In 1976, Rick Burleson had a decision to make: join the Kansas City Chiefs or go to law school. Burleson, defensive end for the University of Texas Longhorns at the time, was a sixth-round draft pick for the pro football team during his senior year in college.
When it came time to make the decision, it didn’t hinge on the Chiefs’ lackluster 5-9 season that year. After playing the crushing sport of college football Texas-style, Burleson was ready to use more of his head and less of his brawn.
Looks like he made the right move.
The founder of Burleson LLP in Houston, Burleson heads a 120-attorney law firm fueled by oil and gas exploration. In seven years, the law firm, which focuses almost exclusively on energy, has flourished in a market increasingly dominated by big law firms expanding into the industry.
Burleson (pronounced “Bur-leh-son”) now has offices in Houston, San Antonio, Denver and Pittsburgh. Since 2005, the firm has grown from a two-person operation and now has 20 partners and about 100 associates and senior counsel attorneys. Revenue for 2012 is expected to top $50 million, Burleson said, an increase of about 20 percent compared to last year.
The firm’s bread and butter is commodity oil and gas title work — unsexy, less lucrative matters passed over by larger firms. The practice requires scrutinizing land ownership history and determining mineral rights so they can be conveyed to energy developers.
And Burleson, ranked No. 345 on The NLJ 350, The National Law Journal’s expanded annual survey of the nation’s largest law firms, also is grabbing chunks of deal and litigation work from the likes of ConocoPhillips, Chesapeake Energy Corp. and BP PLC. At the same time, it handles transactions and financing for smaller companies. In March, the firm represented Wheatland Oil Inc. in a $340 million sale of some of its shale formation assets to Continental Resources Inc. A month before, it closed a $3 million stock financing deal for Aggredyne Inc.
‘PRETTY MUCH KICKING BUTT’
“He’s pretty much kicking butt,” said Robert Kinney, president of Houston’s Kinney Recruiting, an attorney placement firm.
The firm has made key hires from Vinson & Elkins, Baker Botts and Fulbright & Jaworski, Kinney said, and has a reputation for low overhead and a focused, streamlined partnership unit that compensates rainmakers robustly.
Part of the strategy, according to Burleson, 58, is to use the oil and gas title work to get in the door with clients and then convince them to let the firm handle litigation and transactions. Burleson calls it the “land to legal” strategy. “It gets our nose under the tent,” said Burleson, who graduated from University of Houston Law Center in 1980.
After law school, Burleson took a small-firm gig focusing on public financing and a few years later moved to Dallas-based Jackson Walker. His last stint at a big firm was at Jones, Walker, Waechter, Poitevent, Carrère & Denègre, where he worked until 2004. He then started his own shop with Claude Cooke, a patent lawyer and scientist who left to form an intellectual property practice last year.
Besides the land-to-legal strategy, the firm takes a more fundamental approach: Go where the work is. Three years ago, it opened the Pittsburgh office just as the potential came to light for using the controversial hydraulic-fracturing process to extract natural gas from shale in the region. The office opened with four lawyers and now has 33. Title work and mineral-rights leasing are a big part of the business there, but the office also has litigation, securities, finance and regulatory practices.
In 2010, Burleson opened in San Antonio to tap into shale resources there, and last year it debuted in Denver to focus on oil and gas exploration.
Burleson recognizes that the firm’s business model is hyperspecific to an industry that can be extremely volatile. During the past month, crude oil prices fell from $98.49 per barrel to $83.23. “The boom-and-bust kind of industry is not lost on us,” he said.
His plan is to make sure the law firm is spread across enough practice areas in the energy industry, and he’d like to bolster the litigation, corporate and securities practices to help buffer any sharp declines.
Making major inroads into those areas could prove challenging, given the influx of big firms into Houston and the global energy sector in general. This year, Paul Hastings and Sidley Austin both opened in Houston. In 2011, Simpson Thacher & Bartlett and Winston & Strawn moved in, following Latham & Watkins, which opened a Houston office in 2010.
The energy market is big enough to sustain both large and midsize law firms, said Greg Nelson, chairman of Paul Hastings’ Houston office. Still, the biggest money is in capital markets, finance and mergers and acquisitions. Paul Hastings, which services international investors and their money sources, is after those deals, Nelson said, and his firm’s global platform can handle them. (Paul Hastings has seven lawyers in Houston and said it plans to add more.)
A difficulty for all law firms hoping to boost their energy groups is a shortage of lawyers who understand the practice, Kinney said. Especially for firms like Burleson that want to perform boots-on-the-ground title and lease work, the corps of experienced lawyers is aging. Plenty of attorneys, especially in Texas, Louisiana and Oklahoma, went into the field during the oil boom of the early 1980s. Since the bust just a few years later, it hasn’t been an attractive career path for lawyers.
As big firms have moved into the Houston market, supplying them with experienced laterals has been a game of musical chairs, Burleson said. “Law firms like Latham & Watkins are not putting new oil and gas attorneys into the market,” he said.
Latham’s strategy of hiring laterals from other firms has been “very successful,” said Michael Dillard, managing partner of the Houston office. “We’re thrilled to have attracted some of the top talent in the market.”
Lawyers from Baker Botts, Fulbright & Jaworski and Vinson & Elkins have shuffled to the new firms in the area, and Burleson conceded that his firm has done its share of cherry-picking laterals. It’s a strategy, he said, that has created some hard feelings among lawyers in town.
LEARNING A LESSON
“We learned a lesson. You really can lose a lot of friends that way,” Burleson said, adding, “That’s not to say that we won’t [hire laterals], but we won’t go in and steal somebody’s whole practice away.” As a result, the firm has focused on bringing young lawyers up through the ranks, and now has an associate-to-partner ratio of nearly 5-to-1. Not only does the high number of associates keep the dollars made from commodity work rolling in, but it also positions the firm for future expansion.
Burleson touts the firm’s immersion program, which pairs selected associates with partners to learn the nuts-and-bolts of a practice, as a big part of the effort to train and retain talent in the areas of corporate law, finance and litigation.
Also to meet the demand for more lawyers, the firm has recruited about 30 attorneys from in-house positions. Lawyers formerly working for Devon Energy Corp., Mariner Energy Inc. and Citation Oil & Gas Corp. now work at Burleson.
Going forward, the firm’s rise makes it an attractive target for an acquisition by larger firms. “It’s the kind of firm we’d definitely look at,” said one large law firm leader, who requested anonymity because of the sensitivity of merger plans.
Burleson ruled nothing out, but he knows that the job satisfaction that he and his colleagues feel largely is attributable to the firm’s sharp focus and nimbleness. “Money’s important, but it’s not the only thing,” he said.
As for the Chiefs, who knows what Burleson could have accomplished for the team? After he turned them down in 1976, the team the following year had its worst season in franchise history.
Contact Leigh Jones at firstname.lastname@example.org.