Editor: One of the things that seems to set Texas apart from other states is its ability to weather the peaks and valleys of a turbulent economy. What does Texas offer that allows businesses to thrive even in a downturn?
Conner: Texas is a very good environment for business overall. We have a low tax structure, a low cost of living, and an excellent labor force. These factors have led to significant population and business growth, which are projected to continue over the next several decades. Although Texas's economy was originally built around agriculture and energy, we now have a much more diverse economy that includes financial services, technology, telecom, and transportation with a continuing focus on energy and clean tech. We have great multinational companies headquartered here that distribute to global markets, so their revenue base is not dependent on one region. Texas is the leading exporter among all states and so benefits from expansion into foreign markets. Finally, we have a healthy combination of Fortune 500 companies, strong middle-market companies, and entrepreneurs, whom we are happy and honored to serve.
Boone: Texas is headquarters for corporate America, not only U.S. companies but international companies. Texas is number one in Fortune 500 headquartered companies and more importantly, number one for Fortune 1000 headquartered companies, which include some of the middle market group. This factor has made for optimum business for law firms.
Editor: Haynes and Boone has often flourished in tough times. How has the firm been able to turn significant events in the economy and industry into opportunities?
Boone: We have experienced three recessions in the recent past: in '72 when our firm had only four lawyers, but also in '82 and then '90 to '91. From all those experiences we learned lessons about how to deal with adversity and how to improve our competitive position. Those lessons have made a huge difference in the way we have managed the firm because we have focused on achieving stability internally and externally by taking into account risk management measures for business cycles. We are a very diversified law firm in terms of our practice areas, our client base and industry specialties. We also are very conscious of change in the marketplace, developing a firm culture that can quickly adapt to change. By building in a culture of change we can look for opportunity in downturns to improve our competitive position. There is always a flight to quality in down economic times - clients move to stable law firms away from unstable ones, good lawyers move away from unstable law firms. We have always focused on maintaining internal stability in our firm from both an economic, cultural and business client basis.
Editor: How do you leverage your strong Texas presence nationally and internationally to the advantage of the firm and its clients?
Conner: From a law firm standpoint, our strategy starts and ends with our clients. We are very fortunate that the Texas client base is national and international in its scope, including clients involved in manufacturing, investing, acquiring businesses, and distributing goods, technology and services on a global basis. We believe that the scope of our clients' businesses both requires and supports the firm's expansion nationally and internationally. Our offices on the East and West coasts are closely linked with our Texas offices. We also have a very strong presence in Latin America as well as an office in Moscow. As a result of our longstanding relationship with clients, we are often called upon to help them with dispute resolution, both domestically and globally.
Editor: How does Texas fit into a global economy? What advantages are there for Texas-based businesses looking for opportunities overseas?
Conner: Texas companies tend to be major global players with substantial inbound and outbound commerce. On the outbound side, Texas companies export a number of essential goods and services, including energy and technology. The favorable Texas business climate supports their expansion. And they also have the experience, management bench strength, and financial resources needed for global growth. In addition, Texas has long been an important destination for inbound foreign investment and also the U.S. headquarters for multinational companies.
Editor: As the nation struggles to regain its economic footing, what trends, opportunities and risks do you see on the horizon for Texas-based businesses? How will Haynes and Boone help its clients adapt and respond?
Conner: We see tremendous opportunity for a number of our clients coming out of this very difficult recession - companies with good skill sets, capital, and appetites for expansion are poised to take advantage of these opportunities. Industry segments such as real estate, technology and energy will all be active. We have a big investment fund community, with a lot of dry powder that they need to put to work. In addition there is a strong entrepreneurial spirit in the state, so we expect to see a number of businesses emerge as strong market players in niches that are going to be in demand such as alternative energy and clean tech. As a law firm we strive to be trusted advisors to our clients, to help them navigate what will continue to be a very challenging environment. Our experience allows us to give input on market factors, deal structures, and alternatives for expansion.
Editor: What about financings? Are the banks now opening their coffers a bit more?
Conner: For the most part, Texas financial institutions are in very good shape, and "open for business." We are seeing lenders compete, including in pricing, for strong credits. That said, given the recession that we have come through, businesses are still fairly cautious about expansion, and so the demand for borrowing has not returned to pre-recession levels. Also, our lending clients are digesting the effects of the new federal legislation and mountain of regulations to follow. We do think that the stabilization of the financial services industry is tremendously important to the rejuvenation of the economy.
Editor: Haynes and Boone puts a significant emphasis on building and maintaining a strong corporate culture. What makes the firm's culture unique? What are the strategic advantages of making culture a priority?
Boone: We think a strong, healthy culture makes a huge difference in the way any organization operates. There are three components to understanding our culture. Our number one objective in formulating our culture is creating teamwork in a collaborative work environment. Although this philosophy may exclude young type A lawyers, it has been proven over and over again that a work environment built around collaboration and teamwork is much more productive than any other type of environment. The theories of "eat what you kill," internal fighting, and emphasis on ego undermine teamwork and undermine productivity. Secondly, without question it is better for clients to have law firms that operate on a teamwork culture because they get the right allocation of resources among lawyers and can team well in partnership with law firms whose culture is built around teamwork. It is absolutely imperative that there be a seamless relationship between the general counsel's staff, the executive leadership of a company and their outside law firms. Our firm's teamwork culture has definitely given us an added benefit and an enabler to achieve what clients want. Thirdly, stability is absolutely key for law firms. Firms that are internally stable through their culture go a long way in being able to be more productive in serving their clients.
Editor: This year marks Haynes and Boone's 40th anniversary. Looking back, what are the most valuable lessons you've learned?
Boone: We have recognized several extremely valuable lessons. The one just discussed is, of course, teamwork. The second is that we have recognized the importance of managing ourselves like a business, an integral part of our culture. The third lesson is recognizing that change is inevitable. Firms that are able to deal with change do well and have longevity. We continually focus on identifying future changes and then prepare ourselves to adapt as quickly as possible to gain a competitive advantage with regard to those changes. In terms of keeping an eye on change, we have to stay focused on our clients. We are driven by our clients' needs and what they expect from us. The final lesson is that we take nothing for granted. In the law you have to get up every morning and prove to the world that you're good at what you do and you are able to give the best representation and handle the most sophisticated transactions. So we take nothing for granted - we have to strive for excellence everyday.
Editor: What is in store for the firm's next 40 years?
Conner: We've grown from two lawyers in one office in the 1970s to over 500 lawyers today in 12 offices. Twenty-five percent of our lawyers are outside the State of Texas. Over the next 40 years we will leverage the client base into an even stronger national and international presence. In order to accomplish this we will continue to elevate our corporate finance, litigation, bankruptcy, and IP practices among others. I think we will continue to be a top advisor to businesses in a number of industries including energy, technology, telecom, financial services, transportation, investment funds, and real estate. We will continue to maintain our operating principles, our philosophies and our culture which we think make Haynes and Boone such a unique place to work.
Editor: Do you feel you want to prognosticate 40 years out?
Conner: That is difficult. One thing we can be sure of is there are going to be very significant changes in the business world, including law firms. There will be huge changes in our practice areas, staffing models, pricing, marketing, and the delivery of legal services. Besides having stability and sound operating principles, it is important for us as a firm to be alert to major business trends and open to change, and be ready to make the kinds adjustments that are going to be required in a changing business environment. The only other concrete prediction is that the business world will only continue to be more and more global, and law firms will continue to evolve in that direction as well.
Boone: All we can say about looking out long term is it will be exciting and challenging because of the change factor but that is what we thrive on. This firm likes to compete as evidenced by our growth from two to 500-plus lawyers. We like the thrill of victory and being able to accept the challenges of out-working and out-thinking the competition. We plan to get on the field and be ready for the kick- off for the next 40 years so that we can compete and show that we can become a better firm.