The Laundryman Cleans Up
Stephen Susman keeps winning and winning and winning
Published in 2005 Texas Super Lawyers magazine
By Jim Walsh on September 22, 2005
Steve Susman’s success — he’s among the most sought-after attorneys in the country — would be no surprise to any of his Yale classmates who knew him when he was waiting tables in the school’s dining hall. Susman hated the job and he soon found other, smarter ways to make money — and lots of it. Did his rich classmates want to go to Europe? Susman turned travel agent, chartering flights to Europe and getting Eurail passes for them. Too busy to do your own laundry? He ran a student laundry to do the wash for you — for a price, of course. Need to get ready for graduation? He leased out caps and gowns to his graduating peers.
Nearly 40 years later, the laundryman is a nationally renowned Houston-based trial attorney who has reeled in some of the biggest money judgments ever handed down in U.S. courtrooms. Susman not only is a brilliant litigator and an impressive strategist, he is that rare attorney who is also an excellent and creative businessman. He pioneered a whole new kind of fee arrangement that rewards trial counsel for results, not hours.
Even his firm’s specialty is entrepreneurial and original. When a lawyer has a case that’s going to trial, as the trial approaches the lawyer may find that things are not going well. This is when that lawyer might look to Susman Godfrey for help. Susman and his associates are experienced in taking over, at the eleventh hour, troubled cases going to trial. The lawyers that call them may have no trial experience, or may be up against a subject — often it’s anti-trust or intellectual property — about which they know little. Using this business model, Susman Godfrey has become one of the most profitable law firms in the nation.
And to think, it all started for Susman in those early dining-hall days at Yale. “I just didn’t want to wait tables any longer,” he says, smiling.
Early in his career, while teaching law for a semester at the University of Texas law school, Susman decided to give up practicing law altogether and teach full time. Until, that is, his late wife Karen gave him an ultimatum: “That’s fine,” she said, “but I’m out of here if you remain a law professor.”
“I said, ‘If I’m going to go back to the big city, it’s going to be for big stakes,’” Susman says. After researching successful lawyers, he decided to go into commercial litigation on a contingency fee basis with Mandell & Wright, of Houston.
Around that time, Susman got a call from a friend who’d been subpoenaed to testify before a grand jury in a price-fixing case involving the cardboard industry. They had lunch, where Susman learned about the case. He got information from his friend about the companies that were involved and what they did to get into trouble. After that he put the word out that he would be the plaintiff’s attorney in the case, for the company alleging damage from the pricefixing.
After that price-fixing case, which he won, making him a boatload of money, he took the attorneys he had assembled for the case and started his own firm. Shortly after that, Lee Godfrey joined Susman, and Susman Godfrey was formed. They’ve created a practice based on innovation, open communication and entrepreneurial savvy.
The heart of Susman’s philosophy is that every lawyer in his firm — from the most experienced partner to the greenest associate — should be rainmakers. Everyone is expected to be hustling for clients, cases and fees.
And they do.
Consider the month of May, when Marketing Madness takes over at Susman Godfrey.
That’s when every associate in the firm is judged not on cases, but on networking activity. They’re encouraged to spend money, to call lawyer friends and take them to lunch. They speak at events, go to CLE meetings and rub elbows with just about everyone who practices law, Susman says.
And they write follow-up letters, pitching Susman Godfrey to every small-firm attorney who might have a case so big that he or she may need help handling it somewhere down the road. The idea is that when a fat case — say for $3 million or more in damages—comes up for trial, all that ground work will result in a call to Susman Godfrey. After all, most of their clients are nuts-and-bolts attorneys, working in real estate, or on wills or in tax liability. When they get a big case outside their area of expertise, they want an experienced litigator who can ride in and win but who won’t take away their bread-and-butter business.
“We don’t piss off the existing law firm,” Susman says, adding that the original attorneys often sit second or third chair in his trials. The system works. Of their annual litigation, 98 percent comes as referrals from other lawyers. Even Susman still hustles cases.
“You have to keep letting people know you’re still out there and you’re still practicing law,” he says. “When people look to hire a trial lawyer, it’s whoever comes to mind first. I want to be the first one who comes to mind.”
Not that he has to worry. Susman has been on a lot of lawyers’— and clients — minds.
For every one of its 20 years of publication, The Best Lawyers in America has listed Susman in its pages. He’s been ranked among the 14 top trial lawyers in America and was named the top litigator in 1996 in a worldwide poll of attorneys. He’s consistently been among Super Lawyers’ top 10 most-voted-for attorneys.
He has won some of the biggest cases in U.S. history, including Samsung v. Texas Instruments, Inc., in which he won a $1.1 billion settlement on behalf of Texas Instruments; the $536 million jury verdict on counterclaim in El Paso Natural Gas Co., et al., v. GHR Energy Corp. and in the Corrugated Container Antitrust case, where he won a verdict for the plaintiffs, and the case eventually settled for $500 million.
In one of his recent cases, Susman won a $140 million California jury verdict for the plaintiff in the anti-trust case Masimo v. Tyco Health Care Group. Masimo makes equipment that measures a patient’s pulse and blood oxygen levels. It sued Tyco, alleging that Tyco has long held a monopoly and worked to keep Masimo and its related products out of the market.
“Watching Steve,” says Joe Kiani, CEO of Masimo. “I’ve noticed that he’s very hands-on. For his level of experience and success, I was surprised to see he prepares his own questions for his witnesses. He writes them, from the first draft to the end.”
Susman says he pays great attention to detail and can get up to speed on a case very quickly. Handling so many cases on such short notice, he says, requires that attorneys know some tricks of the trade. Don’t waste your time deposing expert witnesses; save it for cross-examination. Come up with an opening statement as quickly as you can to help create a blueprint for the case. And spend the time leading up to trial practicing. “We do lots of mock trials,” he says. “Putting on a trial is like a performance. It’s like an opera or a symphony or a play. It’s a production and you have to rehearse.”
But Susman is no flowery wordsmith in the courtroom. He gets right to the heart of the matter, in a direct and respectful style. Unless, of course, you’re an expert witness from the other side — then Susman’s a wolf and you’re raw meat.
“He doesn’t get caught up in the little things, making lots of objections over the small stuff,” Kiani says. “But if a witness wasn’t credible, he went after them. I saw, with one expert, he just shredded him to pieces.”
Susman’s approach even wins the respect of opposing counsel. Stephen Neal of Cooley Godward in Palo Alto, Calif., sat opposite Susman in the Masimo case (which Neal points out, is still in the process of appeal). “He’s very businesslike in the courtroom, low-key with no theatrics,” Neal says. “But his arguments to the jury can get pretty passionate.”
Neal said he’s heard of Susman for years and was “delighted” to be in a case with him. One of the strongest impressions he has of Susman, Neal says, is that he is a man who is true to his word, whether it’s in pretrial discussions or on major issues in the case.
“Unfortunately, there are people in this profession who are quite different,” Neal says.
Considering his niche as the last-minute ringer, Susman says he has had to come up with some basic guidelines to help his firm pick “winners” — cases that will be worth their time and trouble. For instance:
The case has to have the potential of making three times the hourly rate for the time Susman Godfrey will have to put into it. If a case would make $1 million in billable hours, Susman says, it needs to have the real potential to pull in $9 million in damages, since the firm would receive a third. Antitrust and intellectual property cases must be worth even more.
A case never gets better. “It always gets worse,” Susman says about the initial assessment. So it better seem pretty darn good, and stay that way, to stick with it.
Make sure you know all the documents you need from the client. If the paper trail doesn’t exist and isn’t accessible, the case isn’t worth taking.
Never take a case just because somebody said it’s going to be easy. “It never works out that way,” Susman says. Instead, see rules 1 and 2 above.
At age 64, Susman says he still loves his work, still loves being part of a firm where every lawyer has a vote in how the firm is run and no lawyer is above following the firm’s rules. For instance, they never charge a client when a lawyer flies firstclass. Even Susman, who flies on his own jet, bills the client for a coach fare only.
One of the continuing joys of coming to work, Susman says, is the opportunity to practice with his son Harry, a Susman Godfrey partner who lives two blocks from his father. Harry, like the elder Susman, attended Yale, won highest honors in law school, was editor of the law review and clerked for a U.S. Supreme Court justice (Stephen Susman clerked for Justice Hugo Black; his son clerked for Justice Anthony Kennedy).
“Everything I did, he wanted to do,” Susman says of his son. “And he did it better.”
“I told Harry to watch me,” Susman says. “I said, ‘When you begin to see me off my game a little, I want you to come up to me and say, ‘Dad, wouldn’t you and Ellen enjoy more time with the grandchildren in Aspen?’ Those are code words. But I’ll know what they mean.”
But Susman, married seven years now to his current wife Ellen, a television personality in Houston, has no plans to quit and hang out full-time with his five grandchildren just yet. Despite owning a home in Aspen, and buying another in Napa, Calif., Susman still loves the thrill of the courtroom, the thrill of riding in late and carrying off a winner, and the excitement of winning those big verdicts.
“Retire?” he says. “There’s too much I want to do.”
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