estate.
One unique practice at the firm has somehow persisted: Every day, the firm issues a “daily statement” of the cash that it received, and all its cash disbursements, as well as some billing information. Every lawyer at the firm, including associates, gets this information, according to Kelly.
“I think our view that it’s a family, firm and people have the right to know what’s going on,” he said.
Kelly, who has been at the firm for 35 years, said he has never held another legal job.
“We’ve had people here that have gone through difficulties,” he said. “Lost a child, had sicknesses, and the thing that was always remarkable is the ability or willingness for people to step up, the firm to take care of that person, give them space. What I love about this place is whether it’s the administrative staff or the coffee bartend, they are all important to the overall mix of the firm.”
Explore Vinson & Elkins’ Litigation Analytics profile on Bloomberg Law.