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Interview with: Gibson Gayle
Interviewed by: Dr. Joseph Pratt
Date: November 5, 2007
JP: This is an interview with Gibson Gayle, Jr., a long-time partner of Fulbright and Jaworski. We are in the Fulbright and Jaworski Tower in downtown Houston. The date is November 5, 2007. The interviewer is Joe Pratt. Mr. Gayle, we would like to start by talking a little bit about your family background growing up in Waco Texas, how you came to go to Baylor, this kind of thing.
GG: Well, I was born in Waco, and my father died when I was 8, but my mother and I stay on there and I graduated from Waco High School in January, 1943. I just turned 16 and World War II was going on but I had a little time before going off. I grew up two blocks from the Leon Jaworski family home on South 8th Street and that was located probably three blocks from the Baylor campus. I did OK in high school in grades and when I got out, I got a call one day from Pat Neff who had been governor of Texas back in the 1920s and was then president of Baylor University, and he said, “Young man, come over to see me at 2:00 this afternoon.” So, I went over there and he said, “All right, I know you were valedictorian of your class in Waco High School. I am going to give you a scholarship if you will go to Baylor.” I said, “Sir, thank you very much. I accept.” So that is how I got to Baylor. And as time went on, when I turned 17, I started thinking about, you know, what was going to happen to me as far as World War that have II was concerned. In the summer of 1944 when I was still 17, I applied for the Navy V12 program and had an indication that I would probably be accepted but I got a Dear John letter from the Navy in September just before my birthday saying, we 12 oh don’t have any more vacancies any more so we cannot take you. Well, there I was, so I registered for the draft and wound up going in the service February 13, 1945. I was sent to Port Sam Houston in San Antonio. The infantry did not like me because I had flat feet so I went off to Fort Bliss Texas and did basic training in the antiaircraft division of the coast artillery. I finished in May of 1945 and instead of sending me to Okinawa to rid the island of the remaining Japanese troops, like they did nearly everybody I went through basic training with, the Army, in its infinite wisdom sent me to radio and radar school there in Fort Bliss, and if there happened to be a less qualified person to do that kind of work than Gibson Gayle, I never saw one. So I stayed a few months and was shocking myself daily. I finally decided in order to save my life, I applied for OCS and about the time the war was over, I went to Officer Candidate School at Fort Sill, Oklahoma. I graduated February 8, 1946, spent another year traveling around the country to North Carolina, and Fort Lewis, Washington, and Fort Ord, California, and my last assignment was an unfortunate one to the Naval Amphibious base as an Army officer on the Coronado strand right down the street from the Hotel Del Coronado. Then, I came back home. I never really thought much about being a lawyer because people my age, when the war was going on, you know, about all we thought about was whether we were going to come back or not. So I got to thinking that maybe I would give the law a shot and Baylor had a program where instead of requiring an undergraduate degree to get in law school, they had a six year joint program of three years undergraduate and three years of law, were law could be the major for a degree and I had a minor in English, so I took the six year route, graduated in 1950, took the Bar, passed it, and started looking for a job. I had married when I was a first year law student, so by the time I graduated two years later, I had a very young baby daughter. I had heard a man named Henry Strasburger try a lawsuit and a lot of people thought he was probably the best trial lawyer in Texas. Growing up in Waco, I thought Dallas was the end of the rainbow. So I went up and applied for a job at the firm of Strasburger, Price, Holland, Kilton and Miller, but was told there were no vacancies so I went back home and went by the dean’s office and he said he was writing Leon Jaworski a letter and wanted to recommend me for a job down in Houston. And I told him that I really was scared of Houston because I did not know much about it and it was too big for me, and he reminded me that with a wife and a young baby girl, maybe I had better get a job somewhere. So, he talked me into coming down for an interview which I did and the firm hired me to report on June 26, 1950. The firm name was Fulbright, Crooker, Freeman and Bates at that time all.
JP: Had you heard of the firm before then? Had you been to Houston before then? Will
GG: I had probably been to Houston twice in my life, I think probably both of them to see football games of some kind, and I had heard of Leon Jaworski. I had actually met him when I was a first year law student because he came up and was the principal speaker at the law school banquet. He had already earned quite a reputation as a lawyer, so I knew that the law firm was a fine firm but it had 42 lawyers and that scared me pretty much, too, as to being the 43rd lawyer in a law firm. But I took the dean suggestion to heart that I’d better get me a job somewhere. So I started with the firm on June 26, 1950.
JP: Your observations when you came here about Houston and the law firms in Houston including your own?
GG: I did not really know much about them because I don’t think any of the law firms interviewed at Baylor Law School at that time. There was a lawyer named B.J. Bradshaw who was one year ahead of me at Baylor Law School, who graduated in 1949, and he had been hired primarily at the instance, I think, of Leon Jaworski. I do not believe Baker Botts had any lawyer at that time from Baylor. Vinson Elkins had probably two, one a man named Victor Bolden, who was the head of the bond work there, and one other lawyer named Gordon Stokes, but I do not believe they had more than two. Andrews Kurth now had two Baylor lawyers. Harry Jones, who became a name partner at Andrews, Kurth, Campbell and Jones in later years was a classmate of Leon Jaworski in the class of 1925, but when I came down here, I really did not know much about any other law firm.
JP: Where did most Baylor law graduates go to work?
GG: Well, Houston had quite a number of them but they were not big firm lawyers. Most of them stayed in Waco actually. The law school was very small at the time, did not have a whole lot of graduates. A lot of them went to Dallas, some of them to Fort Worth, a good many to San Antonio, and Houston had some but not very many in big oil firms.
JP: So, about how large was your class at Baylor?
GG: The whole year, now we are talking about four classes really because Baylor was on the quarter system, probably had a total of 130 in all four classes, but of the group that I started with, probably half of them either flunked out or less, so there were not many of us left that started in November of 1947.
JP: And fairly soon after you came to Houston, you taught courses at U of H Law Center?
GG: Yes. I got a job in the fall of 1951. Dean A.A. White had heard of me because since I made the highest grade on the Bar exam, I spoke at the first mass swearing in ceremony ever held in the State of Texas, in May of 1950. He called me one day and asked me if I would be interested in teaching a course at night in the law school and back in those days, the present starting salary was 5333% less than the starting salary of today; so I could use the money, so I took a job in September of 1951, I guess, teaching a class at night in the Law School.
JP: And what was U of H Law School like then?
GG: Well, they had some very good students. Nearly all of the ones who went at night had daytime jobs, so they were not full-time law students like most of the ones you see today would be. But they were some fine students and I enjoy doing that work.
JP: South Texas Law was up and running?
GG: South Texas and was up and running and TSU was probably running, but I think it was very small.
JP: Very small. What was the firm like? What were the strengths of what we now call Fulbright and Jaworski when you came here? Who were the major clients?
GG: Well, the big strength of the firm, I think, was litigation back in those times. Actually, when I joined the firm, it was not departmentalized but most of the litigators did only litigation. The first clients the law firm ever had was Anderson Clayton and Company, which, as you probably know, was the biggest cotton company in the United States for 40 or 50 years, and the firm, I think, did all of the work for Anderson Clayton. There were several bank clients. The bank at that time was known as Second National Bank, which later became Bank of the Southwest area the firm also did significant work for Houston Bank and Trust Company and also First National Bank which merged with City National Bank in 1957 to become First City. The Houston Press, the newspaper, was one of the clients of the law firm back in those days and I think a fair amount of work was done for energy companies, some of the major oil companies, but when I joined the lawyer firm, we had zero tax lawyers and we had one securities lawyer, and those two, now you are talking 150 lawyers or more in this firm, so it was primarily a litigation firm when I came here.
JP: Later in life, you wrote the history of the firm. Could you recount for the tape the most important client came to be the creation of the firm?
GG: Well, Clarence Fulbright, the co-founder of the firm, had two degrees from Baylor and a law degree from the University of Chicago. He went to work for the firm of Andrews, Ball and Streetman in 1909, the firm now known as Andrews Kurth. The other co-founder was a man named John H. Crooker, Sr., who only went to the seventh grade in school. He lived in Mobile, Alabama, and his father died when he was probably 3 years old and his mother moved the family to Houston but Mr. Crooker had to quit school at age 12 and go to work for the railroad to help support his family. His wife and his mother-in-law helped him read law and he was able to pass the Bar exam to become Justice of the Peace and then District Attorney, but off to serve in World War I and when he came back, he and his but friend, Clarence Fulbright, who had then left the Andrews firm because of a conflict that had come up between Anderson Clayton and the railroads on freight rates and Frank Andrews, the head of the Andrews firm, told Monroe Anderson he was going to stick with the railroads because they got there first. So, Monroe Anderson set up Clarence of Fulbright In An individual practice for a short period of time, and then he and John Crooker established the firm on October 1, 1919, and the Anderson Clayton representation is what got the firm off the ground to begin with
JP: While you are on the topic of Fulbright and Crooker, your impressions of some of these famous older Houston lawyers who were in your firm before you were including Mr. Freeman and Mr. Jaworski and Colonel Bates? Or are
GG: Well, Mr. Crooker himself was a litigator. Of course, he had been District Attorney and most of what he did was trial work. John Freeman was a gentleman lawyer in the old, strict, traditional sense. He worked seven days a week. He came back from the University of Chicago Law School in 1912, and for the next 10 years or so was within another law firm here in town, and on January 1923, joined Fulbright and Crooker. They named the firm Fulbright, Crooker and Freeman. His primary areas of practice were bank law and real estate law. He was a great man, a great lawyer. He lived to be 93 years and 10 months old, and was a man who drew up the documents creating the M.D. Anderson Foundation. Mr. Anderson had never married. He was from Jackson, Tennessee. And when he tried to marry and propose marriage to his high school sweetheart, she advised him that he was no longer in her plans, so he decided if that is the way women were, he would go his own way and work as hard as he could in the Anderson Clayton Company. His brother, Frank, died fairly young so he made himself the foster father as an uncle of his nephews. So, he told Freeman and Bates in 1936 that he wanted to set up a foundation and there were going to be three trustees. He would be one, and Freeman and Bates would be the other two, and he made it clear to them that after his death, he was looking to them and their successors at their law firm to carry on the traditions of the M.D. Anderson Foundation and to do what they thought he might do if he were still alive. So, that is how the Anderson Foundation came about.
JP: While we are on the topic, let’s finish talking about the M.D. Anderson Foundation a bit, including your own later involvement. How did it stay important in your life and in the life of your firm?
GG: Well, of course, I did not know a whole lot about it as a young lawyer, and Leon Jaworski was added as the fourth trustee, I believe, in 1957, so that brought us with Freeman, Bates, and Jaworski as trustees from the law firm and there was always one outsider. When Mr. Anderson died in 1939, the following year, Horace Wilkins, his banker from the old State National Bank succeeded him and then Warren S. Bellows of the Bellows Construction Company succeeded Wilkins, and A.G. McNeece succeeded Bellows, and now Jack Trotter is our fourth trustee as a non-law firm person. We have always had one outsider on the board.
JP: When did Mr. Jaworski go on that board and when did you?
GG: Well, I think Leon went on the board in 1957. I went on in 1980, a couple of months after John Freeman passed away at age 93. So, he was on for 44 years and I had been on there for 27.
JP: Maybe you could speak for the tape a bit about Mr. Jaworski -- you talked about his ties to Waco -- about being in his firm and him as a lawyer and a man.
GG: Well, he was a great lawyer. He was also a fine person. He was a man that I was privileged to work for some when I first came with the firm. There was a policy back in those ancient times where young lawyers were supposed to rotate around the firm and do some work in nearly every department of the law firm. So, I was never actually assigned to work directly under him, although I did help him with two or three lawsuits early in my career. About two years after I came here, he, in fact, took over the running of the law firm from John Crooker, Sr., who had really run it from 1919 until 1952. So, I was aware the fact that he was running the law firm pretty much as head of the committee. The man under whom I worked for many years was Craft Theidman (sp?) who was Leon’s right-hand man in running the law firm from 1952 until Leon resigned from the firm to go become Watergate Special Prosecutor in November of 1973. So, when that happened, I had been secretary of the newly formed management committee which had only existed for one year. Leon was the chairman and Craft Theidman the vice-chairman. I figured I would be secretary of that committee maybe for the rest of my life but when Leon left to go to Watergate, he had to resign from the firm so Craft Theidman moved up to chairman of the firm and they moved me up from secretary to vice-chairman in November of 1973. When Leon came back from Watergate one year later, he expressed no interest in being involved in management of the firm, although he continued to be active around the office really until he died on December 9, 1982. Craft was approaching retirement age in 1979. He rarely could technically have served one more year but he decided to get out one year early, so I became managing partner in June of 1979, and held the job until January 1, 1992. 12-½ years.
JP: Did it have a major impact on the firm when Leon Jaworski went to Washington in such a public presence in Washington?
GG: It was great for the law firm. There was an incident which happened before that when Atty. General Robert Kennedy asked Leon to represent the government against Governor Ross Barnett of Mississippi who was defying a court order to integrate the schools in Mississippi which had been segregated and when that happened, a lot of unhappy people – some clients of the law firm contacted the firm and expressed great disappointment and regret that Leon would take that job, to begin with. So, there was a whole lot of fallout from that. There was less fallout about the Watergate thing although we did get some negative reports back from some of the clients and from some of the people in Houston, questioning whether he should have taken a job are not. But, of course, when he and his team succeeded in winning the case before the Supreme Court of the United States, which led to the resignation of President Nixon, it was, I think, a big stride forward for the law firm and he is, beyond question, the most significant individual that this law firm has ever had. He was a great lawyer and a fine man. A great leader.
JP: Why would Robert Kennedy had chosen him for the Barnett case?
GG: I suppose because he got recommendations from people who knew Leon and from leaders of the legal profession over the country that he would be a man would be a great lawyer and representative of the government and that he would not let any personal feelings or be subjected to any outside influences which would keep him from doing anything other than being an advocate for the position of the government in the Barnett case. So, I am pretty sure that is why that happened.
JP: It interests me from reading your book that your firm also was a leader in the region in the fight against the KKK in the 1920s. Is that kind of a tradition in your firm?
GG: It started out early. Mr. Crooker was at the forefront of that but Colonel Bates . . . incidentally, he never was really a colonel. He served in World War I and was wounded in France but he was a First Lieutenant. The way he got his name as colonel was his law school classmate, Dan Moody, ran for governor in the 1920s and asked Colonel Bates if he would be his Houston campaign manager. Bates agreed and after Moody was elected governor, he made Bates an honorary colonel to protect his militia. And so, from then on, he was called colonel. But babe as was district attorney in Nacogdoches and he came up for reelection in 1922 and the Ku Klux Klan opposed him and were successful and ran him out of office. So, he came down to Houston looking for a job and the firm hired him on January 1, 1923. That was 1 year before John Freeman joined the firm. And he stayed here the rest of his career.
JP: All right. Let’s talk a bit about your own practice within Fulbright and Jaworski. What did you come to specialize in and what were some of your major cases?
GG: Well, back in those days, we did not have really very many of the big tort cases you read about in the newspaper now. For many years after I came here, I am going to say for maybe as long as 15 years, the big as verdict in the history of Harris County was $260,000, and that was $200,000 for one plaintiff and $60,000 for another in the same case. So, most of my work when the firm became departmentalized was in defensive personal injury suits. I did a little general litigation and I have always done a little business practice along the way but I never did any securities work. I did a little bank work, a little savings and loan work. I even did a little real estate work and a little labor work. But mostly, I was a defense litigator during the early probably 15 or more years of my practice here.
JP: Am I remembering that you had a role in the Texaco Pennzoil case?
GG: Yes. The local office of Texaco recommended that we be hired to defend that suit, but the Texaco management in White Plains did not go along with that recommendation and hired the firm of Miller, Keaton, Bristow and Brown to defend the suit. The jury came in on November 19, 1985, I think, with that 10.53 billion dollar verdict, and five days later at 8:30 AM on Sunday which, I guess, would have been the 24th, I got a call from White Plains asking us if we would get in to try to help in the appeal of the case. So, we met with them a couple of days later and I agreed to get in on the case, and for about the next year and a half, I am not sure I remember anything that happened, either trying to run the law firm or trying to work on the appeal of the Pennzoil Texaco case, but apparently that is why I did for the next 18 months. A lawyer named David Boys who was then still with Cravath, Swaine and Moore in New York, was the primary appellate lawyer that had been hired to work on the appeal for Texaco but Jim Sales and Roger Townsend and I from our law firm here were working pretty well around the clock on it for quite a long time.
JP: How did that come out from your point of view? I know the verdict but . . .
GG: In my judgment, under the New York law which governed the case, Texaco did not owe Pennzoil a dime, but due to miraculously remarkably great lawyering by Joe Jamail and John Jeffers and Irv Terrell of Baker Botts and Harry Reasoner of Vinson Elkins and then Dean Mark Udoff of the University of Texas Law School, and Matt Dawson from Corsicana, Texas, they convinced the jury that Texaco did owe Pennzoil a whole lot of money and it stood up in court forcing Texaco to go into bankruptcy, and the case was ultimately settled for three billion dollars. But when we got in the case, we were $11 billion 330 million in the hole already, and history will not record this but the Court Of Appeals reduced the punitive damages in that case from $3 billion to $1 billion and that $2 billion remittiter in punitive damages is probably the largest in the history of world jurisprudence but nobody ever noticed that.
JP: You told a good story before we started about John Jeffers and his father, and your relationship to his father.
GG: Leroy Jeffers, a leading partner in Vinson Elkins, was John Jeffers’ father and there had been a lawsuit I think before Pennzoil Texaco where John and his Baker Botts partner, Ralph Kerrigan had sued Volkswagen in an antitrust case, and the defense lawyer was Leroy Jeffers, John’s father at Vinson Elkins. Ralph Kerrigan and John Jeffers got a big judgment against Volkswagen in that case, so we had a case of the son slaying the father in the courtroom.
JP: Yes, and I believe I read a memorial that you report of to John Jeffers when he died young just after the Texaco Pennzoil decision.
GG: I had a great respect for him. We, of course, tried to hire him when he got out of law school in 1967 I think at Texas Law School but he went with Baker Botts and was a fine lawyer and a fine young man. The
JP: Essentially worked himself to death just about.
GG: Well, I think he developed a malignancy that may or may not have had anything to do with work but he did work hard.
JP: Yes. In your era as managing partner of Fulbright Jaworski, you preside over a period of great change and a period of great growth in the law firm, culminating in what was then the largest merger of legal firms. Would you talk some about that, what you saw, what caused the growth, how the merger flowed from the growth of the firm?
GG: Well, when I came in, we had 270 lawyers and when I went out 12-1/2 years later, we had 640. Of course, the merger added about 90 lawyers or more overnight to the size of basically, Houston has been a major growth area for law firms since the end of World War II. So, I think all the Houston firms were growing significantly at that time. We began to expand in Texas. Just before I became managing partner the year before 1978, we opened an office in Austin which I had a little something to do with. My predecessor, Craft Theidman, was managing partner but he asked me what I thought about an Austin office because some of our clients for which we did agency work in Austin had raised the point that if we had an Austin office, it would probably be a little more efficient for us to do the state agency work out of Austin rather than commuting from Houston all the time. I knew that a very good lawyer from Beaumont named Pike Powers, who also was in the Legislature, had been talked to by some Austin firms and I got the impression that he might be interested in opening our office so I mentioned that to Craft and he said, “Talk to him.” So, I did and we made an agreement and Pike and George Henderson, an associate from Houston who moved to Austin, opened our Austin office in early 1978 as a 2 lawyer office. And then, in 1980, just after I had been managing partner for less than one year, the Labor Department requested that we open a San Antonio office because our Labor clients wanted us to get closer to some of their operations down in the Valley and Corpus Christi and other places, and they wanted to send a young partner named Philip Pfeiffer who had been a partner for a few months over there to run the office, and it sounded like a good idea to me but I told them we were not going to have any one lawyer offices in this law firm; they would have to send to two over there, not just one. So I spearheaded the opening of that San Antonio office. Then, about 1 ½ years or more than one year later, it seemed to me that we needed to have a presence in Dallas Fort Worth, that that would fulfill our Texas strategy. I did not really know how to go about it, and I was having lunch one day with a law firm client who was in the Taxes Obligation practice of mod work (??) and mentioned to me that he thought a Dallas firm called Dumas, Huggenen, Boofman and Morrow might be interested in a merger. All they did was bond work. They had one lawyer in San Antonio and five lawyers in Dallas. So I thought about it, talked to some of the people helping me run the law firm and we decided that we would at least look into it because we needed to be in Dallas Fort Worth. So we talked to them and wound up doing a merger towards the end of 1981. We celebrated 25th anniversary last year of the Dallas office. And so, we started up there with five bond lawyers in Dallas and I think we have 152 lawyers in Dallas now as a full service law firm. So that really culminated our Texas strategy. Not long after that, I appointed a long range planning committee to look into where we might go next and they came back with the unanimous report that the two places where we ought to be, where we were already were New York and Los Angeles. Steve Pfeiffer, who is now the head of our firm, was a graduate of Weslayan University, undergraduate, but before he became a Rhodes scholar at Oxford and a Yale Law School graduate, and was having a meeting with Jim Dreyfuss, a fellow Weslayan graduate, one day. Jim was a partner at Revis and McGrath, a New York firm with a Los Angeles office. Steve said, “You know, we are thinking about a presence in New York and Los Angeles,” and Dreyfuss responded that their firm had just had a partner’s meeting and decided to stay independent, so he did not think that there would be any reason for the two firms to talk, but somehow, that conversation started a discussion back and forth and some of the partners at Revis and McGrath agreed to me with us at the Metropolitan Club one night for dinner to talk about a get together and they seemed to think that maybe we weren’t the total country hicks that some people thought we were, and at least they would be willing to talk to us. So that is how the merger got started and I believe it was consummated on January 1, 1989.
JP: How larger were they in each of the cities? Do you remember?
GG: Well, their total was right about 90 or 95, and my guess is that the Los Angeles office was not over 15, so I would say 75 in New York. Primarily a corporate securities law business practice firm with not a whole lot of litigators which suited us because we always have had a fairly dominant litigation practice in Fulbright here in Texas primarily.
JP: And you also had always had a presence in D.C. Did you still have a substantial D.C. office in that period?
GG: Our Washington office was not all that big. Clarence Fulbright is the guy that set it up and most of his work was always in Washington. At the time he died in 1940, he had built that office up to 13 lawyers, which was the largest office in Washington of a non-Washington based law firm, but when he died and with World War II coming on, the office shrank down to where probably in the late 1940s, we probably had two lawyers there for quite some time. And the big expansion in Washington did not take place until a long time thereafter.
JP: While you were managing partner, were their overseas offices at all?
GG: Before I became managing partner, I helped set up our London office in 1972, and the office remained small until recently. It is now, I think, up to about 30. But it remained small until about three or four years ago. We had an arrangement with a lawyer in Zurich, Switzerland that was not a merger when I was managing partner, but that did not last very long. Then, in the 1980s, I think sometime around 1986, we made an arrangement with the Calgary firm of Finerty, Robertson, Frazier and Hatch, not of a merger but of just sort of a work together arrangement where each firm would respect the opportunity of others where each practiced. That arrangement and is still in existence and the Finerty, Robertson, Frazier and Hatch firm has been through 3 or 4 mergers and is now a very large Canadian firm with multiple offices and we still do work with them. And just before I went out as managing partner, we did open up in Hong Kong in 1990, but the other overseas offices such as the one we now have in Munich, the one we now have in Riyadh and the one we now have in Dubai all came about after my tenure as managing partner. We now have 16 offices worldwide. The latest one is Beijing, we opened in China last year
JP: In the case of Calgary and some of the other cities you named, the logic would be following energy related business?
GG: Yes, Calgary is very much energy related just like a Houston is and that was, I think, one of the reasons that Francis Saville (sp?) who was the managing partner of the Finerty firm contacted me about showing any interest in even working together. And the practices of two firms were very similar.
JP: Did you have mutual clients?
GG: Going in, I am not sure that we did. We developed that we did but I do not think that we did at the outset.
JP: I can see why a law firm would grow with Houston and the post World War II boom, and I am just sitting here talking to you and a light bulb goes off that you would have also been among the few businesses in Houston that might have grown during the bust as your clients got in trouble. Was the oil bust of the 1980s good or bad for you?
GG: Well, it was during the 1980s that we went to 270 and 640, so I guess that answers the question, and, in fact, we took a little heat from non-lawyers and clients, you know, that law firms did not seem to notice the drop down in the 1980s like regular normal people did. So, we did real well through that whole period.
JP: Was Bank of the Southwest still your client early in that period?
GG: Yes, it remained our client until it became M Bank Houston because of the merger with Mercantile Bank in Dallas, and not long after the merger, we pretty well lost the representation of that banking organization. I am not really aware of the extent to which a whole lot of legal work is now done by Houston law firms for banks. I am not up-to-date on that anymore but at one time, Bank of the Southwest was a major client of this law firm and when it became a bank holding company, Southwest Bancshares, one of our lawyers did the legal work, setting up the holding company and later left us to become general counsel of Southwest Bancshares. So, in the earlier history of the firm, it was a major client of the law firm.
JP: So, that is one other cost of the oil bust – we lost all of our local banks and our local law firms lost that long historic tie the?
GG: That is right, yes.
JP: Was your firm involved at all in any of the work out of the debts of the banks or of individual energy-related companies?
GG: Yes. Our bankruptcy department grew quite a bit during that period time and I am sure that we were involved in a lot of the work outs. Fortunately, I think we pretty well escaped the aggressiveness of some of the Washington agencies investigating what happened to the banks and why they went under, and there were some pretty strong measures taken against some of the banks, but I think we pretty well escaped those.
JP: All right, I would like to back up a little bit. We are still going forward in time but backing up and finishing your comments on the merger. As managing partner of the bigger firm, you must have had quite a few real challenges trying to put law firms together of that size.
GG: It actually worked out very well. We started out with the name of Fulbright and Jaworski and Revas McGrath, but that only lasted 3 years and the year I stepped out as managing partner, we were contacted by the New York lawyers who said, “It is time to do away with the dual name and let’s just call the whole thing Fulbright and Jaworski from now on.” So, that was done in 1992. My successor, Gus Blackshear, had become managing partner by then.
JP: What about the financial problems of the peculiar contract arrangement of partners of law firms to the firms? That would seem very difficult to work out.
GG: Well, we had two very smart lawyers that mostly got into that before the merger. Uriel Dutton was the head man. He was vice-chairman of the firm under me my entire time along with Charlie Hall of the executive committee, and our administrative partner, Jack Vaughn, who was a partner at Deloitte, Haskins and Sells as the firm was once known as, an expert in financial matters, and they got into all the complication about partner compensation, retirement plans, and, you know, firm cultures and traditions and that sort of thing. So, it actually went very smoothly.
JP: Did any of the New York lawyers leave?
GG: Not many New York lawyers did, but in Los Angeles, we had a substantial turnover, which was not a surprise because it was a fairly small office and I do not think very many of the lawyers there were in favor of the merger. I think the New York controlling lawyers in the firm were the ones that wanted the merger on their end.
JP: Was the merger well received here in Houston?
GG: Yes. It was not unanimous although a substantial number of the partners support it far more than the majority. There were some we did not see the wisdom of it but a rather large percentage of those have come to be sense and pointed out that, by golly, maybe I was right about that merger after all.
JP: It is good to be right every once in awhile.
GG: Luck beats skill, you know, sometimes.
JP: The other thing I think we would do well to talk about more is your role in M.D. Anderson Foundation and in the Texas Medical Center and the Baylor College of Medicine – but owe a big part of your life.
GG: All right. Baylor College of Medicine I will deal with first. I started doing legal work in the 1960s and at that time, the Baylor University Board of Regents or Board of Trustees – I am not sure what the name was at that time because the name was changed, but the governing body of Baylor in Waco was in control of the medical school. As a matter of policy, the Baylor board did not want to accept any federal grants because they did not want the government involved in the business of running Baylor, but the medical school greatly needed those grants to compete with other medical schools throughout the country, so in agreement was reached in 1969 to change the name from Baylor University College of Medicine to Baylor College of Medicine and three-fourths of the trustees are now elected by the local group. The Baylor born in Waco retained the right to elect one-fourth of the board but, as a result of that, control of the medical school was transferred from Waco to Houston where it still is now. In the spring of 1977, the then president of Baylor, Abner McCall, who had been the dean when I was a law student there, asked me if I would go on the board of Baylor College of Medicine. I was serving as president of the State Bar at that time, and told them I would so that is when I went on the board which was 30 years ago this past spring. I am now an emeritus trustee and have been for the last quite a few years. I go to the meetings but I do not have a vote, but I am strongly interested in what goes on out there and as you may know, Baylor and Methodist split up a year or two ago and Baylor has now embarked on building its own hospital in its own new clinic building and has a new future ahead of it and I think we will do well. The M.D. Anderson Foundation situation came about when John Freeman passed away in August of 1980. The firm had already pretty well established a policy of replacing law firm trustees with successors from the law firm and I was approached and asked if I would be willing to become a trustee of the M.D. Anderson Foundation in 1980 and I agreed and went on the board probably that fall and have been on there ever since. A.G. McNeese preceded me as president of the M.D. Anderson and when he passed away in 1990, I was the then senior other than McNeese and that is when I became president and I have been president for the last 17 years. It is a well-kept secret that the M.D. Anderson Foundation actually created the Texas Medical Center. The history behind that briefly is this: Mr. Anderson died in 1939. He was succeeded by Horace Wilkins, his banker from the State National Bank. In 1941, the Texas Legislature passed a statute creating the first cancer hospital in the state of Texas but they did not have enough money to do it. Freeman and Bates primarily had been wondering what to do in the 2 years since Mr. Anderson had died and they spotted 134 acres of land out here across Main Street from Rice, and the only building on the property was the original Hermann Hospital, so they thought that might be a good location for a medical center and maybe this will cancer hospital could be put in that medical center. So, they went to Louis Cutrer, the city attorney who later became mayor of Houston, and he said, “You can’t buy that land. We impliedly acquired it in the city for park purposes.” And they said, “Louis, you’ve got Hermann Park, a huge park right there next to it.” And he said, “In spite of that, the only way you can ever get that land is if you will finance a city election authorizing you to buy it and if you will pay for the election.” So, Freeman Bates said, “We will do that.” So, they called an election. 991 people voted, 941 voted in favor of the Anderson Foundation buying the land and 50 voted against it. So, in April of 1944, the Anderson Foundation acquire the 134 acres from the City of Houston for $318,000, created an entity called The Texas Medical Center, Incorporated, and donated the 134 acres to the Texas Medical Center, Incorporated. And that is how the Texas Medical Center got started. The reason the name M.D. Anderson is on the Cancer Center is that Freeman and Bates got the idea of approaching the governor who was probably Coke Stevenson at the time and the president of University of Texas, a man named Homer Rainey, and saying to them that, “If you will locate that cancer center in this Texas Medical Center we are going to buy and build, and if you will put the name M.D. Anderson on it, we will finance whatever needs to be done to get the thing created, and we will provide you with whatever space you need in this new medical center that we are going to build.” So, that is how the M.D. Anderson name got on the Cancer Center. In the meantime, Freeman and Bates went to Rice and purchased from Rice James Addison Baker, III’s grandfather’s former home, Captain Baker, at Baldwin and Hadley. And that is where the first cancer center started. The patients were put in hutments bought from the U.S. government down in Galveston and moved from Galveston to Houston. And that is where the cancer center was until the building was built in what is now the Texas Medical Center, and that is why the name M.D. Anderson is on the cancer center. It is still there.
JP: It is kind of a classic Houston story of people getting something done when they saw the reason to do it, isn’t it?
GG: That’s right.
JP: How important has M.D. Anderson Foundation been in the subsequent history of the Medical Center?
GG: Well, I have been on 3 boards out there: the cancer center board and the Texas Medical Center board, and I am an emeritus trustee at Baylor, and the present trustees that we are now board members, we had to convert from a trust to a charitable corporation because there was a little conflict between the state and the Federal law. Mr. Anderson had required a provision in the trust agreement that only income could be used for grants. The Federal government came along and said you are going to give away 5%, so in the years where we did not earn 5%, the way we were able to stay out of Federal and state jail is that we had some collected undistributed income from prior years that we could use to supplement the grants, but we were running out of that, so we had to go to the probate court and change from a trust to a charitable corporation and get an outside provision that in order to comply with the law, that if we had to make some part of the distributions out of principle, we could do it. Fortunately, we have not had to because our income has increased to such an extent that we are always earning more than 5% every year now
JP: Which institutions have you been most supportive of grew time in the Medical Center? Still M.D. Anderson and Baylor or others? Oh
GG: Well, I do not think there is one out there we have not supported but, of course, the biggest thing was the donation of the Medical Center land to the Texas Medical Center, Incorporated. That entity now makes enough money that we have not been called on to support it much lately but we have given a very large amount of money to the cancer center, to Baylor College of Medicine, to the Methodist Hospital, St. Luke’s Hospital, the Texas Women’s University, and almost every entity in the Medical Center. So, we realize that it is incumbent on us to carry on the tradition of supporting all of the entities in the Texas Medical Center. I do not have in my head right now a quantitative total of grants in the Center but it would not surprise me will if it was $50 million or more. We started with $19 million when Mr. Anderson died. We have given away about $220 [million??] and we’ve got about $160 [million?] left. So, we are not a large foundation if you’re talking about the likes of Houston in diameter around but we have hung in there fairly well over time. We give a lot of money to education - the small clinics outside of the Medical Center, healthcare, we are big on supporting healthcare. And the terms of Mr. Anderson’s original trust agreement are sufficient that we could really support almost anything that has a 501(c)(3) tax exemption from the federal government.
JP: So, in a sense, it is the impact of cotton reaching far into the future from M.D. Anderson?
GG: You can trace it all the way back to him.
JP: People that have been particularly important in your estimation in the evolution of the Texas Medical Center, people like Dr. Butler and others?
GG: Well, you can go back before that. Baylor University College of Medicine moved to Houston back in the 1940s because, while it was in Dallas, the Dallas Morning News and the Dallas Citizens Council which pretty well has run that city, I think, for many, many years, began to complain to the Baylor board in Waco that it was not doing enough to support that medical school in Dallas, and if the board did not shape up, they would see to it that another medical school would come in in Dallas and they would support it and not Baylor. So, Freeman and Bates were contacted by a couple of the members of the Baylor board in Waco the and Freeman and Bates but were told that they did not like the way the situation was going in Dallas and that they had heard that Freeman and Bates were trying to establish a medical center, and would they be receptive to moving the medical school from Dallas to Houston? Freeman and Bates agreed to do it and probably the most significant thing that happened at that time was the late, great, H.R. Cullen agreed to come in with one million dollars to help facilitate the move of that medical school and, and as you probably know because of your expertise in Houston history, you can trace Mr. Cullen’s money almost everywhere in this town, and he was a very significant factor in the growth of the Medical Center and the City of Houston.
JP: All right. When you look at the Medical Center and think of your own contributions to its growth or the way your life has been tied to it, what do you see as its importance in the history of Houston in general?
GG: Well, I do not think the Medical Center really gets the credit it deserves. It is really a city within a city. It probably employs 75,000 people. It probably sees several million patients a year. Has 46 member institutions. Has 10 or 12 degree granting institutions. It is more than twice the size of any medical center anywhere in the world. In my judgment, it is as responsible for the growth and development of Houston as anything else. Of course, you could point to the Houston port and point to NASA and other things but the Medical Center is right up there.
JP: It sure is. Do you ever regret not going to Dallas when you got out of law school?
GG: You know, I have stopped thinking about that! Things have worked out really well for my family and me and we have done a whole lot better than I ever thought we would, so I had never gotten into the Houston vs. Dallas thing, you know, that people like to talk about. Dallas is a great city with a lot of wonderful people in it, and I still remember growing up – I thought it was the end of the rainbow. But now, I have decided that Houston is at least as significant a city as Dallas.
JP: Yes, the other end of the rainbow maybe.
GG: Yes, we’ve got our share of the rainbow right down here.
JP: What is it about this city . . . we are talking about your observations about the city of Houston, having spent a lifetime here, a professional lifetime –- how it helped you and just your observations about the city.
GG: Houston is a wide open city. You do not have to be from here. You do not have to have ever been here before in your life. You do not have to know anybody here. You can come in from anywhere and start from scratch and the world is your oyster. It is a wide open city and a lot of fine people live here, and there is no limit to the opportunity that the city of Houston affords anybody who wants to come here.
JP: You lived through an amazing period in the city’s history. Do you see that extending into the future, the same kind of growth and dynamism?
GG: I do not see any limit to it. There has been some feeling expressed by some people that we do not have enough Ben Loves or H.R. Cullens or Jesse H. Jones . . . let’s mention his name because for the first 50 years of the 20th century, Jesse H. Jones was the most significant Houstonian. He is the one that did more than anybody to get the Port. He is the one that got the Democratic Convention here in 1928. He is the one in the midst of the Depression that called every bank in town and said, “I want you to bring to my office, 10 days from today, every bad loan on your books,” and he collected them all and he reviewed them all and he called a meeting of the bank leaders and he passed out the bad loans to everybody there, every bank took its prorata part because Mr. Jones said that is what they ought to do and that is what saved the banks of Houston during the Depression. A great man.
JP: Is that the kind of what you are seeing as the spirit of Houston?
GG: The spirit of Houston.
JP: And you see that going into the future?
GG: It is going to keep going. We need more Ben Loves and Jesse Jones and H.R. Cullens and J.S. Abercrombies.
JP: Gibson Gayles?
GG: No, I would not put me in that list. I still refer to myself as a simple ordinary Texas cowboy, country lawyer, and that is all you will ever get me to claim.
JP: All right, well, we thank you for your time.
GG: Thank you for coming.