Wednesday, April 11, 2007

Real Estate Law in the 2000s - The Fire Drill

As long as I indirectly mentioned the Blackstone/EOP deal earlier, I took a look today at the website for Blackstone's Real Estate Group. Impressive? Of course. One particular item that caught my eye was the group's touted (and, as I understand, actual) ability to close complex transactions in very short periods of time.

This trend can have its price for the real estate lawyer. When I was a young associate, I worked hard, but I used to look at wonder at the corporate transactional folks and the amount of time they would spend each day on a deal. When a deal was hot, they seemed to try to cram 25 hours into a 24 hour day.

The same is going on in real estate now to some degree. Many of my colleagues have become like the corporate guys, moving, as one puts it, "from one crisis to the next."

Many young lawyers, burdened by debt, will tolerate the hours because the money is, in a word, good, not to mention necessary to pay down debt. But are they practicing law? Yes, they are, but it is a different law than I learned. Others, however, are still looking for a balance, as evidenced by this report from Peter Lattman at the Wall Street Journal's Law Blog and by Law Students Building a Better Legal Profession. I like what these Generation Y people have to say, but I have my doubts as to whether any of it will become a reality.

This is NOT a slam at the private equity folks, whom I have worked for, with and against on so many deals. I admire and respect what they do and the amount of work put into each deal. They know how to create value. Nor is it a slam against lawyers working hard and making money. Speed is often an essential element of transactions these days, and we as lawyers just have to adjust by working more hours or throwing more bodies at deals. We just have to remember that everything comes with a price, not only for the PE guys (and their bonuses), but for the lawyers (whose bonuses are not in the PE league) as well.