This article originally appeared in the The American Lawyer's September 2000 issue under the headline "Money to Burn."
Considering the money, the excesses of the 26 partners of Ness Motley Loadholdt Richardson & Poole don't even approach wretchedness. Okay, Ronald Motley did hire Earth, Wind and Fire to perform at his wedding last year, and his two-year-old 156-foot yacht is almost as recognizable a sight in the Charleston Harbor as the Yorktown aircraft carrier. Yes, the firm did buy a new plane, its third, a ten-seat Falcon 50; and yes, it did build a spanking new office building, a five-story brick-and-glass showplace overlooking the harbor.
It's also true that Ron Motley and Joseph Rice probably spent a little more on decorating their new offices than they would have without the tobacco money, which amounted to an extra $2.5 million or so in profits per partner this year. Motley's office is all curved, polished blond wood—like the cabin of a fabulously luxurious yacht—complete with a gigantic saltwater fish tank and an oil painting of Motley's old 108-foot yacht. Rice imported a wood carver who had done a Colorado ski house he admired; "Okie," as the Oklahoma craftsman is known, installed wood-beamed ceilings, wide-plank wood floors, and the wood fireplace mantel in Rice's western-themed four-room office suite.
But Rice's Remington sculptures are reproductions. He and Motley share a kitchenette. And the truth is, the new office building was already under way before Ness Motley ever got word of the hundreds of millions in tobacco fees it stands to collect over the next 20-odd years, and though the firm may have added a flourish here and there, the basic plans didn't change. Despite the influx of the first tobacco millions, none of Ness Motley's 26 partners have bought new houses with their money, nor new cars to park in their fancy office garage. Even Paul Hulsey, the firm's Ferrari buff, resisted the urge to trade up to this year's model. Such modesty in disposing of their newfound money is in some part a deliberate effort by partners not to appear crass, but it's also a de facto commentary on the income level of Ness Motley's partnership.
As co-managing partner Terry Richardson, Jr., puts it, oh so delicately: "We did not lead difficult lives before the tobacco fees."
Not difficult indeed—if almost $2.5 million a year, per partner, is regarded as sheer icing. Here's a little perspective. The Am Law 200 partners in our survey averaged $574,816 in profits in 1999. That's what it costs to keep a yacht like Motley's shipshape for three or four years. Ness Motley's profits per partner through the mid-1990s—even before the tobacco fees—would have placed it among the most successful firms in The Am Law 100, with partners bringing home, on average, more than a million a year. In Charleston, where you can still buy a gut-stuffing breakfast for $3, that kind of money goes a long, long way. (Ness Motley's gross revenue, before tobacco, wouldn't have qualified it for The Am Law 100, which has not traditionally included plaintiffs firms with contingency-fee practices.) The widely publicized $65 million Ness Motley garnered in tobacco fees this year inspired virtually every charity in town to come calling at the firm. Not realtors and furriers and boat salesmen and car dealers, though: "Most of them," observes one partner, "already know us. We've been here a long time."
Ness Motley's partners, individually, haven't outearned everyone else in the tobacco bar; the lawyers splitting Texas's billions in tobacco fees, or Ness Motley's tobacco partner, Richard Scruggs, get that honor. But Ness Motley is the law firm whose partnership will collect the most in tobacco fees. For these lawyers who already had just about everything they wanted, what has the tobacco money bought?
J. Anderson Berly III, a Ness Motley partner, was out of town arguing tobacco motions for most of his wife's pregnancy with their third child. He began a yearlong sabbatical from the firm in April. "There's not a direct relationship between the tobacco money and the year off," says Berly. "Though it's fair to say the tobacco fees make it easier." Berly was exhausted after almost five years of tobacco litigation, especially as the fee disputes in Florida and Texas grew ugly. "I didn't have the drive and stamina to jump into a big project," he says. "I needed a break. Now my full-time job is being a dad."
"The tobacco money, surprisingly, hasn't changed the firm as much as I expected," says partner John "Jack" McConnell, Jr., who lived in New York for several months in 1998 during the state tobacco settlement talks. "But one effect it's had is that it's allowed us to take more time to smell the roses." McConnell cites his own schedule: He and Joe Rice were in Denver in June for a tobacco fee arbitration hearing, and were scheduled to be in Seattle four days later, at the semiannual meeting of the states attorneys general. "Before," he says, "we would have flown home to squeeze in a few work days in between." Instead Rice stayed in Denver to play golf and McConnell drove to Seattle, stopping on the way to sightsee at the Grand Tetons and Yellowstone Park.
No one quit the practice at Ness Motley because of the tobacco money. No one decided to run for the U.S. Senate, like tobacco litigator Michael Ciresi in Minnesota [Bar Talk, July 2000], or to head for Tahiti, like Ness Motley's old tobacco ally Dick Scruggs, who keeps his boat in the South Pacific. "We are a firm of workaholics," says Berly. It's also a young firm, with only three partners over 50. But the money has bought those who wanted it a slower pace. Senior partner James "Jackie" Rion, Jr., for instance, is in the middle of a yearlong sabbatical, traveling and teaching at the University of South Carolina Law School. Even Rice is spending one day a week teaching product liability and mass torts classes at Duke University Law School in North Carolina.
Plunging wholeheartedly into the tobacco litigation was a much-debated decision at Ness Motley back in the mid-1990s. Many partners worried that not only was it too expensive to work up the litigation, but that tobacco would divert resources from the firm's bread-and-butter asbestos and mass tort cases. (Ness Motley had a high enough profile among big-time plaintiffs firms that it has long enjoyed the luxury of picking and choosing from among the most potentially lucrative mass tort work.) Terry Richardson, who specializes in examining the risk to the firm in potential litigation, says Ness Motley will still apply the same risk analysis when considering new work, but with a slightly different attitude. "Tobacco could have bankrupted us all," he says. "I don't see that happening now."
"The debates [over how much to spend on risky litigation] are not quite so brutal," says Rice, touting the firm's ventures into lead paint and HMO litigation. "We can be more aggressive."
Obviously, the tobacco money made a bigger difference to some partners than others. Ness Motley revisits its profit allocations every three or four years, and was due for a reexamination when the first tobacco fees were announced at the end of 1998. "There was certainly some tension early on," admits partner McConnell. "We had a big philosophical discussion over how you value the effort of those who got into the tobacco work versus the effort of those who stayed back minding the store."
"The more people you get trying to eat out of the trough, the more difficult it is," says Rice. Around the same time that partners divvied up the tobacco money, they added ten new partners to the ranks. (Technically, Ness Motley is a corporation, not a partnership, so "partners" are actually shareholders.)
None of the Ness Motley partners will say just how the tobacco money was divided, only that in the end, all 16 of the then-partners agreed to the split. The money has varied in its impact on partners' lives. Partner Thomas Rogers III, for instance, says he's been doing product liability litigation since 1980, and will probably still be doing the same sort of cases in 20 years. "We're still the same firm," he says. Paul Hulsey, however, decided to vary his practice a bit, veering off Ness Motley's mass torts track. This winter Hulsey went to Puerto Rico to try an automobile crash case, representing the parents of three children killed in a head-on collision with a Pepsi truck. In April he won a liability finding against Pepsi. I felt great about being able to go and handle a case like that, Hulsey says.
"Everybody has made a run at Ness Motley," says M. Dawes Cooke, Jr., a Charleston lawyer who heads the local Rotary Club's Gift of Life program, which flies sick kids from around the world to Charleston for life-saving surgery. "Everyone knows how successful they are."
In the wake of publicity about the tobacco money, Ness Motley began receiving up to 200 requests a month for money, according to Hulsey, the head of the firm's charitable-giving committee until January. "We were deluged," he says. Requests poured in from groups all over the country, organizations no one at Ness Motley had ever heard of before, like the group devoted to rescuing old horses that made an appeal to Rice's horse-loving instincts. One particularly brazen college in New York requested money on the less-than-persuasive grounds that one Ness Motley lawyer was a graduate.
Ness Motley occupies a strange place in the civic life of Charleston. Name partner Julius "Bubba" Ness, was a fixture of the South Carolina bar, joining the firm after stepping down as chief justice of the state supreme court. Co-managing partner Richardson married Ness's daughter and inherited his mantle of influence. But Ness and Richardson were originally from Barnwell, South Carolina, where the firm got its start, next door to a beauty parlor in a strip mall. Today the firm's main office is in Charleston, where its partners don't have the old-line connections Judge Ness had; everyone seems to know that Ron Motley grew up on the wrong side of the tracks in North Charleston. Even though Ness Motley is among the biggest firms in town (and rumors about its compensation packages make it tough for other firms to hire support staff), it doesn't have a natural leadership spot in the Charleston bar.
Indeed, the firm's new office building in Mount Pleasant is metaphorically appropriate. Charleston's old-line lawyers are comfortably settled into meticulously maintained rowhouses surrounding the historic courthouse in this old, proud city. Ness Motley stands apart, alone in its fancy new building, across a bridge from most of Charleston's law firms, facing the harbor that a century ago was Charleston's connection to the rest of the world. "Charleston is a very cliquish town," says bar president Michael Molony. "You don't see [Ness Motley partners] in old-line Charleston clubs and societies."
You do see them, however, Molony says, on charitable boards. Even before the tobacco fees were announced, senior Ness Motley partners used philanthropy—often individual donations to pet causes—to engender goodwill. Then, when word got out about the tobacco money, says Hulsey, the head of the firm's charitable-giving committee for five years, Ness Motley was approached by Charleston's Community Foundation Serving Coastal South Carolina. "They said they'd set it up so you give the money to them and they dole it out," Hulsey says. In Minneapolis, Robins, Kaplan, Miller & Ciresi handled its philanthropy through an intermediary foundation. Ness Motley opted not to. "We wanted to have greater control, to earmark it," says Hulsey, who declines to specify how much the firm gives away, saying only that it's several hundred thousand dollars. With the newfound tobacco money, the firm has upped its bequests to its traditional recipients, such as the United Way of Charleston and the Hollings Cancer Center, by about 50 percent. "They've done so much," says Cooke, the lawyer who raises money for the children who need surgery. "There was a girl from Bosnia with leukemia—they paid for her to come over and get a bone marrow transplant." The firm pledged one of its planes to fly a rural South Carolina boy who needed a heart transplant to Charleston, Cooke says, and when he told Joe Rice's paralegal, Benee Wallace, that the boy needed a special diet after the transplant, "she said, 'Come on over and get a check for him.'"
Individual partners have also increased their charitable giving. Paul Hulsey got newspaper headlines for spending $15,000 to replace spoiled food so the Salvation Army could put on its regular Thanksgiving dinner last year. Most spectacularly, one partner gave $1 million anonymously to the Community Foundation. "Their giving is strong, but it's hard to see," says June Bradham, who advises several Charleston charities on fund-raising. "It's very individual, very fragmented."
Of course, the underprivileged children aren't the only beneficiaries of Ness Motley's tobacco windfall: There are also Democratic politicians. Political giving at Ness Motley has skyrocketedup 1,000 percentsince the tobacco fees were announced. It's a privilege, says partner Jack McConnell, to be able to invest in the political process, in people who believe in what we believe in.
The American Tort Reform Foundation's Web site tracking political contributions by trial lawyers, which lumps together money given by the firm and by individual partners, ranks Ness Motley fifth in the country among plaintiffs firms as of November 1999. The firm, according to one partner, gave about $500,000 to Democratic candidates this year, and $400,000 the year before, in addition to contributions by individual partners, at least eight or ten of whom gave the federal maximum of $25,000. (Charitable giving by the firm and its partners, maintains Paul Hulsey, still outpaces political contributions.)
Putting aside the question of friendly votes on issues of importance to trial lawyers, there are fringe benefits to the Ness Motley partners who are political givers. McConnell, an active Democrat in his home state of Rhode Island, is on a first-name basis with the Hillary Clinton, for whom he held a Senate campaign fund-raiser at his house. "To be on a receiving line [at the White House] with 300 people and have her stop and say, 'Jack, Sarah, it's so good to see you again,' that's an amazing feeling," says McConnell.
Though no more amazing, he adds, than the sight of his partner Joe Rice at a May Democratic fund-raiser in Washington. Rice, who was not as politically active before the tobacco litigation, still seems positively giddy about his newfound proximity to power. He played golf with President Clinton last year. And at the fund-raiser in May, he sat with Al Gore. "Watching Joe Rice and Al Gore rocking to Lenny Kravitz," says McConnell, "now that was the funniest thing."
Maybe money can't buy you love. But ask the partners of Ness Motley: It can sure buy a lot of fun.