Mark M. Chloupek is an up-to-the-minute kind of lawyer. When he hires outside counsel, he expects to know what they know, when they know it.
“As much as I don’t micromanage what they are doing, I want to know everything they are doing,” says Chloupek, executive vice president legal and general counsel of Irving-based LQ Management. “I want to be copied on everything, every step of the way. I need to know everything, at all times.”
LQ Management owns or franchises more than 730 hotels in the United States, Canada and Mexico under the La Quinta Inn and La Quinta Inn & Suites brands. During the first half of 2009, the company opened 21 hotels and signed 36 new franchise agreements, giving it a total of more than 75,000 rooms, according to information on the company’s Web site.
“I support all of the different business functions,” says Chloupek, the company’s lead lawyer. He also oversees LQ Management’s human resources and risk management departments.
If asked for an update on a legal matter from one of his internal clients, such as a property manager, Chloupek says he wants to be able to give an immediate reply, whether he is handling the matter internally or using outside counsel.
“If I’m called, I need to know up-to-the-second what is happening,” he says. “I don’t want to hesitate. I want to be able to say exactly where we are on everything.”
LQ Management has one lawyer in addition to Chloupek. Robyn Fuller, vice president legal and assistant general counsel, handles the company’s franchise program, Chloupek says, which allows Chloupek to focus on other legal demands, including overseeing outside counsel.
Legal matters in the hotel business range from negotiating contracts with vendors or handling a guest dispute that escalates, to dealing with governance issues such as establishing and implementing standard operating procedures, says Kelly F. Bagnall, a partner in the Dallas office of Brown McCarroll who handles corporate and litigation matters for Chloupek.
“He understands this industry extremely well and has the unique ability to keep a lot of moving parts moving well together,” she says. The moving parts involve legal issues that come with the complicated business of running hundreds of hotels, both managed and franchised, and handling revenue, tax, risk and construction details, she says.
“All those things fall under his purview from the legal side,” she says. “Once he has trust in your work, he gives you latitude to really facilitate the things that the company needs.”
Chloupek first worked with one of the lawyers he now uses as outside counsel — Locke Lord Bissell & Liddell partner Robert P. Taylor — in 1996. At that time, the Dallas-based firm was known as Locke Purnell Rain Harrell. Chloupek and Taylor handled general corporate and hotel management and development matters for Dallas-based Wyndham International Inc.
“They hired him away from us in August 1999,” Taylor says. Chloupek was an associate with Locke Purnell for three years before joining Wyndham as vice president legal operations and assistant general counsel.
Chloupek, the last of four children, was born and raised in Potomac, Md. He went to law school because he believed a postgraduate degree would be a prerequisite for success.
“I knew I wanted to pursue a further degree, and that was because I was going to go into the business world and knew I needed more than an undergraduate degree,” he says. He chose to study law rather than business because, he says, “in law school you learn to think, and I knew that would be applicable in any field.”
He received his law degree in 1996 from the University of Virginia School of Law. Chloupek says he chose to work in Dallas after law school because he wanted to work in a different part of the country.
When considering career plans, Chloupek says he explored a number of in-house positions but decided he would receive better initial training at a large firm like Locke Purnell, where he had been a summer associate in 1995.
Chloupek, who now lives in University Park with his wife and two young children, credits his experience at Locke Purnell — where he worked on initial public offerings, mergers and acquisitions, private placements and partnership issues — with giving him a broad understanding of various areas and knowing when to use specialists.
“We all like to think we can do everything, but you need to be able to know when a particular issue may require the expertise of someone who operates in that specialized area on a regular basis,” he says.
Since going in-house with Wyndham and eventually becoming GC at LQ Management, Chloupek says he has turned to Taylor for help with general corporate work, including hotel management agreements.
Taylor describes Chloupek as a client and a friend. He says one of Chloupek’s strengths as an in-house lawyer is his ability to communicate well with businesspeople.
“He certainly has that talent,” Taylor says. “I think he’s got a personality where people like to work with him too.”
Carl B. Lee, a partner in the Dallas office of Akin Gump Strauss Hauer & Feld, has handled real estate transactions, including hotel acquisitions, for Chloupek since Chloupek went in-house.
“The fact that he’s practical, that he appreciates good advice and is appreciative of a good job — those are things that a lawyer really values in a client,” Lee says.
Chloupek says other lawyers he relies on as outside counsel are Cynthia Nelson, a partner in the Dallas office of Gardere Wynne Sewell, for acquisitions; Will K. Woods and Ann Hurwitz, partners in the Dallas office of Baker Botts, for intellectual property matters; and Bryant S. McFall, a shareholder in Ogletree, Deakins, Nash, Smoak & Stewart in Dallas, for labor and employment issues.
Chloupek says he has worked with each of the lawyers he counts as outside counsel for more than a decade.
“The reason I’ve had long-term relationships with these people is because it’s such a pleasant experience working with them, and they understand my expectations, which makes me able to multitask,” he says. “There is no learning curve. These people understand exactly what I expect of them.”
Unlike some in-house lawyers, Chloupek does not object to outside counsel using first-year associates on his projects.
“As long as the bottom-line cost to me is within my expectations, I am not going to micromanage how they staff a particular project,” he says. “All I care about is what that final bill is and what the final work product is.”
Wyndham was acquired in 2005 for about $3.2 billion by The Blackstone Group, based in New York City. At that time, Chloupek was senior vice president operations and chief counsel for Wyndham.
Chloupek says he stayed on with Blackstone after the acquisition and worked on several large transactions, including a $100 million deal in which New York City-based Cendant Corp. acquired the Wyndham brand in September 2005, which is now Wyndham Worldwide Corp.
“We sold them all the management agreements, franchise agreements, intellectual property and managing infrastructure,” he says.
Chloupek also began working on the disposition, in October 2005, of more than $1 billion in Wyndham properties to Columbia Sussex Corp., based in Crestview Hills, Ky.
“That deal closed in September 2006,” he says. “We essentially sold them many of our hotels.”
During the fourth quarter of 2005, Blackstone became interested in another hospitality corporation.
“We began exploring the possibility of acquiring La Quinta Corp., which was publicly traded at the time, and closed on that acquisition in January 2006,” Chloupek says.
The acquisition of La Quinta Corp. and La Quinta Properties Inc., including debt, was valued at approximately $3.4 billion.
“When you’re doing transactions, at some point it doesn’t matter how many zeroes are attached to it,” Chloupek says. “At the end of the day, you have to do the same due diligence.”
With the acquisition, Chloupek became executive VP and GC for LQ Management, which oversees La Quinta operations and properties.
Wayne B. Goldberg, president and chief executive officer of LQ Management, says Chloupek had earned the respect of several Blackstone managers for his work with the company after it acquired Wyndham, and they suggested Goldberg consider Chloupek for LQ Management’s GC. Goldberg says Chloupek’s reputation was well-deserved.
“He seems to understand that his role is to help us get things done and not have legal in our way, so to speak, or in the operators’ way,” Goldberg says. “I’ve never worked with an attorney who understands that better.”
Between 2005 and the summer of 2008, credit was flowing easily, Chloupek says, but things have changed significantly since then.
“We had transactions closing on a weekly basis, on both the acquisition side and disposition side,” he says. “By the end of 2008, the credit market tightened to the point where almost all real estate transactions came to a halt.”
But despite the tight credit market, LQ has been able to continue growing through its franchise business model, which does not require a capital outlay, he says.
“We will add 80 or more franchise properties during 2009,” he says. “The La Quinta brand will have more than 400 franchises by the end of this year.”
Goldberg gives Chloupek high marks for the successful opening in April of one of the company’s newest hotels. He says that Chloupek was involved “every step of the way” in the opening of La Quinta Inns & Suites — Chicago Downtown. LQ Management purchased and renovated a nine-story office building and expanded it to accommodate 241 guest rooms.
“Chloupek was instrumental, especially going through the construction phase of the project, working with unions, contractors, design engineers, and obviously a lot of legal work that came into play,” Goldberg says. “We spent several years in the development of the property. This was a major, major project for us.”
Goldberg says Chloupek’s communication skills were an asset in developing the property.
“There is a huge value in being able to talk to your people on the ground and in the field, without legalese, in a language they will understand,” Goldberg says. “Mark knows how to adjust the conversation based on his audience. I give him high marks for that.”