Wednesday, September 1, 2010

Picking a real estate lawyer - bigger isn't always necessarily better

I was reading Shopping Centers Today (the ICSC's member magazine) last night and enjoyed reading the lead article, a piece on lessons learned by developers that left them wiser.

But then I read one of the tales, from Bob Champion, a well-respected Southern California developer whose company rings a bell in my head, though I can't recall having done any deals with it.  Champion recounted a story where he received legal advice on rehabbing a historic building.  Apparently, the advice was to the effect that his project would be exempt from the Americans with Disabilities Act (and though not stated, perhaps also its stricter, as I recall, California counterpart). It turned out that the city decided the property did have to comply and it cost him. Ouch.

Now, this is just an anecdote in a magazine article, so I don't know whether anyone reached out to the city (the first thing I would have done), whether the decision was litigated (if it fact it could be) or any of the other facts. But I was somewhat surprised at the lesson learned. Why?  The story says Champion circled back to the law firm to advise him to complain, only to find that it had disbanded. So..."The lesson? 'Always use top attorneys and substantial firms for your work,' he said."

I agree 100% with the first part of the advice but not the second.  You should always use a good lawyer. That ought to almost go without saying.  There's plenty of good ones out there.  But the second part of the advice troubles me.  What is a "substantial firm" these days?  Let me make the following observations:

  • By "complain," does this mean making a malpractice claim or just reaching out to the lawyer who advised him? I don't know, but just because the firm dissolved does not mean the lawyers is gone or that there isn't insurance coverage somewhere.  Of course, one thing any "top" lawyer knows is that dealing with any government entity on an issue of this import is often a crap shoot. 
  • Yes, non-substantial (small?) firms dissolve, but do so "substantial" ones.  Ask people once at Heller Ehrman, Jenkens & Gilchrist, Brobeck, Phleger & Harrison, Coudert Brothers, Altheimer & Gray or Keck Mahin & Cate, just to name a few that I have seen tank during my career.
  • "Top" lawyers simply are not always at "substantial" firms, and sometimes "substantial" firms don't have "top" lawyers in the field in which you need advice.  Take Joshua Stein: He is certainly a top real estate lawyer by any measurement.  And until a month ago he was at a most substantial (and outstanding) firm: Latham & Watkins. But he started his own practice.  Why?  According to this piece for Stein it came down to certainty and predictability on rates for clients. (I assume he might be doing some flat fee work on deals, something I also like to do.)  And he is not alone.  There are people who want more control over hours, lifestyle and running a practice than you might be able to get at at a "substantial" firm.  (This is not a knock on BigLaw, by the way.  It has its time and place and need and I'm glad they are around.  I like many just had enough.)  And sometimes, especially in niche area like zoning/land use and the ADA, to name two, smaller firms specializing in that area might just be the ticket.
I'm not blaming or knocking Mr. Champion for wanting to work only with top lawyers and substantial firms.  It is his prerogative.  But I do think that sometimes you have to think more about who the lawyer is more than where he or she works.  Here is my checklist:
  • Does the lawyer do good work, or come recommended for good work?
  • Does he or she return phone calls or emails promptly?
  • How much of the work is passed off to associates and paralegals, at what rates and with what level of supervision?
  • What is the person's level of expertise or knowledge on the specific type of deal being worked on?
  • How willing is a lawyer to learn more about an area of law with which he or she has less experience without incurring client costs to get up to speed?
  • What is the turnaround time on work?
  • Does the lawyer suggest alternatives or other ideas about a deal?
Anyway, my clients hire me for who I am and not for where I work or the name on the door other than mine.  And I guess that means not attracting certain clients, and I have to live with that.

2 comments:

Chris Rodriguez said...

Very good post. I agree with you completely. The name on the door means nothing. The intellect, experience and expertise of the actual person advising you is everything, regardless of price.

kristin said...

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