United States: Real Estate Practice - What it Means to be Full Service

An expert is one who knows more and more about less and less. This humorous, but glib, way of explaining the age of specialization comes courtesy of Nicholas Butler, Columbia University's president for most of the first half of the 20th Century. In our modern, complex business world, it is neither economical nor prudent to hold oneself out as an expert in all areas of a chosen profession. This is especially true in law, where the consequences of inexperience can be costly to both client and lawyer alike. Thus, most lawyers practice in a specificallydefined legal field. Law firms, too, tend to specialize in one or more defined legal fields.

In recent years, however, more and more law firms are consolidating, either through merger or by acquiring select practice areas of other firms. In fact, according to The Hildebrandt Institute, law firm merger activity has soared over the last 6 years in firms of all sizes, the gap between large- and mid-sized firms has widened and there is evidence that premium work has migrated towards larger law firms. As of October 2003, 92 U.S.-based firms boasted more than 400 lawyers.

The reasons for this consolidation trend are varied, but one reason is a response to clients who are seeking firms that can provide so-called onestop shopping. Indeed, clients are tightening their outside counsel referral lists and looking for firms that can serve them in a variety of legal and geographic areas. Through consolidation, many law firms now purport to be full-service firms.

But, in the case of real estate lawyers, what does it mean to be part of a "fullservice" firm?

To answer this question, one need only look at the Global Real Estate Practice Section of Pillsbury Winthrop. With over 70 real estate attorneys in 10 offices across the United States, the Global Real Estate Practice Section prides itself as an integral part of a full-service law firm with over 750 lawyers in 16 offices across the world. In analyzing the Global Real Estate Practice Section in particular, and the firm in general, four concepts emerge in Pillsbury Winthrop's ability to provide comprehensive legal services. The four concepts, or keys, to a fullservice firm are geographic diversity, sub-practice area diversity, appurtenant practice area diversity and technological and structural linkage. Set forth below is a discussion of each of the four keys, with Pillsbury Winthrop used as an example to illustrate the concepts discussed.

One of the hallmarks of a large law firm is maintaining offices in several geographic locations. While technology often makes geography academic, clients prefer to engage a law firm that has connections to its corporate or regional headquarters and to the area in which the real estate transaction is to occur. Often, but not always, these are the same place. Although it is not possible or desirable to have offices in every real estate market, concentrating on key markets can lead to success. This is equally true for clients who will set up regional offices in key markets and then provide services in several surrounding cities and states. As an example, Pillsbury Winthrop's Houston office was selected, in part, due to the location of some of the Global Real Estate Practice Section's clients, such as ChevronTexaco Corp. With foot- prints in several key cities, the Global Real Estate Practice Section has provided services to clients from Hawaii to Texas to Connecticut, and many points in between.

Just as a large law firm can be made up of several practice areas, so can a practice area such as real estate be made up of several sub-practice areas. For example, Pillsbury Winthrop's Global Real Estate Practice Section consists of attorneys accomplished in purchases and sales, real estate litigation, public finance, land use, leasing, construction lending and project development. Clients' real estate needs are varied and complex, and to provide them with full service, a law firm offering real estate services must offer most, if not all, of the various sub-practice areas.

A typical real estate transaction today involves multiple disciplines - it is a legal octopus, with tentacles grasping elements of litigation, bankruptcy, tax, political law and securities in addition to real estate. These multiple disciplines may be sought by clients consecutively, as when during the course of a real estate matter a party declares bankruptcy or an IRS letter arrives. More often, however, these multiple disciplines are required by clients concurrently, to, for example, account or prepare for the bankruptcy of a party or to avoid IRS scrutiny.

Without a diversity of practice areas, clients may be forced to hire several law firms as issues arise. In such a case, clients risk lack of coordination among attorneys due to different law firms. In addition, when multiple law firms serve clients on the same matter, there is always the risk of one-upsmanship, whereby one law firm seeking future business from the clients competes with the other law firms instead of working cooperatively.

With clients looking for one-stop shopping, a firm like Pillsbury Winthrop - offering a cadre of attorneys versed in tax, litigation, political law, corporate and securities, entity formation, employee benefits, bankruptcy and creditor's rights - will be able to meet the clients' needs.

Implicit in the concept of one-stop shopping is coordination among the various practice areas. Large, multidisciplined law firms like Pillsbury Winthrop are technologically and structurally linked. Through state-ofthe- art hardware and software, geographically diverse offices can be connected seamlessly through computer and telephone networks. Managing business units - whether practice areas or client teams - allows for strategic planning and coordination. Each of these "links" provides the inter-disciplinary coordination that is essential to properly serve clients. Pillsbury Winthrop's motto - Teams That Work - recognizes the technological and structural linkage necessary in today's legal environment.

The global nature of our economy, the ease of travel and the technological advances that connect people in disparate places have led to businesses of all sizes in need of comprehensive legal services, including real estate. A full-service law firm with a real estate practice - especially one that implements the four concepts discussed above - is best positioned to deliver those legal services.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.