Editor: As Partner-in-Charge of Jones Day’s Pittsburgh office, what growth trends have you seen in your various practice areas? To what factors do you attribute the growth in the Pittsburgh office?
Ellsworth: The biggest growth over the past few years has been in our energy and transactional practices, driven by the tremendous oil and gas developments in the Marcellus and Utica shale. Pennsylvania now ranks second in the nation in terms of energy production and the Marcellus/Utica, which remains at the dawn of its development, is one of the largest shale plays in the world. From a geopolitical standpoint, recent events in the Middle East and Ukraine reinforce the national security interest in developing energy independence for this country. We are located within a day’s drive of 60 percent of the U.S. population and the location of a vast energy resource proximate to that percentage of the energy-consuming public presents the single best resource this country has to create true energy independence.
From a regional standpoint, the oil and gas industry and the related industries (like petrochemicals, construction and heavy manufacturing) present the opportunity of a generation. Much of the gas here is “wet gas,” meaning that it is a fertile source of raw materials for the petrochemical industry. Major companies like Shell and Braskem have announced the intent to pursue cracker facilities in this region. In the Philadelphia area, a major refining operation has been reborn, and LNG export facilities are on the table. And all this has thrown off tremendous infrastructure development work (the construction of transportation infrastructure, pipelines, processing facilities, residential development to house the influx of workers, and construction of corporate headquarters.) And all of that, in turn, has generated business for local industries for which this region has long been known, including steel, specialty chemicals and materials, sophisticated process equipment and the high-tech research from our world-class universities like the University of Pittsburgh and Carnegie Mellon University. Finally, because of a vast local source of energy, heavy manufacturing companies that have nothing to do with the oil and gas industry are beginning to gravitate to the region to take advantage of the huge energy savings available to them here. The legal work emanating from this involves everything from energy deals, commercial deals, construction and financing to employment, real estate and environmental issues. And of course when there is that much activity, there is inevitable litigation attendant to all of it.
Editor: How has the environmental issue attendant with hydrocarbon extraction been handled? Has there been any litigation as to environmental impact?
Ellsworth: There has been a lot of healthy communication between regulators and the industry that has been conducive to responsible development. In addition, our world-class universities play a critical role in developing trusted data that can inform the discussion. A lot of the fracking hysteria that we see elsewhere in the country is muted here because everyone at the table is able to work from the facts, not fiction. On issues of this nature, there is always litigation over environmental issues, but we have not seen an inordinate amount of that litigation.
Editor: How has the inflow of funds and the growth of related businesses affected the educational and cultural life of the region?
Ellsworth: The sheer tax revenues from the industry have been a tremendous boon to the state as a whole, including spending on education and the arts. One of the most beneficial aspects of the Marcellus revolution is that a lot of the development has occurred in rural areas of the state that have not traditionally experienced intensive development of educational and cultural assets. If you simply drive through the state, you can see for yourself the dramatic rise of new buildings, including schools, community centers, playing fields, libraries and museums. This impact is expected to grow exponentially as the development of the Marcellus accelerates over the next five years.
Editor: You have been instrumental in bringing actions in various complex litigation matters, including toxic torts, product liability, insurance, intellectual property, employment and ERISA – matters of national import. Why has the Pittsburgh office been the center of some landmark cases?
Ellsworth: For three reasons. First, the Pittsburgh region is home to a significant number of large international companies with highly sophisticated legal and business issues of global import – companies run by people of courage and principle who are willing to fight for what they believe in. Second, it’s because we are part of the macrocosm known as Jones Day. You’ve frequently written in this publication about the unique “one firm worldwide” culture of Jones Day, in which there is no such thing as “origination credit.” Because we are all evaluated on how we service clients, rather than how we source clients, our only financial incentive is to get the best lawyer on the matter at hand, wherever he or she may be located. As a result, there are no false silos and no “my client” issues that impede direct contact between client and the right lawyer for that particular project.
Sometimes this “geographic colorblindness” is initially perplexing to clients new to our culture. I was talking once to a prospective client in New York who said “Why would I want a Pittsburgh lawyer on this case?” and I said “Because I’m not a Pittsburgh lawyer. I’m a Jones Day lawyer.” That now-client and I often laugh together in retrospect at that response, but he now understands exactly what I meant. That takes me to my third point. Despite being part of a larger legal organism, we really all are Pittsburgh lawyers too. This town has a storied history of people who work hard, play hard, and take care of their own and each other. No frills. Just hard work. I think that’s why “Steeler Nation” is a concept that has caught attention around the world. Being tough. Working hard. Taking pride in what you do. Having an expectation of excellence. Doing rather than talking. You can’t live in this town without that culture becoming a part of who you are. And I think those qualities happen to create really good lawyers.
Editor: Would you mention some of the newsworthy cases that have been overseen by your office? What recent cases have been heard by the U.S. Supreme Court?
Ellsworth: As just a couple of recent examples, a Pittsburgh-based team represented a client in a $1.6 billion commercial dispute in the High Court of Justice in London, involving ownership of major oil concessions in Kurdistan, Iraq, for which Jones Day was named Dispute Resolution Team of the Year in February 2014 by the British Legal Business Awards. Pittsburgh lawyers also represent a European aircraft manufacturer in all of its high-profile product liability litigation across the country; lead a national team challenging the constitutionality of the HHS mandate as it relates to religious freedom; and are handling a landmark trial against the U.S. government for improper prosecution of individual speech rights in a case that has been twice to the U.S. Supreme Court.
Editor: Please share with our readers your insights as to the benefits conferred on the Pittsburgh region by the Allegheny Conference.
Ellsworth: I think the Conference is the “secret sauce” of this region’s economic rebirth. The Conference, for which I’m privileged to serve as vice-chair, was originally founded in 1944, when the scions of industry came together to address the pollution and flooding issues that then plagued this region. Today, people from communities all over the world come to Pittsburgh to see how we solved those problems, and they are astounded by the beautiful city that they find here. The Conference remains a body of the CEOs of the most significant companies in the region – not designees but the real people who run the real companies that drive the economy here. They come with their best ideas and resources and experience to collectively move this region forward.
Today, the issues are workforce development, government pension reform, reduction of economic disparity, responsible development of the energy sector, tax reform and the creation of a 21st century transportation system. Let me give you just a few examples of how the collective action of the corporate community is spearheaded through the Conference. This region has some communities that continue to struggle despite the strong and thriving economy we have here. Pennsylvania has a tax credit program, called the Neighborhood Partnership Program, through which companies can get a significant tax credit for investments in struggling communities. Through the Conference we organized a process whereby neighborhoods would submit funding proposals along with a business plan as to how they would use the money (which we vetted). We then organized the Conference members to make investments in an organized and concerted way pursuant to those business plans. As a result, we were able to raise over $11 million from the private sector to fund the economic development projects pursuant to plans that emanated from the communities themselves.
A second example is the creation of a site fund to develop pad-ready sites for companies considering locating here in the region. The number one reason that we were losing major development to other regions was that we had almost exhausted our inventory of pad-ready sites. To rebuild that inventory, we embarked on a major project whereby Conference members invest in these sites, with ROI built in, working collaboratively with government economic development agencies and foundations. Many regions talk about fostering public-private partnerships to solve important problems. Here, the Conference actually acts as “fosterer”– identifying opportunities and organizing the corporate community around them. Finally, the Conference addresses issues that are critically important to the economy but aren’t intuitive for many citizens – like pension reform, reduction of the Corporate Net Income Tax, and the phaseout of the Corporate Stock and Franchise Tax. We have a governor who understands the critical importance of these issues to our ability to attract and retain jobs here in the Commonwealth, but they are not the kinds of issues that constituents tend to raise with legislators, so the Conference plays an important role in the public discourse over these foundational economic issues.
Editor: You are very involved with Magee-Women’s Research Institute. Please describe its mission.
Ellsworth: MRI has the highest concentration of scientific researchers in the country working on women’s health specifically. The expression of disease is different in women than in men (for example, the signals of heart attack are different), and the chemistry of women is different as well (drugs tested only on males may impact females differently). Scientific research that allows us to understand the unique issues of women is an important next frontier in medicine, and MRI is uniquely positioned to lead that global effort through its world-class researchers, its affiliations with Magee Hospital (for clinical application) and the University of Pittsburgh Medical School (to train the next generation of researchers). Even more exciting, MRI is conducting research on pregnancy, designed to develop ways to treat people before they are born for the diseases of old age – for example, to correct the conditions that can lead to Alzheimer’s while the child is still in the womb, during the time of greatest developmental plasticity. That research advances the health not only of women, but of all humankind. MRI is a world-leader in this research and I believe will be the engine of an international movement to advance women’s health research around the globe in the years to come.
Published June 23, 2014.
