The Firms

December 7, 2011 8:03 PM

With Shook Lawyers, Hughes Hubbard Is Going to Kansas City

Posted by Sara Randazzo

Hughes Hubbard & Reed is making a move into America's heartland as of January 1 with the addition of a products liability litigation team from Kansas City–based Shook, Hardy & Bacon, the two firms confirmed Wednesday.

The surprising expansion for New York–based Hughes Hubbard comes as regulatory changes prompt tobacco companies to insist that their outside law firms cut ties to industry rivals. In adding a Shook group that totals between 20 and 25 lawyers, analysts, and staffers, Hughes Hubbard will also take over all of Shook's work for Lorillard Tobacco in a transition expected to span several months, according to Shook chair John Murphy.

Shook, meanwhile, will continue to represent longtime client Philip Morris USA, Murphy says.

When it comes to growth, Hughes Hubbard—which topped The American Lawyer's A-List for the first time this year—is known to proceed cautiously. The 123-year-old firm last opened a new office in 2003, when it ventured to Jersey City to service pharmaceutical clients. The firm's other offices are in Los Angeles, Miami, Paris, Tokyo, and Washington, D.C. At last count, according to sibling publication The National Law Journal, the six non–New York offices combined accounted for less than a third of the firm's 300 lawyers.

Hughes Hubbard managing partner Theodore Mayer said the Kansas City office presents a chance to "strengthen the roster of jury trial lawyers" within the firm and "add depth and reach to our national litigation practice." He says the firm expects the Kansas City team to handle work for companies besides Lorillard, though he acknowledges that tobacco cases will consume much of the attorneys' time.

The group arriving from Shook includes six partners and three of counsel, according to Murphy, who added that a handful of people are moving from Shook's Florida office. Ultimately, Mayer says, a total of about 30 people will help launch the Kansas City office.

That office will be at 2345 Grand in Kansas City's Crown Center District, according to Mayer. The building, designed by famed architect Mies van der Rohe, is currently home to several other law firms, including Armstrong Teasdale.

Mayer acknowledged that the firm has been careful about where it chooses to open new offices, and goes largely where there's been existing client need. "We pick our spots to invest in where it ties in with our strengths," he says, adding that the new office fits into that strategy.

Neither Murphy nor Mayer would identify any of those leaving Shook. One attorney who appears to be joining Hughes Hubbard in Kansas City is William Allinder, a former Shook partner who left that firm at the end of 2010 to open his own practice in suburban Smithville, Missouri. Allinder is identified as Hughes Hubbard's registered agent on a business registration form the firm filed with the Missouri Secretary of State's office on November 28.

That Allinder would be among those jumping to Hughes Hubbard makes sense. He has long served as Lorillard's national coordinating counsel and senior litigation adviser, according to the biography on his firm's Web site. Murphy says Allinder's departure last year was part of Shook's gradual separation from Lorillard. Allinder did not immediately return a call placed to his office Wednesday.

Gregg Perry, a Lorillard spokesman, confirmed in a statement that the company is consolidating its legal work in Kansas City with Hughes Hubbard and expects the transition away from Shook to be complete by the middle of next year.

"Hughes Hubbard & Reed is widely recognized for its product liability defense work, and Lorillard believes having access to the expanded legal expertise . . . fits well with our long-term strategy of defending every lawsuit," Perry said in the statement. "We expect no change in our defense strategy."

Perry said in a subsequent e-mail message that Lorillard first tapped Hughes Hubbard for the so-called Engle litigation in Florida, a collection of some 8,000 suits brought by Floridians that emerged from a 1994 class action named for lead plaintiff Howard Engle. Mayer says the firm's relationship with the company began with a September 2010 call inviting the firm to join Lorillard’s team of outside counsel.

The Kansas City office opening is largely a product of the shifting regulatory landscape confronting Big Tobacco.

With the Food and Drug Administration turning up the heat on tobacco makers in recent years, industry rivals are increasingly at odds over how far regulators should go, says Stephen Sugarman, a professor at the University of California, Berkeley School of Law who has written extensively on tobacco litigation and regulation.

Philip Morris, Sugarman says, has generally been more supportive of stricter regulations, in part because  its dominance within the industry—in 2010, the company controlled nearly half the domestic retail market for cigarette sales—makes it more immune to those regulations. Bans on certain types of advertising, for example, would have less impact on a nationally recognized brand such as Philip Morris's Marlboro than on lesser known brands trying to elbow their way into the market, Sugarman says.

Until the 1990s, the industry presented more of a united front, says Sugarman. That unity began to crumble with the landmark $200 billion Tobacco Master Settlement Agreement in 1998, in part because the settlement stipulated that several industry groups disband, he says.

That tobacco industry rivals are following divergent paths is no different than what has happened in other industries, according to Murphy, who adds that Hughes Hubbard was the only firm in the running to take over Shook's Lorillard team.

Murphy says the losses won't have much effect on Shook, that the entire process has been "a seamless transition," and that "the defense of industry will continue seamlessly."

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