Jenkens & Gilchrist
Encyclopedia
Jenkens & Gilchrist, P.C. was a Dallas-based law firm
. It was founded in 1951 as Jenkens & Bowens to service the various businesses controlled by Clint Murchison, Jr.
. Another early client was the Dallas Morning News. Due to the extent of the Murchison family holdings, the firm soon developed expertise in corporate transactions.
In the 1980s, the firm faced liability and financial difficulties caused by its involvement in the Savings and Loan Crisis
. Jenkens settled a number of malpractice lawsuits in 1987 for $18 million. In the 1990s, Jenkens embarked a period of intense growth, adding offices outside of Texas
for the first time to expand from a regional into a national law firm.
The opening of a Chicago
office with a team of tax attorneys from Altheimer & Gray
in 1998 was the most fateful for the firm. In 2000, the firm merged with Parker Chapin Flattau & Klimpl
to launch in New York City
. By 2001, the firm employed more than 600 attorneys and had reached its peak in size. In 2004, the firm advised Fossil, Inc.
in its $173 million secondary securities offering managed jointly by J.P. Morgan, Jefferies & Company and CIBC World Markets
.
advice to a variety of corporate and individual clients. This scheme involved writing opinion letters that the tax schemes were compliant with the tax code
. The tax group in Chicago received some $267 million dollars in the period of 1998–2003. The group worked in coordination with tax advisers at Ernst & Young
. The Internal Revenue Service
began investigating Ernst & Young and several tax payers in 2002. Eventually, it opened audits to many Jenkens' clients, who responded by filing malpractice lawsuits against the firm. In 2003, the IRS itself sued Jenkens & Gilchrist and amid the crushing potential liability of the lawsuits, the firm began to unravel.
As negotiations about settling with the government and other plaintiffs dragged on, partners with portable business began to depart. In 2005, the 90-attorney New York City office from legacy Parker Chapin defected to Troutman Sanders
. In 2007, the Los Angeles
office decamped to Baker & Hostetler. The remaining partners in the Chicago
office switched to Nixon Peabody
.
Finally, the firm agreed to settle its liabilities with the IRS and pay a $76 million fine, and agree to cease the practice of law effective March 31, 2007.
Some 100 attorneys in Dallas, Austin
and Houston found a new home at Hunton & Williams
. The San Antonio office moved to Texas
firm Winstead
.
Law firm
A law firm is a business entity formed by one or more lawyers to engage in the practice of law. The primary service rendered by a law firm is to advise clients about their legal rights and responsibilities, and to represent clients in civil or criminal cases, business transactions, and other...
. It was founded in 1951 as Jenkens & Bowens to service the various businesses controlled by Clint Murchison, Jr.
Clint Murchison, Jr.
Clint William Murchison Jr., was a businessman and founder of the Dallas Cowboys football team.A son of Clint Murchison, Sr...
. Another early client was the Dallas Morning News. Due to the extent of the Murchison family holdings, the firm soon developed expertise in corporate transactions.
In the 1980s, the firm faced liability and financial difficulties caused by its involvement in the Savings and Loan Crisis
Savings and Loan crisis
The savings and loan crisis of the 1980s and 1990s was the failure of about 747 out of the 3,234 savings and loan associations in the United States...
. Jenkens settled a number of malpractice lawsuits in 1987 for $18 million. In the 1990s, Jenkens embarked a period of intense growth, adding offices outside of Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
for the first time to expand from a regional into a national law firm.
The opening of a Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
office with a team of tax attorneys from Altheimer & Gray
Altheimer & Gray
Altheimer & Gray was a Chicago-based law firm, which operated from 1914 to 2003.It opened in 1914 as Altheimer, Mayer, Woods, and Smith. Founding lead partner Benjamin J. Altheimer was the son of Arkansas planter Louis Altheimer, who established Altheimer, Arkansas...
in 1998 was the most fateful for the firm. In 2000, the firm merged with Parker Chapin Flattau & Klimpl
Parker Chapin Flattau & Klimpl
Parker Chapin Flattau & Klimpl was a New York City-based law firm that practiced from 1934 to 2001, when it merged with Dallas-based Jenkens & Gilchrist. It was a prominent mid-sized New York firm, often called a corporate and securities boutique because of its highly-regarded middle market...
to launch in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
. By 2001, the firm employed more than 600 attorneys and had reached its peak in size. In 2004, the firm advised Fossil, Inc.
Fossil, Inc.
Fossil, Inc. is a designer and manufacturer of clothing and accessories, primarily watches and jewelry, but also sunglasses, wallets, handbags, belts, shoes and clothing, based in Richardson, Texas, United States...
in its $173 million secondary securities offering managed jointly by J.P. Morgan, Jefferies & Company and CIBC World Markets
CIBC World Markets
CIBC World Markets is the investment banking subsidiary of the Canadian Imperial Bank of Commerce. The firm operates as an investment bank both in the domestic and international equity and debt capital markets...
.
Demise of the firm
Jenkens & Gilchrist's Chicago office began a lucrative practice of offering tax shelterTax shelter
Tax shelters are any method of reducing taxable income resulting in a reduction of the payments to tax collecting entities, including state and federal governments...
advice to a variety of corporate and individual clients. This scheme involved writing opinion letters that the tax schemes were compliant with the tax code
Tax code
In the UK, every person paid under the PAYE scheme is allocated a tax code by HM Revenue and Customs. This is usually in the form of a number followed by a letter suffix, though other 'non-standard' codes are also used. This code describes to employers how much tax to deduct from an employee. The...
. The tax group in Chicago received some $267 million dollars in the period of 1998–2003. The group worked in coordination with tax advisers at Ernst & Young
Ernst & Young
Ernst & Young is one of the largest professional services networks in the world and one of the "Big Four" accountancy firms, along with Deloitte, KPMG and PricewaterhouseCoopers ....
. The Internal Revenue Service
Internal Revenue Service
The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...
began investigating Ernst & Young and several tax payers in 2002. Eventually, it opened audits to many Jenkens' clients, who responded by filing malpractice lawsuits against the firm. In 2003, the IRS itself sued Jenkens & Gilchrist and amid the crushing potential liability of the lawsuits, the firm began to unravel.
As negotiations about settling with the government and other plaintiffs dragged on, partners with portable business began to depart. In 2005, the 90-attorney New York City office from legacy Parker Chapin defected to Troutman Sanders
Troutman Sanders
Troutman Sanders LLP, founded in 1897, is an international law firm with more than 600 attorneys located in North America and Asia.On January 2, 2009, the firm merged with D.C.-based Ross Dixon & Bell, keeping and operating under the name Troutman Sanders...
. In 2007, the Los Angeles
Los Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
office decamped to Baker & Hostetler. The remaining partners in the Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
office switched to Nixon Peabody
Nixon Peabody
Nixon Peabody LLP is one of the largest multipractice law firms in the United States, with offices in seventeen cities in the United States, and in London, Paris, and Shanghai. It has more than eight hundred attorneys in twenty-five major practice areas...
.
Finally, the firm agreed to settle its liabilities with the IRS and pay a $76 million fine, and agree to cease the practice of law effective March 31, 2007.
Some 100 attorneys in Dallas, Austin
Austin, Texas
Austin is the capital city of the U.S. state of :Texas and the seat of Travis County. Located in Central Texas on the eastern edge of the American Southwest, it is the fourth-largest city in Texas and the 14th most populous city in the United States. It was the third-fastest-growing large city in...
and Houston found a new home at Hunton & Williams
Hunton & Williams
Founded in 1901, Hunton & Williams LLP is a US law firm that employs more than 800 lawyers. It has been called "one of the most well-connected legal and lobbying firms in DC." The firm was founded in Richmond, Virginia and has 18 other offices throughout the United States, Europe, and Asia. In...
. The San Antonio office moved to Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
firm Winstead
Winstead PC
Winstead PC is a national corporate law firm with offices in Texas and Washington, D.C. In 2010 the National Law Journal listed Winstead PC among the 250 largest law firms in the United States with 270 attorneys...
.