Reinventing The Law Business: Trying And Failing And Succeeding – Lessons Learned

Many years ago I was working at a big law firm, and I knew my days were numbered. I was a real estate lawyer and this was about 1990 and there was no real estate going on. I wasn’t being paranoid – I was being realistic.

So I have never been the type that just shuts down in a crisis. I go down swinging!

I thought about it and quickly concluded that if real estate was down the odds were that bankruptcy and insolvency would be up, so if I were a “bankruptcy lawyer” who knew a lot about real estate I would be better off than a “real estate lawyer” who knew a lot about bankruptcy.

So I went to the firm’s library and took out every treatise I could find on bankruptcy and especially real estate and bankruptcy. I also took out the bankruptcy code itself and the prior code that had been superseded. And I started to read and read.

It actually didn’t take long (since, as I mentioned above, I had little else to do) before I started to develop some expertise and a working knowledge of the bankruptcy code and how it would apply to real estate transactions. After a while, I felt like I really knew this stuff! I had done it – I was now (sort of) a bankruptcy lawyer.

Now that I had transformed myself – by acquiring additional intellectual capital – I was confident that I would be able to not only keep my job but thrive as a “go-to” person in this hot area.

I was wrong…..

I was indeed let go, along with another 150 associates, all on the same day. It was a bleak time for me indeed, since real estate was going into a deep depression.

Fast forward a mere 18 years to 2008 when the real estate world was again falling apart and my firm was almost entirely a real estate shop. This time around things worked out very differently…….

I was in a leadership position at this time and was able to spearhead the formation of a Distressed Real Estate Practice Group, which was a combination of our real estate lawyers, our litigation attorneys and our bankruptcy partner. My knowledge of real estate and bankruptcy was suddenly very useful and stood me, and my colleagues, in very good stead. Of course I relied heavily on my bankruptcy partner, but it was helpful I could talk the talk and I had a working knowledge of how bankruptcy and insolvency situations were likely to play out.

Our Distressed Real Estate Practice was a major success and indeed likely saved the firm from going down during that rocky period.

Today there is little distress in the real estate world, but in real estate no matter how rosy things ever look, distress can always be around the corner. And who knows what the current stock, high-yield debt, and CMBS market turmoil may presage. It may be closer than we all think.

However, armed with my knowledge of bankruptcy and insolvency, I feel pretty good about my chances to stay employed. I guess being the managing partner might help a bit too…..

More seriously, I have two points to make here:

First, if your practice is getting whacked by external events – and in a roughly 40-year career, the odds are that it will be – then don’t just sit there and wait for the axe to fall. Do something about it! And the best thing you can do, in my view, is to acquire additional intellectual capital that will increase the value that you can bring to the table. If you are lucky, that value will become immediately apparent; however, even if not, the odds are good that this intellectual capital will be very valuable to you at a later point in your career.

Second, while it is a great thing to have deep knowledge of a discipline, it is also useful to have knowledge of disparate areas, which will connect in ways that aren’t necessarily apparent.

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Bruce Stachenfeld is the managing partner of Duval & Stachenfeld LLP, which is an approximately 70-lawyer law firm based in midtown Manhattan. The firm is known as “The Pure Play in Real Estate Law” because all of its practice areas are focused around real estate. With more than 50 full-time real estate lawyers, the firm is one of the largest real estate law practices in New York City. You can contact Bruce by email at [email protected].