Press Release March 23, 2012

Goodwin Procter at 100: Highlights from the First 25 Years

As Goodwin Procter celebrates its Centennial in 2012, we are pleased to share stories from our history. They form the foundation of who we are as a firm, and inspire us to continue our work in applying and shaping the law to ensure a bright and productive future for our clients.

Goodwin’s First Hires – 1913

With an office established in a small suite on the fifth floor of Boston’s India Building at 84 State Street, Goodwin & Procter’s caseload began to grow, and so did the fledgling firm.

The founders hired their first associate in 1913 - a Harvard Law School graduate - Harris H. Gilman. He started at $15 a week, the same salary as the firm’s secretary. Gilman assisted the partners until he was called to serve in World War I, but he later returned to the firm and became a partner in 1922.

Arthur Ballantine, also a Harvard Law School graduate, almost joined Goodwin and Procter when they founded the firm but opted instead to work on the Federal Income Tax legislation of 1913. Ballantine later reconsidered and joined the firm in 1914, when it was renamed Goodwin, Procter & Ballantine, one of several names changes the firm would undergo in its 100 year history.

Ballantine would be called to Washington, D.C. to serve in the U.S. Revenue Bureau’s Legal Department during World War I, relocating to New York City to join another firm after the war.

The Firm Overcomes Its First Challenge – 1914

Like any start-up, the partnership faced many challenges over its first few years. One of the firm’s earliest and most critical tests came in 1914 when Goodwin &  Procter helped a sardine packing company headquartered in Maine issue some preferred stock.

With no federal Securities and Exchange Commission and only minimal oversight by state authorities, regulation was much less rigorous in 1914 than it is today. Accordingly, the client’s prospectus consisted of a sales circular with a brief description of the new company and its business, a balance sheet and some language about the provisions protecting preferred stock. Goodwin and Procter were listed as legal counsel and a Boston bank as the company’s transfer agent. Everything looked to be in order as the stock went on sale.

A few days later, though, Procter discovered that the figures listed in its prospectus were false. He quickly called the issuing bank to halt sale of the stock, but $30,000 worth had already been sold. Procter called in Goodwin to decide how to respond and the partners were in immediate agreement.

Facing the crisis squarely, they borrowed $30,000, secured by their own personal assets, and bought back all outstanding shares at face value. The loan far exceeded the firm’s annual income, but throughout their partnership together, both Goodwin and Procter would affirm their decision as one that established the ethical standard to which they always held their firm.

“It was the best thing Joe Procter and I ever did in our twenty-year association,” Robert Goodwin said later. “We forged a definite standard of professional integrity, and nailed it to the mast of our little ship.”

War Breaks Out - 1917

A far greater challenge engulfed the young firm when World War I began unfolding overseas. Even before the United States joined the war, the outbreak of shooting in Europe inspired Goodwin to take a commission in the Massachusetts National Guard. When the United States did join the Allied cause in 1917, he joined the country’s vanguard deployment in France under General John “Black Jack” Pershing.

Other departures soon followed. Ballantine was called to Washington, D.C. to serve in the U.S. Revenue Bureau’s legal department. Junior associates left too as they were pressed into military service. By 1918, Joe Procter was running the office with only two other hands and a pair of trial lawyers hired temporarily to manage the work.

On the battlefield in Europe, the fighting was brutal, bloody and relentless. At the Battle of Marne (both the first and the second rounds) and Verdun, Goodwin encountered the slaughter and squalor of trench warfare. Yet he served with skill and valor, rising through the ranks from captain to major to colonel, eventually assuming command over the 101st Field Artillery.

Goodwin excelled at preserving the lives of his men. In later years, when asked how he had managed to keep so many of “the lucky 101st” alive, his response was revealing. “We played the game every minute,” he explained. “Our men were foxy in switching batteries when they had been observed. The cannoneers became so skillful that they fed their 75’s on the recoil – 44 shots a minute – something our French instructors thought was impossible.”

After the campaign, Goodwin was awarded the Distinguished Service Medal for his “high standards, exceptional ability, sound judgment, unflagging energy and extraordinary activity”— traits he would instill in the firm as he propelled it to greater achievements. He would ever after affectionately and respectfully be referred to as “Colonel Goodwin.”

Weathering the Great Depression – 1930s

A decade of prosperity and expansion began to deteriorate on October 24, 1929, when share prices on the New York Stock Exchange started falling. What began as financial retreat quickly turned into a panic. As the calamity spread, thousands of American banks went under and countless businesses collapsed. Clients were truly frightened,” remembered one Goodwin Procter partner who joined the firm during these dark years. There was not much law business; everyone was scrambling for work.

It would be more than 10 years before the United States fully emerged from the Great Depression. When it did, the business landscape surrounding Goodwin Procter would be forever altered. To survive the 1930s, the firm had to find new clients, new areas of expertise and capabilities that would, over time, become the basis of new strategic footing.

At least initially, Goodwin Procter fared better than most firms. Liquidation cases provided a surge of business. Many arrived via Arthur Ballantine, the former partner who as Under Secretary of the Treasury channeled complicated bankruptcy and equity receivership work to the firm. Unwinding the Boston Continental Bank, for example, occupied several junior lawyers for years. “That kept us alive,” partner Dick Nichols later recounted. “We were small and had those potboilers that kept us all there.

As the firm made its way through turmoil and turnover, the outlines of a new firm began to form. Goodwin Procter’s work during the 1930s would be essential for future growth. As the firm’s lawyers helped clients work through the implications of a surge of federal regulation brought on by the New Deal, and as they cultivated work among Boston’s burgeoning trust and money management industry, they began nurturing increasingly sophisticated skills and capabilities. They began learning how to handle highly complex financial transactions and instruments. And they began to get very good at the work. In coming decades, these early efforts would prove pivotal for the firm’s ability to diversify and pursue growth opportunities in many industries.

Stay tuned throughout the year to learn about centennial events and initiatives across the country that will be open to Goodwin Procter alumni