By 1987 -- just about the time Pat Moran began asking questions about the firm's handling of his grandfather's estate -- V&E's net profits were pegged at $50.7 million, and its profit-per-partner was $295,000 a year. Fees from First City amounted to $5 million alone for V&E, and the firm performed 60 percent of First City's legal work.
Judge Elkins, the dominant voice in the firm from its beginning, ran the show pretty much as a benevolent dictator. Long after he had relinquished the formal reins of command to successors and until his death in 1972, Elkins continued to exercise considerable behind-the-scenes clout. The judge had definite ideas of what a respectable Houston lawyer should look like, and in his lifetime a V&E attorney was a white male expected to work killing hours as an associate. He also was expected to wear a hat year-round, specifically a Homburg in winter and a bowler in summer.
Some of those traditions have been discarded, of course. Women and minorities are now represented in the V&E workforce, primarily in the associate ranks, and the hat tradition long ago passed into history. But a more profound trademark Elkins stamped on the firm has not only continued, but has been amplified. Elkins believed Vinson & Elkins should be represented on all levels in the political life of Houston and Texas. Contributions from Vinson & Elkins' political action committees and fundraising by the PACs' head, partner Joe B. Allen, now figure in almost every political contest of note in the city. [See "Into the Mystic (Book)," page 14].
Another tradition that hasn't fully gone the way of the bowler is V&E's desire to be a player in many areas of the city's commerce and to have its lawyers sit on as many corporate boards as possible. In an increasingly litigious era, when conflicts of interest are a prime concern, that vestige of Elkins' day can spell trouble.
"That's how it worked in the good ol' boy era," says one former V&E partner. "It was good to be on all sides of a deal, sitting on the boards. You could get a better price for your client."
But with the advent of new, expanded definitions of legal malpractice and conflict of interest, V&E is "having to learn how to change," says the lawyer.
Thus far, it has been an expensive lesson.
The late William Moran was an East Texas wildcatter with a shrewd, native intelligence that surmounted the disadvantages of a third-grade education. Moran built a stable of oil and gas-related businesses that, at the time of his death in 1983, was expected to provide for the needs of his wife Louise and several dozen other family members, as well as employees of Moran's companies, for years to come.
The estate he left behind was valued at about $100 million, including some $65 million in liquid assets and the string of family businesses, primarily Moran Utilities, a natural gas provider in Conroe, and Morgas Pipeline Company, whose main asset was a strategically placed gas pipeline running north-south along Interstate 45. According to Moran's will, the estate was to be divided among his family, with roughly quarter shares going to his widow and daughter Betty Ann Franke, a 20 percent share to grandson Pat, and 3 percent shares to Pat's siblings Ann, Bill and Susan (the Morans' father, an alcoholic, had died young, and Pat and Ann Moran say they and their siblings were basically raised by their grandfather). William Moran also designated in his will that the employees of his companies were to receive 6 percent of the estate in trust for salary and pension guarantees.
In a miscalculation that laid the seeds for the coming conflict, the will designated three co-executors: Pat Moran, John McDonough, a Chicago lawyer married to Susan Moran, and First City Bank. According to Pat Moran, his grandfather had intended that he administer the family businesses after the old man's death. William Moran had also intended that the law firm of Hirsch & Westheimer handle probate chores. Up until the time of Moran's death, Vinson & Elkins lawyers had worked on business matters for Moran, but his close friendship with attorney Mark Westheimer had led him to designate Westheimer as chief probate counsel.
Westheimer didn't last long. After William Moran's death, Vinson & Elkins went to probate court on behalf of Louise Moran, challenging the structure of the will. At issue was whether it provided a marital deduction for Moran's widow. Because Westheimer might possibly have been a witness in the court proceedings, his firm was forced to withdraw from the probate work. V&E then assumed the lead role in providing legal service for the Moran estate.