According to a Sara Randazzo May 13 article for American Lawyer, Jones Day has emerged victorious in their bid to represent the Motor City for the following its recent bankruptcy filing. Facing more than $15 million in long term debt obligations, Detroit Mayor Dave Bing announced on March 11 that Jones Day would serve as the city’s primary restructuring counsel.

Randazzo notes that while Bing’s announcement may have seemed “ho-hum”, the selection process which ultimately landed Jones Day at the top was anything but simple. The selection process involved 14 total firms, with 9 from the AmLaw 200. After sending out an RFP (which can be viewed here) and hearing an official pitch from each firm, Detroit evaluated their potential suitors based on an elaborate 24-point scoring system with the highest scoring firm being the one the city would hire. The rankings system included rewarding firms for deep ties to Detroit and Michigan, along with points given for “experience with large debtor-side bankruptcies, Chapter 9 municipal bankruptcies, and public finance work; and the potential for conflicts to arise if it took on the assignment.” The final rankings shook out as follows:

1. Jones Day, 21 points
2. Foley & Lardner (with Klee Turchin), 20 points
3. Miller Canfield (seeking local counsel role only), 19 points
4. Orrick Herrington, 19 points
5. Dykema Gossett, 18 points
6. Sidley Austin, 18 points
7. McKenna Long & Aldridge, 17 points
8. Weil Gotshal & Manges, 17 points
9. Lewis & Munday, 14 points
10. Skadden Arps, 14 points
11. Butzel Long, 12 points
12. Plunkett Cooney, 12 points
13. Jaffee Raitt (seeking local counsel role only), 10 points
14. Stutman Treister & Glatt, 9 points

Size and experience proved to be what separated Jones Day from the pack. According to Randazzo, Jones Day’s 209 page winning proposal “highlighted the firm’s extensive experience on bankruptcy assignments, as well as its expertise in municipal finance, public-private partnership, governmental entity representation, labor, employee benefits, and public pension work.” Jones Day was also the largest firm to submit a bid, thus the firm was able to leverage their 2,400 lawyers and highlight the advantages they felt they maintained due to their resources and capabilities. The proposal listed more than 100 representative clients and detailed many of the bankruptcy matters the firm has handled previously, including:

• Chrysler’s Chapter 11 case
• Derivatives counsel in the Lehman Brothers bankruptcy
• Counsel to Hostess Brands
• Special labor counsel in the General Motors bankruptcy
• Experience of many of their lawyers representing Orange County in its bankruptcy, though that work came before those lawyers joined Jones Day

The agreement reached includes a 3-phase fee structure for $3.35 million, where Jones Day will charge less at each stage than the amount expected to be billed: “$1.125 million for an initial analysis; $1.9 million for planning; and up to $575,000 per month during the implementation phase. Any litigation, major transactions, or internal investigations were to be billed hourly in addition to these estimates.”

The legal market in America’s 4^th largest metropolis continues to grow and grow steadily. Numbers for the first 2 quarters of 2013 show sustained levels of lateral movement and firm expansion. This growth, as a May 13 article by Tom Huddleston Jr. of American Lawyer indicates, comes on the heels of several years that have already been quite busy—tied in large part to the booming energy, intellectual property, corporate, litigation and L&E industries, and more.

Wanting to get in on the action, many firms have continued to press forward with new office openings. This includes Katten Muchin last month, as they became the most recent firm to announce an opening. Katten’s Houston office will be led by former Pillsbury Winthrop workplace safety and environmental partner Mark Farley, who will be joined by 3 associates along with Tom Kiehnhoff, a former assistant US attorney. Farley has been with Pillsbury since 2008, and before that had been with Baker Botts. According to Farley, he and his team spoke with a number of other interested firms before ultimately deciding to open with Katten in Houston. Says Huddleston regarding the opening, “Katten became the 11th Am Law firm to establish a presence in the city since 2010—and the third to do so this year (K&L Gates and Reed Smith both launched Houston offices in February).”

According to the article, it is estimated that more than 40 partners have moved through the first 2 quarters already this year. Moreover, Q1 2013 represented a 30% increase in lateral moves as compared to the majority of individual quarters dating back 3 years to 2010. Huddleston goes on to mention that not very surprisingly, many of the laterals that are moving are landing with some of the newest firms in town. For example, just last week Reed Smith hired 2 partners away from Jones Day—this coming only 2 months after welcoming a partner from Fulbright & Jaworski in March, and opening its office shortly before that with a mixture of 12 partners from a variety of firms. K&L Gates also opened a Houston office in February, and recently added 4 more partners including Haynes and Boone energy partner Anthony Newton and Fulbright corporate partner Charles Strauss, with Strauss to manage the office.

Other firms making notable recent moves in Houston include Paul Hastings, which opened an office in April, Sidley Austin, which opened in February, Winston & Strawn, who hired away litigator Paul Hinton from Vinson & Elkins, and Mayer Brown, who brought on a V&E partner of its own—Ed Osterberg, an energy tax partner that had been with V&E for nearly 30 years. According to Huddleston, “Several other firms are thought to be considering a move to Houston, according to a source familiar with the market, including: Allen & Overy, Gibson Dunn, and Willkie Farr, among others.”

Clearly the legal market in Houston is still buzzing. The time appears to be now for firms considering opening an office to get a piece of what appears to be a large, expanding, Texas-sized pie.