Pepper Hamilton LLP

3000 Two Logan Square
Eighteenth and Arch Streets
Philadelphia, Pennsylvania 19103-2799
U.S.A.
Telephone: (215) 981-4000
Fax: (215) 981-4750
Web site:http://www.pepperlaw.com

Limited Partnership
Founded: 1890 as Henry and Pepper
Employees: about 800 in 1999, including 350 lawyers
Sales: $125.5 million (1999)
NAIC: 54111 Offices of Lawyers

Pepper Hamilton LLP is a full-service law firm based in Philadelphia. As one of the 100 largest law firms in the United States, Pepper Hamilton is instrumental in helping small and large companies and other organizations resolve their legal issues in financial, intellectual property, regulatory, and other practice areas. It also represents American firms in their efforts to expand overseas, and similarly helps foreign firms expand to the United States. Pepper Hamilton maintains branch offices in New York; Detroit; Pittsburgh; Harrisburg, Pennsylvania; Berwyn, Pennsylvania; Cherry Hill, New Jersey; Washington, D.C.; Wilmington, Delaware; Tysons Corner, Virginia; and Princeton, New Jersey.

Origins and Early Decades: 1890-1945

Born in 1867 to an old and distinguished Philadelphia family, George Wharton Pepper is regarded as the founder of Pepper Hamilton. Pepper graduated from the University of Pennsylvania Law School in 1889 and the next year joined the Philadelphia firm of Bayard Henry, a small concern with modest offices on Walnut Street. Like many lawyers of his day, Pepper dealt with a wide range of legal issues, including estates, corporate concerns, and litigation. He would eventually become best known, however, as a constitutional lawyer, though his first case before the Supreme Court in 1894 was unsuccessful. Also in 1894, Pepper accepted a position as the Algernon Sydney Biddle professor of law at his alma mater University of Pennsylvania, a position he would hold for some 15 years. While practicing law, teaching, and serving on the boards of various legal and academic institutions, Pepper also found time to author several law reference books, including the Digest of Decisions and Encyclopedia of Pennsylvania Law.

In 1920, Pepper’s name was added to the law firm’s, now known as Henry, Pepper, Bodine & Pepper. Two years later, Pepper, a prominent Republican, was appointed to the U.S. Senate, filling the unexpired term of Boies Penrose, who died in office. In 1926, the firm’s original name partner, Henry, died, and Pepper lost his bid for reelection to the Senate. Thereafter he returned to Philadelphia to focus on the law firm.

During his distinguished career, Pepper argued many cases at the U.S. Supreme Court. He helped convince the Court, for example, that Federal League Baseball should be exempt from the 1890 Sherman Antitrust Act, as professional baseball was not involved in interstate commerce. Pepper also argued successfully in Myers v. United States (1926) and United States v. Smith (1932), two cases concerning the constitutional authority of the U.S. president.

Pepper’s most notable U.S. Supreme Court case occurred in 1936 when the court in United States v. Butler declared the 1933 Agricultural Adjustment Act (AAA) to be unconstitutional. (President Franklin Roosevelt had promoted the AAA as part of his New Deal to fight the Depression.) In 1938 Congress passed a modified AAA that created farm subsidies as a long-term program. By 1940, Pepper’s firm was known as Pepper, Bodine & Stokes.

Postwar Years

By the early 1950s, George Wharton Pepper had scaled back his involvement in the growing firm. Nevertheless, he continued to serve as chairman and attended weekly meetings, weighing in on philosophical issues and business matters until 1955. He died in 1961 at the age of 94. Among the firm’s most important work in the 1950s was its success in the Pierre S. duPont estate case, in which the Pepper firm represented the duPont estate in resolving the issue of in which state duPont had legally resided, since he had lived in both Delaware and Pennsylvania. The firm ultimately convinced the taxing authorities in Pennsylvania to end their claim to the estate, subsequently freeing up millions of dollars for charitable purposes.

This case and others were handled by John D.M. Hamilton. Earning a law degree from Northwestern University, Hamilton had served as the speaker of the Kansas House of Representatives and the chairman of the Republican National Committee in the 1930s and 1940s. After retiring from politics, he joined the Pepper firm. In 1950, Hamilton started the law firm’s pro bono tradition by representing Harry Gold, a colleague of the infamous Rosenbergs, who had confessed to spying for the Soviet Union. Gold, who had provided the Soviet Union with secrets regarding the U.S. atomic energy program, wanted a lawyer without leftist leanings to represent him. “The court appointed Hamilton, who was about as far from the left as you could get,” said Augustus S. Ballard, Gold’s co-counsel, quoted in the Legal Intgelligencer of January 2000. Gold was ultimately sentenced to prison and released on parole with the help of Hamilton. In 1955, Hamilton took over the position of chairman from Pepper.

In 1954 the Pepper law firm merged with the Philadelphia firm of Evans, Bayard & Frick to create Pepper, Bodine, Frick, Scheetz & Hamilton. The Evans firm had been founded by the prominent attorney John G. Johnson, who had argued 168 cases before the U.S. Supreme Court, including famous antitrust cases defending the sugar industry, the railroads in the Northern Securities Case, the Standard Oil Company, and U.S. Steel Company. Ralph Evans took over the Johnson partnership in 1917 and under his leadership the firm represented The Bell Telephone Company of Pennsylvania, Gimbel Brothers, Lukens Steel Company, N.W. Ayer Advertising Agency, The Curtis Publishing Company, the Philadelphia Inquirer, and The Travelers Insurance Company. Francis H. Scheetz was at the helm of the Evans firm when it merged with the Pepper firm in 1954. The merged firm of 35 lawyers moved to the Philadelphia headquarters of one of its clients, The Fidelity Bank.

Another merger ensued in 1960, when the Pepper firm joined with Moffet Frye & Leopold, a firm that had been tapped to help incorporate the Sun Oil Company in 1902. The growing ranks of the firm, now renamed Pepper Hamilton & Scheetz, included Roberta P. McKinney, the firm’s first female partner,and a rare occurrence for any law firm at the time. In the early 1960s the firm began representing Westinghouse Electric Corporation, some Westinghouse officers, and the H.K. Porter Company in antitrust cases. According to the Pepper law firm’s published history, “These were the first cases involving allegations of price fixing which demonstrated the potential for jail terms for those found in violation of the antitrust laws.”

In 1963 Pepper attorney Phil Strubing represented The Curtis Publishing Company when it was sued by Wally Butts, the University of Georgia athletic director, and University of Alabama football coach Bear Bryant. The men sued for libel in the U.S. District Court in Atlanta, Georgia, after The Saturday Evening Post published an account of what the two coaches considered a private phone conversation allegedly involving game fixing. The district court ruling for Butts was upheld by the U.S. Supreme Court in Curtis Publishing v. Butts (1967). Although Strubing and the firm ultimately lost the case, the firm regarded its work as helping to clarify several issues surrounding libel law.

Also during this time, the Pepper law firm began its product liability practice when it defended the manufacturer of thalidomide, a drug that became well-known for causing serious birth defects. Mergers and acquisitions were another practice area enhanced during this time, particularly through the firm’s representation of the Sun Oil Company when it merged with Sunray DX Oil Company.

Firm Expansion and Practice: 1969-89

In 1969, the Pepper law firm moved outside of Philadelphia for the first time, opening branches in Harrisburg, Pennsylvania, and Washington, D.C. Two years later attorney Strubing was named chairman of the firm. The Pepper law firm’s expansion in the late 20th century reflected a general upward swing in the legal profession as a whole. Many new laws and government regulations, including the 1964 Civil Rights Act and the environmental protection laws of the 1970s, created a need for more legal assistance. Moreover, the growth of the economy, especially in the 1980s, would lead to company start-ups, particularly in high-tech fields, with the personal computer revolution, further increasing the demand for lawyers.

Meanwhile, the legal profession was transformed by two developments in the 1970s. First, the U.S. Supreme Court ruled that professional associations’ restrictions on advertising violated the First Amendment’s guarantee of free speech. Advertising thus increased among lawyers and other professionals, sparking increased competition. Second, two new periodicals, The National Law Journal and The American Lawyer began publishing articles concerning law firm finances and management. This also stimulated competition among the largest law firms, who vied for the best lawyers and began hiring public relations experts.

Company Perspectives:

We counsel each client as if it were our only client. We commit our combined skills and experience to solve client problems, exercise objective and independent judgment consistent with the highest ethical standards, join with clients to identify and achieve their objectives, and focus always on adding value with efficiency and enthusiasm. Our most valued resource is our people. We recognize that each individual’s success depends on the individual and collective efforts of our colleagues —past, present and future. Accordingly, we value service, trust, interdependence and collegiality.

In the 1970s the Pepper law firm represented Volkswagen, first in product liability litigation in 1973 and then in 1976 when the German manufacturer built a Pennsylvania plant at which to manufacture its VW Rabbit. According to the firm’s history, “Volkswagen was the first foreign automobile manufacturer to establish an assembly facility in the United States,” so the law firm faced several new legal challenges. This occurred after the 1973 Arab oil embargo increased oil prices, which in turn stimulated the demand for fuel efficient cars like the VW Rabbit.

When Strubing retired in the mid-1970s, he was succeeded by Augustus (Gus) Ballard in 1974. Ballard oversaw a greater expansion of the firm’s national presence, with offices opening in Detroit in 1979, as well as in Berwyn, Pennsylvania, and Wilmington, Delaware in the 1980s. The firm’s first overseas office was established in London in 1987 under the leadership of new chairman John G. Harkins, Jr. Moreover, the firm established an affiliate, called Pepper International Associates, to oversee activities in Chinese trade and investment. (That business consulting operation would end in the mid-1990s.)

The 1970s were also highlighted by several prominent cases for the growing firm. In 1975 it was involved when Congress created Consolidated Rail Corporation (Conrail) as a government-owned entity to take over bankrupt northeastern railroads. In the early 1980s the firm again played a major role when Conrail was privatized and made its initial public offering. These developments started the Pepper law firm’s transportation practice that became one of its major areas of emphasis. Following the 1979 accident at the Three Mile Island nuclear power plant in Pennsylvania, the Pepper law firm represented liability insurers against thousands of claims. Class action settlements were reached, but many individual claims were being litigated in the early 1990s. After a November 1980 fire in Las Vegas’ MGM Grand Hotel killed 87 people and injured over 1,000 people, the Pepper law firm was one of over 300 firms that got involved. Pepper defended the Taylor Construction Company that had managed the hotel’s construction. It succeeded in getting all the federal cases transferred to the Las Vegas district court, employed 15 lawyers and several paralegals to prepare for trial, and then helped negotiate settlements for 99 percent of the plaintiffs. The Pepper firm’s history booklet described it as “one of the most interesting, demanding engagements in the firm’s history.”

In 1986, John G. Harkins, Jr., became chairman of the firm. Under his leadership, the firm continued to expand the scope of its practice and expertise. In 1988 property insurance companies faced multiple lawsuits charging them with antitrust violations involving excessive prices and drastically reduced liability coverage. In response, Aetna Casualty & Surety Company recruited four outside law firms, including Pepper Hamilton & Scheetz. Aetna at the time also used the Philadelphia law firm to defend itself in a Dalkon Shield lawsuit in U.S. District Court in Virginia. The Dalkon Shield was a defective intrauterine birth control device that led to numerous product liability lawsuits and the bankruptcy of its manufacturer, A.H. Robins Company, Inc. of Richmond, Virginia. The Pepper law firm helped resolve these complex lawsuits and made it possible for Robins to be acquired by a pharmaceutical company.

The 1980s was famous for its many corporate mergers and acquisitions, and the Pepper law firm played a role in that trend. For example, in 1980 it “assisted one of the earliest preemptive strikes in corporate takeovers,” according to its history booklet. The Pepper firm represented Sun Oil Company, one of at least seven companies that were interested in buying the Texas & Pacific Corporation from the Canadian Seagrams Company. Instead of waiting for the normal methods to occur, Sun Oil with the law firm’s help took the initiative and made a preemptive strike by offering Seagrams an attractive price of $2.3 billion, which Seagrams accepted.

In 1988 the Pepper law firm represented the Swiss manufacturer Schindler Holding AG when it acquired the Westinghouse Elevator Company from the Westinghouse Electric Company. Over 60 Pepper lawyers and legal assistants helped in the complex deal.

The 1990s and Beyond

In 1992, Chairman Harkins and Paul A. Cunningham, former managing partner of the Washington, D.C. office, left to form their own firm of Harkins Cunningham. Six other Pepper Hamilton partners also joined the new firm that had offices in Philadelphia and Washington, D.C. At that time, the firm restructured, forming a ten-member executive committee led by an executive partner elected by the firm. Moreover, the firm ventured overseas in 1992, establishing an office in Moscow. The firm’s first foray abroad had occurred five years earlier, when it opened a London office.

Key Dates:

1890:

G.W. Pepper joins the law firm of Bayard Henry in Philadelphia.

1900:

The firm is renamed Henry, Pepper, Bodine & Pepper.

1922:

Pepper is appointed to the U.S. Senate.

1928:

Pepper returns to the law firm.

1954:

Hamilton joins the firm, which merges with another Philadelphia firm, becoming Pepper, Bodine, Frick, Scheetz & Hamilton.

1960:

Firm merges with Moffett, Frye & Leopold and is renamed Pepper Hamilton & Scheetz.

1969:

Firm moves outside of Philadelphia for the first time, with branches in Harrisburg, Pennsylvania, and Washington, D.C.

1979:

An office in Detroit is established.

1990:

An office in New York City opens.

1992:

The firm is restructured, forming a ten-member executive panel.

1997:

The firm becomes a limited liability partnership (LLP) and shortly thereafter shortens its name to Pepper & Hamilton LLP.

This focus on a global presence was curtailed in the late 1990s, when offices in Moscow and St. Petersburg were shuttered. Many American law firms had opened offices after the former Soviet Union disintegrated in 1991, but high rents and other factors caused some to withdraw. “Given the uncertainty of the business and political climates, we decided some months ago that it did not make economic sense for us to continue to maintain offices in the region,” said Pepper Hamilton Executive Partner James Murray in East European Business Law of February 1998. The firm’s withdrawal left London as its only international office, and that office was soon closed as well. Nevertheless, the firm continued to grow, establishing a new office in Pittsburgh in 1995.

Moreover, in an era of numerous law firm mergers and a more globalized economy, Pepper Hamilton formed alliances with two U.K. law firms. In 1995 it signed a nonexclusive agreement to collaborate with Eversheds, a large firm with 12 British offices. Then in 2000 Pepper Hamilton and the U.K. firm McGrigor Donald began a close association to benefit their increasing number of clients with international dealings. Founded in 1792, McGrigor Donald included more than 210 lawyers practicing in Edinburgh, Glasgow, London, Belfast, and Brussels. Effective January 1, 2001, Pepper Hamilton merged with Jamieson Moore Peskin & Spicer of Princeton, New Jersey. Some 20 Jamieson Moore lawyers who worked in land use, government relations, banking, corporate securities, commercial litigation, trusts and estates, and ERISA joined Pepper Hamilton, bringing with them clients such as New Jersey Bankers Association, Janssen Pharmaceutical, and various high-technology firms. Some Jamieson Moore lawyers joined other law firms as the firm founded in 1927 dissolved.

During the late 1990s, the firm became a limited liability partnership (LLP) and shortened its name to Pepper Hamilton LLP. According to the American Lawyer roster of the nation’s 100 largest law firms, Pepper Hamilton ranked number 91 based on its 1997 gross revenue of $101.5 million. The following year, gross revenues grew to $109 million, though in the face of stiff competition its ranking on the American Lawyer list slipped to 99. In 1999 the firm brought in $125.5 million, a 15.1 percent increase over the year before.

As the 21st century began, Pepper Hamilton faced numerous challenges. To remain competitive, Pepper Hamilton offered starting salaries of $100,000 to new law school graduates. Retaining the long-term loyalty of good lawyers was a major goal. Pepper Hamilton’s 110-year history and good reputation gave the firm a solid foundation to move ahead.

Principal Competitors

Morgan, Lewis & Bockius; Dechert Price; Skadden, Arps.

Further Reading

Austin, James, “Pepper Hamilton,” Legal Intelligencer, January 2000.“Coudert Wins Pepper Hamilton Offices,” International Financial Law Review (London), March 1998, p. 4.

Devine, Jay, “Partners in Pepper Hamilton to Form Separate Firm,” PR Newswire, September 17, 1992, p. 1.

Friedman, Lawrence M., Crime and Punishment in American History, New York: BasicBooks, 1993.

Galanter, M., and T. Palay, Tournament of Lawyers: The Transformation of the Big Law Firm, Chicago: University of Chicago Press, 1993.

“Law Firm Update,” East European Business Law (London), February 1998, p. 15.

A Proud Tradition: Pepper Hamilton & Scheetz Since 1890, Philadelphia: Pepper Hamilton & Scheetz, 1994.

Rainey, Doug, “Pepper, Hamilton Adds Operation in Russia,” Delaware Business Review, October 5, 1992, p. 24.

Stone, Peter H., “Insurance Companies on the Defense,” San Francisco Chronicle, April 18, 1988, p. B3.

“Watching Brief,” International Corporate Law (London), February 1995, p. 12.

—David M. Walden