Editor: Please tell our readers about your professional experience. What drew you to Atlanta?
Stephenson: I was born in Georgia and attended Davidson College in North Carolina and law school at the University of Chicago. When I was looking for employment opportunities as a law student, I naturally looked in the South, at cities such as Washington and Atlanta. The “capital of the new South” at that time, Atlanta was very attractive to law students from all over the country. In comparing Atlanta and Washington, I like many law students, viewed Washington (probably incorrectly) as having primarily a regulatory and lobbying practice, whereas Atlanta offered a broader business practice that attracted me, so I located to Atlanta, which was really home. Atlanta is a real estate town, so I quickly became involved in a commercial real estate practice, and for the past 40 years that has been my primary focus.
Editor: Tell us about your role as office managing partner.
Stephenson: The role of office managing partner differs from office to office. We do have a job description, but the function varies depending upon the size of the office and the cities in which they are located. Here in Atlanta, where King & Spalding was founded, we have a concentration of the firm’s administrative staff, finance, facilities, HR and a lot of lawyers. My role is one of coach and cheerleader: I get involved in some personnel issues and have been heavily involved in most of our real estate decisions since 2001, when I became managing partner of the office. In 2006 we relocated from our downtown office to a new office in midtown Atlanta, and that occupied a great deal of my time. I also serve as the public face of the Atlanta office and am called upon to represent the firm in events around the city.
Editor: In our interview last year, you updated us on economic conditions in Atlanta. What is the current state of the economy?
Stephenson: Things are improving in Atlanta. Our unemployment rate is down from this time last year, when we were over 10 percent. We are still above the national average, but the unemployment rate is now 9.2 percent. Substantial employment gains have been made recently in professional and business services, retail, healthcare and manufacturing. I mentioned that Atlanta is a real estate town, which involves a lot of construction, and those are the jobs that we lost during the recession of 2007/2008. It will take some time to build back, but generally the economy is improving and people are optimistic.
Editor: I understand there are innovative programs to train workers in Georgia.
Stephenson: The KIA manufacturing facility located in Georgia a couple of years ago, and Georgia’s Quickstart Program was one of the main attractions for KIA. Over the past 20 years Georgia, like many states in the Southeast, has lost numerous jobs in the textile industry to overseas competition, and those workers have needed retraining, so Quickstart was developed. I read a report last year that the Quickstart program had worked with over 220 employers and trained over 11,000 workers, so it has been a very successful program and has helped to attract new companies to Georgia.
Editor: What steps have you been taking in Georgia to improve its business climate?
Stephenson: The Georgia Chamber has a very active legislative agenda. In the legislative session that recently ended, the Chamber focused on education, the environment, healthcare, legal reform and transportation. One of the biggest issues facing Georgia this year is our local option sales tax, which would be adopted statewide by region. In the metro region it would add over the 10-year life of the tax $8.5 billion to fund transportation projects. Not only would that be a great boost to the economy, it would help us address traffic issues in the Atlanta area. Both the Georgia Chamber and the Metro Atlanta Chamber are promoting the adoption of this local option sales tax.
Editor: Have new businesses come into the Southeast as a result?
Stephenson: New businesses are coming in, and as a law firm we have had a very active year in assisting local government authorities and also representing companies as they have made decisions to enlarge or locate businesses here in Georgia. For example, we assisted the city of Rome, in the northwestern part of the state, in a financing for a major new distribution center for Lowe’s Home Centers that will create 600 new jobs. In western Georgia, we assisted the city of Carrollton in connection with the expansion of the headquarters for a medical company called Greenway Medical Technologies that will create an additional 400 jobs over the next three years. We represented Husqvarna Consumer Outdoor Products with a huge expansion of its manufacturing facility in southeast Georgia, which will create more than 500 jobs. Also, this year our firm represented Athens, Clarke County, the home of the University of Georgia, in attracting a giant manufacturing facility for Caterpillar, which includes a one-million-square-foot manufacturing and distribution center that will eventually employ over 1,400 people.
We also have a major port in Savannah, which was a significant factor in Caterpillar’s decision; of course that port is – like all the ports on the East Coast – in the process of enlarging its harbor and dredging ship channels to accommodate the larger container ships that will be able to pass through the Panama Canal in two years.
Editor: What steps has the firm taken to control legal costs?
Stephenson: We are listening to our clients, and what we hear are a few things: one is that law firms need to increase lawyers’ productivity; they need to better manage matters; and they need to budget. Our clients are concerned with costs, but they are also concerned with surprises. We have always been a firm that believes in efficiency and lean staffing and are able to offer our clients a lower cost structure than many other law firms. We also offer our discovery center in Atlanta, which houses a lower-cost alternative for managing projects such as e-discovery and document due diligence.
Editor: The cost of e-discovery is a significant component of legal costs. I understand that the firm is a leader in advocating changes to court rules and otherwise helping clients reduce e-discovery costs.
Stephenson: The cost of e-discovery is high and the issues are complex. Clients are being saddled with sanctions that have wide-ranging effects on case outcome and the client. Our firm is trying to bring some equilibrium to the whole process because the federal rules of discovery allow a process that oftentimes results in the production of hundreds of thousands of documents at significant cost and little benefit to the litigants. The process needs some balance.
King & Spalding established its discovery center in 1995 for one client that had major document production. Since then it has grown to employ over 220 lawyers in an off-site facility that houses not only lawyers but paralegals and IT personnel to assist with new complexities of e-discovery and document reviews. We work for numerous clients now, often handling only the discovery aspect of a particular case. Much of the center’s work is simply handling the discovery on a national basis for our clients.
Editor: Is King & Spalding’s educational program for new lawyers and continuing legal education for members of its firm and its clients continuing to expand?
Stephenson: Clients are concerned with costs, and first-year lawyers are often the focus of this concern when they are placed in a role at a level above their experience. We try to avoid this. We think there is a role for first-year lawyers and they should play that role, and we also need to provide the proper training for our lawyers.
We maintain a relationship with law schools in the region and work closely with Emory, which has been a leader in developing a transactional course for their law students.
Our internal training programs go beyond traditional CLE programs, both in the audiences we want to reach and the information we are trying to convey. We have broadened the scope of our events to include programs not just for our own lawyers, but for outside and in-house lawyers as well. We also focus on our clients and alumni and last year provided over 80 courses specifically for clients and alumni and over 140 for our firm lawyers. Providing courses to our clients and alumni is a service we can provide for them, and it is good for our lawyers because it gives them the opportunity to learn in a more informal way about our clients’ businesses and their challenges. The traditional CLE programs feature arbitration, taxes and IP issues, but we are now also focusing on developing writing and communication skills and project management. These are topics that all tie back to my comments on increasing productivity and matter management. Some of these programs, in addition to traditional CLE, really complement the work experience of our lawyers and get them up to speed quickly. We all realize that on-the-job training remains the primary means of education. That is how lawyers learn to become lawyers, but we must provide our attorneys with some tools along the way.
Editor: Turning to your personal specialty, real estate, do you see business improving and more capital investment in the Southeast? Are there signs of recovery in new development and new construction in the Atlanta Metro area?
Stephenson: As I look out my office window I see two new apartment buildings being constructed right here in Midtown. As we all know, the single-family housing market is still in the doldrums and will take a significant amount of time to recover, but the multi-family apartment market is very attractive to investors, and there is a great demand for it nationwide and in Atlanta. There is some new real estate activity, and vacancy rates are coming down even in Atlanta’s Buckhead district, where the national press has reported high vacancy rates.
Editor: Are there any further developments in the region you would like to summarize for us?
Stephenson: Our governor, Nathan Deal, is making a strong push for Georgia to be a more attractive place to do business, which has resulted in the positive things we have talked about on the economic front. The governor recognizes that job growth is his number one priority in the state, and I think the entire state is benefiting from it. Being a right-to-work state has given Georgia a competitive advantage, but the Southeast is a tough competitive market because you have North and South Carolina and Alabama all being right-to-work states. These states have similar climates and that leads to competition in such areas as transportation and education as well as the economic incentives that attract business.