Charles E. Hardy is the top lawyer for a company that leaves a big footprint. He is general counsel for Austin Industries Inc., a Dallas-based group of construction companies that works on projects such as high-rise buildings, airport terminals, bridges, hospitals, highways and power plants.
“We build big stuff,” Hardy says.
Austin Industries is a privately held company that generates about $1.8 billion in annual revenue with roughly 6,000 employees in three operating companies: Austin Bridge & Road, Austin Commercial and Austin Industrial, Hardy says. The company’s projects include the ExxonMobil headquarters in Las Colinas and, in Dallas, the American Airlines Center and the expansion of the University of Texas Southwestern Medical Center, he says.
The company’s in-house legal department has three lawyers, including Hardy.
“We handle all of our transaction work in-house, because that primarily consists of review of construction contracts and subcontracts,” Hardy says. “We do a little bit of small litigation in-house, contractor disputes that are of a relatively modest value. The biggest one of those right now may be $700,000 or $800,000.”
Hardy says a lot of his job consists of “just general advice to our management team about how we’re going to approach a prospective piece of business.”
For instance, when the company pursues a large airport construction project, it often teams up with other large contractors in joint ventures. Hardy says joint ventures have state-specific legal requirements; for instance California may require specific contract documents when a project is done there. Hardy says to help manage risk he tries to participate on the front end with the company’s operations team when it pursues such projects.
He uses outside counsel for labor and employment matters, insurance-defense claims and construction litigation. Hardy says he turns to Littler Mendelson for labor and employment litigation and Occupational Safety and Health Administration matters. Steve McCown, a shareholder in Littler Mendelson’s Dallas office, says he has worked with Hardy for 15 or 20 years.
“One of the things he [Hardy] brought into that job is he was a criminal prosecuting attorney,” McCown says. “He knows how courtrooms work and juries work and what outside counsel face when they go into the courthouse.”
Hardy earned a bachelor’s degree in journalism at the University of Texas in Austin in 1971. While earning his J.D. at St. Mary’s University School of Law in San Antonio, Hardy worked as the assistant director of public relations for Southwest Research Institute. He was a full-time employee and a law student for four years, taking 10 to 12 credit hours per semester.
“I would go into the office in the morning, run down the street to go to a couple of classes, come back to the office and work a few extra hours to get it all done,” he says.
While a third-year law student, Hardy says he sent résumés to courts that were looking for briefing attorneys. His first job after law school graduation in 1976 was a one-year stint as briefing attorney for then-Judge Archie Brown of the Texas Court of Criminal Appeals in Austin.
In 1977 Hardy joined the district attorney’s office in Travis County.
“I wanted to get some trial experience,” he says. “Most anybody will tell you the fastest way to get trial experience is to work in a DA’s office.”
Hardy says he worked a year on appellate matters and then served as a chief felony prosecutor and tried more than 30 jury trials and more than 100 bench trials. By 1980, Hardy says he was ready for a career change.
“After some trial experience, I decided to land a job on the civil side of the docket,” he says. “Assistant DAs didn’t make a whole heck of a lot of money compared to my classmates in the private sector.”
He sent résumés to in-house legal departments and small firms. Hardy says he joined Austin Industries as corporate counsel in December 1980 and became general counsel about 10 years ago.
“I think what attracted me to Austin Industries is that they were trying to establish an ability to try lawsuits in-house,” he says. “It was an opportunity to create that capability here in Austin Industries.”
Although the company handles some litigation in-house, Hardy says he doesn’t go to court himself much these days, instead turning that responsibility over to one of the lawyers in his department. Hardy says he misses going to trial a little bit.
“Once a trial lawyer, always a trial lawyer,” he says. “I understand how the process works, and that makes it a whole lot easier for me to manage that process.”
D. Steven Henry, a partner in the Dallas office of Gardere Wynne Sewell, handles construction litigation for Hardy, typically breach-of-contract actions. Henry says he has worked with Hardy for 15 years and considers him a close friend.
“When something good happens, he’s very much a cheerleader and makes outside counsel really want to work harder, because he’s very positive in his reactions,” Henry says. “When something doesn’t necessarily go the way you want it to, he’s very businesslike and asks, ‘Could we have done something differently’ or ‘What happened,’ not ‘Why did you guys mess this up?’ “
Hardy lives in Dallas and says he can be found most weekends on the golf course at Las Colinas Country Club. He says that he would not have predicted that he would work 30 years in-house but has done what any lawyer does throughout his or her career.
“You take the opportunities presented to you,” he says. “I tell people that Austin Industries is the perfect client.”
For the general counsel of one big player in the construction industry, the key elements in selecting outside counsel are “responsiveness and relationship.” Charles E. Hardy is the general counsel of Dallas-based Austin Industries Inc., which builds large projects such as bridges and airports. Texas Lawyer research editor Jeanne Graham e-mailed Hardy some GC best-practices questions. Below are Hardy’s answers, edited for length and style.
Texas Lawyer: What are the most important factors you consider when hiring outside counsel?
Charles Hardy, general counsel, Austin Industries Inc.: The most important factors in choosing outside counsel are responsiveness and relationship. Austin Industries is largely a relationship-based business, though we also have to compete based on qualifications and pricing. While legal fees and expertise are certainly important, I have found that once we establish a good working relationship with a law firm, we can usually negotiate favorable fee arrangements.
TL: Under what circumstances do you expect outside counsel to offer alternative billing?
Hardy: We have had good success in negotiating alternative fee arrangements on major litigation, as well as on ongoing work, such as labor and OSHA matters. We have also negotiated “not to exceed” fixed fees on simple projects, such as local adaptation of Austin’s standard contract forms. We have been using alternative fee arrangements for many years.
TL: Do you pay for the work of first-year associates?
Hardy: I have no objection to involvement of first-year associates, so long as the fees are reasonable and the young lawyer is adding value to the matter.
TL: What percentage of your company’s legal work is done in-house and what areas of work does that include?
Hardy: Almost all of our transactional work is done in-house, since it involves review and negotiation of agreements between one of the Austin operating subsidiaries and our customers, or between Austin as general contractor and our subcontractors. We also do some of the smaller litigation and arbitration in-house. Major litigation or any litigation outside Texas is handled by outside counsel, supervised by our legal department.
TL: Which one thing from your previous legal experience is helping you most on the job today?
Hardy: The most important thing I have learned in my legal experience is that relationships matter. The relationships that I and the other lawyers in our legal department have established with our company’s managers is as important as the relationships that we all have with the lawyers in Texas and other states who practice construction law. We have been able to resolve many issues that could have turned into disputes or litigation because the lawyer on the other side of the issue is someone we know and have done business with before.
— JEANNE GRAHAM
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