Business Week - How Business Trounced The Trial Lawyers
By focusing on litigation reform at the state level, business has won key battles. Suddenly, it's a tough time to be a plantiffs' attorney
In 1901 a well at Spindletop Hill sent petroleum shooting 200 feet in the air and made Beaumont, Tex., one of the first oil boomtowns. Decades later some locals tapped into a different kind of gusher: personal-injury litigation. Starting with highway and refinery accidents, and then moving to asbestos and tobacco, lawyers at the firm of Provost & Umphrey hauled in the kinds of fees that would make Wall Street lawyers drool.
But as is the case with oil in Texas, the easy money in injury lawsuits is gone. Thomas Walter Umphrey says the firm he co-founded in 1969 is downsizing. It's also prospecting in other fields of law to try to keep the business flowing. A couple of hundred miles to the north, in Daingerfield, plaintiffs' firm Nix Patterson & Roach is also pushing in new directions. "If today we were relying on personal-injury cases in Texas, we would be bankrupt," says partner Nelson J. Roach.
What has happened in Texas is not unique. In state after state, the tide has turned in one of the most protracted, hard-fought political struggles of the past two decades—the battle over so-called tort reform. Few other business issues have generated more controversy, polemics, and campaign spending than the effort to scale back the types of lawsuits people can file and how much they can recover. In a speech on Nov. 20, for example, Treasury Secretary Henry M. Paulson Jr. charged that "the broken tort system is an Achilles' heel for our economy" and exhorted his audience to tackle "one challenge that will take a concerted effort over the long term to correct—the need for reform of our legal system."