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Smoking's Big Guns

Shook, Hardy & Bacon is leading defender and chief strategist for a tobacco industry under siege


KANSAS CITY, Mo. — The tobacco industry has mobilized scores of talented law firms to fight an unprecedented siege of mega-lawsuits. But none of tobacco's defenders is as busy, nor relied on as heavily, as this city's Shook, Hardy & Bacon.

Shook, Hardy has been defending tobacco companies for nearly 40 years and has been instrumental in preserving the industry's near-perfect courtroom record. In the process, it has become one of the great success stories in U.S. corporate law--a small firm of self-styled country lawyers that lucked into an early tobacco case, won in impressive style and grew into a 300-lawyer powerhouse.

Even though it has other Fortune 500 firms as clients, Shook, Hardy is virtually synonymous with the $50-billion-a-year tobacco industry, whose vast wealth and endless legal problems have fueled its tremendous growth.

Whereas most tobacco law firms have served a single company, Shook, Hardy has defended four of the top cigarette makers at one time or another--and counts three among its clients in the current legal onslaught by state attorneys general and private lawyers.

"They are the no-holds-barred representatives of the tobacco industry," said consumer advocate Ralph Nader on a recent Kansas City radio talk show. "They take no prisoners."

"They're the fountainhead in terms of the [industry's] defense strategy," said Russ Herman, a New Orleans attorney involved in suits against the industry. "They've been at it longer, they do it better, they have exceptional lawyers in terms of their courtroom skills."

Shook, Hardy's notoriety has spread to the literary world, inspiring the mythical firm of Smoot, Hawking in the satirical novel "Thank You for Smoking." (Smoot, Hawking's watchword: "Smoking is the nation's leading cause of statistics").

Shook, Hardy's trajectory in some ways parallels that of its biggest client, Philip Morris. A minor player in the industry when it first hired the firm, Philip Morris grew into the world's biggest cigarette maker. Though it has diversified into food, beer and real estate, tobacco has remained its profit center.

Shook, Hardy has also diversified, and boasts such non-tobacco clients as Upjohn and Eli Lilly, but tobacco still pays for the partners' big houses and expensive cars. Although Shook, Hardy won't divulge financial data, tobacco accounts for roughly half its billings or more, former lawyers of the firm say.

Its ties to the industry transcend the courtroom. Former partner Steve Parrish is now senior vice president for corporate affairs

at Philip Morris, and Chuck Wall, another Shook, Hardy alum, is the tobacco company's deputy general counsel.

Shook, Hardy has been called on to teach the gospel to new industry hires, including those who deal with the public and the news media. The industry line: Smoking is strictly a personal choice, and there is still doubt about whether it actually causes illness.

The firm has also been involved in managing several industry-funded scientific research projects--a controversial role for a law firm. Critics say that by shaping the research, Shook, Hardy worked hand in glove with the industry for decades in trying to suppress the truth about the consequences of smoking.

Shook, Hardy, which has denied these charges, nonetheless finds itself in the rare position of being sued along with its clients. A handful of the lawsuits charging the industry with fraudulently concealing the risks and addictiveness of smoking have also named Shook, Hardy and two other law firms as alleged co-conspirators.

One of the suits, filed in August by Oklahoma's attorney general, called Shook, Hardy an "aider and abettor" of fraud.

'Nothing Sinister'

At One Kansas City Place, the sleek office tower where Shook, Hardy occupies 12 floors, senior attorneys say they have done nothing more than faithfully represent their clients. In the words of one partner, "There's nothing sinister" about it.

Shook, Hardy lawyers acknowledge that the firm cannot be a defendant and represent tobacco firms in the same case--and thus must step aside unless they can get the firm dismissed. Senior partner David K. Hardy called the suits a ploy "to separate the law firms from their clients" and said they won't succeed.

Hardy, 52, is chairman of Shook, Hardy's 100-lawyer tobacco division. As the son of the late David R. Hardy, who attained near legendary status in tobacco litigation, he is a man with big shoes to fill.

When a wrongful-death case against four tobacco companies went to trial in Indianapolis in August, the younger Hardy led the counterattack. Each company had its own legal team, but Hardy became the consensus choice to serve as lead trial lawyer. The jury ruled in favor of all defendants.

Not all Shook, Hardy lawyers consider tobacco a plum assignment. Some have begged off tobacco defense work, citing the heavy travel demands. But moral pangs, if any, are "never discussed in the firm," one former partner said. "You don't buck tobacco."

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