Jack Balagia. (Courtesy photo)
When Jack Balagia started at McGinnis Lochridge & Kilgore in Austin in 1977, his boss asked him if he would like to do some Railroad Commission of Texas work on behalf of the firm’s client, ExxonMobil Corp.
The young associate’s response? “That would be great,” Balagia recalls during a recent interview. “Then I walked down to my office to find out what Railroad Commission work was.”
Little did Balagia know at that time just how much work he would end up doing for the international oil and gas giant. Balagia retired as Exxon’s vice president and general counsel on Nov. 1, shortly after hitting the company’s mandatory retirement age of 65. He had been with Exxon more than 18 years, the last six as the leader of a legal department with more than 400 lawyers in 31 offices worldwide.
“Sometimes I wish I had joined the company sooner, but the way it all turned out, it’s hard to go back and fashion a scenario that would be better than this,” Balagia says.
To those who have known and worked closely with Balagia during that time, his rise to Exxon’s highest legal role came as no surprise. “Jack is a master of both the analytical and human sides of the law,” said Ward Farnsworth, dean of The University of Texas School of Law, where Balagia is vice chair of the Law School Foundation. “He has a remarkable capacity to see deeply into a legal problem and to solve it creatively.”
And unlike some other attorneys who have reached the top of the profession, Balagia is a pleasure to work with and simply be around, colleagues say. Because Balagia “treats everyone with warmth, kindness and respect,” he is “one of the most well-loved lawyers in Texas,” Farnsworth says.
“He’s one of the more delightful people around in terms of personality,” says Shannon Ratliff, who has worked with Balagia for nearly 40 years, first at McGinnis Lochridge, where Ratliff was a partner when Balagia joined the firm, and since at Exxon. “He’s funny, kind of a ham and fun to be around.”
An avid Frank Sinatra fan, Balagia occasionally likes to sing like Ol’ Blue Eyes, adds Ratliff, describing his old friend as a “pretty good singer.”
“He usually starts that after he and I have both had a few drinks, so I may not be a very good critic,” he says.
Route to the Top
Balagia joined Exxon from McGinnis Lochridge in 1998 as counsel in the litigation group. His practice at the firm—which he joined in 1977, about 20 years before his move in-house—initially was largely regulatory. But a few years later, he began doing more trial work for Exxon, eventually moving to Houston when McGinnis Lochridge opened an office there.
He became coordinator for Exxon’s upstream litigation a year after he joined the company and was named assistant GC in 2004.
Balagia counts the significant cases and verdicts that were reversed during his tenure as among his proudest professional accomplishments. Perhaps the most high profile of these is the Supreme Court ruling that slashed the amount of punitive damages the company had to pay for the catastrophic Exxon Valdez oil spill.
Other victories that Balagia says come to mind include the Alabama Supreme Court’s reversal of a $3.5 billion punitive damages award in Exxon’s dispute with the state over the payment of royalties from natural gas production in Mobile Bay—a ruling that effectively ended a decadeslong litigation in the company’s favor.
And most recently, in 2013, Maryland’s highest court struck down the bulk of two jury verdicts against Exxon that awarded residents and businesses $1.65 billion in judgments stemming from an underground gasoline leak in Baltimore County, including the entirety of a $1 billion punitive damages award.
Although he says he’s not sure he would want to enter the world of litigation again, Balagia says he does miss the courtroom. “For the trial lawyer, it is very uncomfortable for you to go watch other people do what you used to do,” he says. “I think, ‘I should be up there doing that or maybe I could do this better. It’s an intellectual challenge, and maybe I’m missing out on that.’ “But maybe if I had to go do it again, I might not feel that way. The grass is always greener.”
Balagia is matter of fact when he discusses his forced retirement, noting that although “I don’t know that I’m ready to stop working…the deal here is when you reach 65, it applies to every senior manager, and I accepted that as part of the deal.”
Balagia says he has not yet decided his next career move but “would consider all options.” In the meantime, he is signed up to co-teach oil and gas law at the UT law school this spring. An Austin native, Balagia holds both his undergraduate and law degrees from UT and maintains close ties to his alma mater—a relationship that is invaluable to the UT Law community, stakeholders say.
“Everyone at the Law School is greatly excited that Jack will be teaching in our classrooms,” Farnsworth says. “We’re very proud of our energy law program, and he will be a great addition to it. Our students will be lucky to learn from him.
“We’re immensely proud of all that Jack Balagia has achieved, and of the high standards he has set as a lawyer and citizen.”
Adds associate dean for administration and strategic planning John Beckworth, also via email: Balagia’s unique perspective as a long-time-practitioner-turned-GC at one of the world’s largest and most complex energy companies, “from the intersection of the most sophisticated legal questions and practical choices that have potential national impact, will enrich our academic and practice points of view.”
Observations From the Top
Balagia says he has seen some significant changes in the in-house bar in the nearly 20 years since first joining its ranks. For starters, there is “much more emphasis” on companies’ compliance law function in the wake of passage of the Sarbanes-Oxley Act and Dodd-Frank, as well as increased enforcement of the Foreign Corrupt Practices Act, he says.
Another increase Balagia says he observed during his time at Exxon is the quality of in-house lawyers. The market for lateral attorneys coming in-house has been “very strong” in the last 10 years, and “in-house law departments are beneficiaries of that,” he says.
“Twenty or 25 years ago, in-house law departments would not have attracted the experience and levels of lawyers that we have available to us today,” he adds.
Balagia says he noted this trend before the 2008 financial crisis, and attributed it in part to a “dissatisfaction with private practice” and recognition of the “true benefits of being in-house” that predated the crisis that hit the legal profession hard. Thus, he expects the high caliber of the in-house bar to continue.
“The future of in-house law departments is very strong,” Balagia says.
“There’s a certain stability in working with a business … young lawyers have the opportunity to take on more responsibility earlier, which is not as available in private practice. I’m not sure what the future of the private practice portion of the law profession is. It’s not as predictable as it has been in the past.”
Balagia says this development certainly has played out in Exxon’s legal department, where “the quality of the lawyers is as good as I’ve seen in private practice.”
In a company that Balagia says is “constantly working on succession planning and making sure there are opportunities for our future leaders,” Exxon’s lawyers now report to Balagia’s successor, long-time in-house Exxon attorney Randall Ebner, who was assistant GC since 2009.
In his new role, Ebner will take on “the usual issues that we continue to face,” from lawsuits and investigations to mergers and acquisitions, and lead a department where the substantive areas that are practiced “are much broader than gas law,” affording its attorneys “the great opportunity to work on almost every area of the law,” Balagia says.
Looking back on nearly four decades of legal work, what advice would Balagia offer to one of those lawyers—or to one of those UT Law students enrolled in oil and gas law this semester—who aspires to become a GC someday?
“It takes a lot of hard work, but it also takes some luck.”