Editor: Please tell our readers about your professional experience. What drew you to Atlanta and to King & Spalding?
Stephenson: Being a native Georgian, I naturally gravitated to Atlanta after my graduation from the University of Chicago Law School in 1971 and have practiced in Atlanta since then. For most of my career, my practice has focused on commercial real estate, and, because of its reputation in real estate, I joined King & Spalding as a lateral partner in 1985. I served for several years as practice group leader of our real estate team and in 2001 was appointed Office Managing Partner of our Atlanta office, which is the headquarters office for the firm.
Editor: Please tell our readers how the Southeast Region has fared during this economic crisis.
Stephenson: It has been difficult, and Georgia in particular has been challenged through this downturn. The state's unemployment rate in January reached 10.4 percent, the highest in recent memory. Our law firm has not been immune to the recession, but we came out of 2009 stronger than before. Demand for our legal services has actually been on the rise through 2009, and we're looking forward to 2010 as an even stronger year. However, Atlanta and the Southeast have suffered, and we are anticipating a slow recovery. Atlanta is very much a real estate and construction city, with much of our economy based on those two industries that are not forecasted to recover until 2011. The key will be a return to employment growth.
Editor: Healthcare reform is on everyone's mind. You just held your 19th Annual King & Spalding Health Law and Policy Forum. Please tell our readers about it.
Stephenson: King & Spalding has had a healthcare practice since the 1970s that was greatly expanded in 1985 with the addition of a lateral group of lawyers from another Atlanta firm. In 2006 the firm adopted as strategic initiatives both healthcare and pharma, and growth in these areas has been incredible. In 2007 we added two lateral partners in Atlanta who really had a very strong healthcare provider client base. Finally, in 2008 we added 13 healthcare lawyers in our Houston and Washington DC offices, which put King & Spalding in a leadership position in the healthcare field. The American Health Lawyers Association now ranks us as having the largest healthcare practice in the United States. We represent healthcare providers and focus on regulatory, Medicaid and Medicare reimbursement issues and False Claims Act litigation. The King & Spalding Health Law and Policy Forum is in its 19th year, and attracted 275 representatives from the healthcare industry. It has become truly a national forum with attendees representing hospital groups, physician groups, other healthcare providers and consultants to the industry. The Forum featured outstanding speakers, including U.S. Senator Johnny Isakson, who has close involvement in the current healthcare debate in Washington. The focus of this year's Forum was on electronic health records, Medicare reimbursement, fraud and abuse and healthcare reform.
Editor: Would you tell our readers about the success of the special business court in Georgia to handle complex business litigation?
Stephenson: The court has been very well received by our clients and by the bar. It was initiated by our Supreme Court rule change in 2005, but has been implemented so far only in Fulton County (Atlanta). Gwinnett County, also in the metro area, has recently begun the creation of its own business court. In Fulton County, three judges, two seniors and one active, have been designated. The most important change is that criminal cases are eliminated from these judges' trial calendars, so they are able to focus strictly on civil litigation. Jurisdiction of the business court includes only claims of at least $1 million, generally arising under the Georgia Securities Act or the corporate, partnership and LLC statutes and other significant commercial disputes. Any party to civil action may move for the transfer of the case to the business court, and a panel of judges reviews each petition to determine the appropriateness of the case for the business court. From 2007 through December of last year, a party in 116 cases moved to transfer the case to the business court and 76 requests were granted, a strong acceptance rate. The current docket is 42 cases, and my litigation partners tell me the great advantages are that the judges become more sophisticated and experienced in dealing with complex business issues, and they are not worried about the criminal calendar interfering with their ability to make decisions. The result is a much faster process, which reduces the overall cost and expense of litigation.
Editor: Is the right to demand a jury trial preserved?
Stephenson: Yes, it does preserve juries. It'll be interesting to see how it is received in Gwinnett County, which is a more suburban area but also has significant corporate headquarters. There are only 15 states with special business courts; ours was modeled after the North Carolina business court, which I think began in 1995.
Editor: Governor Perdue proposed comprehensive tort reform. Please tell our readers about the status of these proposals.
Stephenson: Our governor introduced tort reform legislation in 2005, and it has had a positive effect on business tort litigation, creating a friendlier environment for business.It is probably the most significant change related to the elimination of joint and several liability in multi-defendant litigation, as well as the adoption of the Daubert standard for expert testimony. In addition, in the medical malpractice area, Georgia adopted a gross negligence standard for emergency room doctors in order to maintain a malpractice claim and also imposed a cap on non-economic damages in medical malpractice cases - the constitutionality of the latter issue being currently before our Supreme Court. Finally, in asbestos claims litigation, a party must be able to demonstrate actual injury rather than just the possibility of future injury. The governor continues to make efforts for additional reform and in 2009 introduced legislation, which has not yet been adopted, that would shield pharma manufacturers from claims if the FDA has approved the drug.
Editor: King & Spalding has a reputation for having one of the best programs for new lawyers and continuing legal education for members of its firm. Please tell our readers about this program.
Stephenson: We recognized in the late eighties the need to educate our lawyers and train them not only in the substance of the law, but also in how we practice it, to complement the more theoretical training of law school and meet the need for continuing development during their careers. More recently, we added an integration component for our lateral partners and lawyers as they join the firm. We have a partner whose full-time job is to lead our professional development initiatives. We recently hosted a new associate training program where we brought all of our new entry-level lawyers from around the world to Atlanta for a two-day session, much of which related to client expectations and the firm itself, helping these new lawyers understand King & Spalding's culture and how we practice law. We have a full-time development staff running what we call K&S University, a certified CLE provider in four states. In 2009, we offered over 200 CLE programs to our lawyers and clients.
Editor: Your firm has developed an international presence in record time, with six of your 14 offices in Europe and the Middle East. How were you able to accomplish that and how were you able to hire top-quality talent to staff the offices?
Stephenson: There was recognition that to attract and keep the best and the brightest lawyers we needed to provide them with a platform from which they could serve their clients wherever the clients were. There was also the recognition that our 2006 geographic footprint really didn't allow us to do so in a number of different jurisdictions, so there was a combination of both a strategic perception from the top and a demand from our individual partners in various jurisdictions. I think that is very appealing to lawyers in other firms and has aided our ability to attract great talent. As an example, international arbitration was a growing practice area in which we had some traction in our Houston and New York offices, but there was a demonstrated need to have a presence in Paris at the seat of the ICC international court of arbitration, so a group of partners identified those lawyers in Paris that we needed to bring to the firm. Similarly, a group of our partners in energy and Islamic finance recognized a need for an on-the-ground presence in the Middle East that resulted in our offices in Dubai and Abu Dhabi and an affiliated office in Riyadh, Saudi Arabia. King & Spalding enjoys a great reputation, so we were able to attract lateral partners and lawyers from other firms. Compensation is always an issue for lateral partners, but that is not what really attracts people to us. We're celebrating 125 years of legal service, and one of the true cornerstones of our culture has been our collegial nature.
Editor: Was the Islamic finance something that grew out of your London office?
Stephenson: We've been doing business in the Gulf region for more than 20 years. When we expanded our New York office in 1992, one of the lawyers who joined us was Isam Salah. Isam was a finance lawyer focusing on traditional project, not Islamic, finance. As the demand for Islamic finance lawyers grew, Isam joined forces with our partner Jawad Ali in London to expand our practice in this area. Jawad has just been named office managing partner for our Middle Eastern offices, and Islamic finance has become an amazing growth area for the firm.
Editor: Turning to your personal specialty, real estate, do you see business improving and more capital investment in the Southeast?
Stephenson: Once employment turns around, probably in 2011, I think you will see real estate spring back. People have been saying for 18 months that there is a lot of money on the sidelines waiting to do deals, and we're beginning to see non-distress transactions occur. There is more activity internationally. We have real estate lawyers in Abu Dhabi, Atlanta, Frankfurt, Houston, New York and San Francisco and clients that are active in Latin America, with our lawyers actually closing transactions there. So the firm's real estate footprint is certainly growing, but the key to turnaround in the real estate capital markets will be employment growth.
Editor: Each office has a managing partner, but is there someone who acts as the chair of the firm?
Stephenson: Yes. Robert D. Hays, Jr., was elected chairman in 2006. We manage ourselves through practice groups that in many cases are cross-office with a single practice leader. As an example, Scott Arnold leads our real estate practice and splits his time between Atlanta and New York. Another example is Islamic finance where we have lawyers in New York, London and the Middle East, but they have a single practice group leader. We do have office managing partners, but they play a slightly different role, and our day-to-day management really occurs through the practice groups.