Deals // Verdicts // Settlements

>Big Deals

Jenner & Block represented the Tribune Company in its $8.2 billion going-private transaction by merging with an acquisition subsidiary of the Tribune Employee Stock Ownership Plan. Sam Zell, who financed the transaction, will assume the roles of chairman of the board and chief executive officer.

Under the terms of the merger agreement, all of the company’s publicly held shares of common stock, except for those owned by the Tribune ESOP and shares held by shareholders who validly exercised appraisal rights, will be cashed out at $34 per share.

Last April, the Tribune announced its intention to become a private company, owned 100 percent by the Tribune ESOP. EGI-TRB, an entity associated with Zell, made an initial investment of $250 million in the Tribune. As part of the going-private transaction, EGI-TRB increased its investment to $315 million by purchasing a note and a warrant to acquire up to 40 percent of the company’s common equity on a fully diluted basis.

“The deal has attracted a tremendous amount of media attention,” said Joseph Gromacki, the Jenner partner who led the team.

“Two things drive that: It’s a media company deal, and the media covers itself pretty well; and the Tribune is a landmark company facing unique challenges on the business side.

“The overall structure of the deal — how company looks after closing — is very unusual,” he said. “The ESOP is acquiring 100 percent of the stock of the company and Sam Zell has a warrant to acquire 40 percent of company. The other thing is that board and management changes were announced at the same time. Sam was named chairman and CEO, which shows that he is taking a strong leadership role in the company.

“Sam was a litigation client of our firm, but I’ve never worked with him before. I was cold-called by Joe Paolucci, the chief legal officer of Equity Group Investments LLC, Zell’s private investment firm. I interviewed and was hired on the spot, then it sort of went from there. I got very busy very quickly. It was a wonderful opportunity to work as a team with Joe Paolucci. It was my first deal for Sam and I’m happy with how it went.”

In addition to Gromacki, who is the chair of Jenner’s corporate practice, the team included partners Thomas A. Monson, Brian R. Boch, Michael T. Wolf, Farhad K. Patel, Elizabeth A. Davidson, Adam Petravicius, Edward G. Quinlisk, and William L. Tolbert, and associates Blake J. Fix, Melissa C. Fogerty, Peter H. Rosenbaum, Cori F. Brown, Mercedes M. Davis, Marc E. Harrison, and Jeffrey D. Larson.

• • • • •

Attorneys from the Chicago office of Latham & Watkins represented members of the Pritzker family in the $4.5 billion sale of a private company consisting of more than 125 manufacturing and service businesses to Berkshire Hathaway, Warren Buffett’s investment company.

Berkshire Hathaway announced that it will purchase 60 percent of Marmon Holdings, Inc., and has plans to acquire the remaining 40 percent over the next five or six years. Marmon Holdings is owned by trusts for the benefit of the Pritzker family. The deal is expected to close in the first quarter of this year.

The Latham team was led by corporate partners Michael A. Pucker and Thomas Edwin Keim Jr., and tax partner Stephen S. Bowen. Other partners who advised on the deal are Diana Slyfield Doyle, tax, Robin L. Struve, employment, and Cary R. Perlman, environmental matters. Corporate associates Zachary A. Judd and Ashran Jen also worked on the deal.

• • • • •

Schiff Hardin represented Consolidated Communications Holdings, Inc. in its acquisition of North Pittsburgh Systems, Inc., for a cash and stock purchase price of about $360 million. The transaction also involved the negotiation of a $950 million senior secured credit facility.

The acquisition adds a third territory, the region of Pennsylvania north of Pittsburgh, to Consolidated’s existing telecommunications operations in Illinois and Texas.

The Schiff Hardin team was led by Peter L. Rossiter and James E. Brown with key support from attorneys David S. McCarthy, Alexander B. Young, Ismail Alsheik, Jane E. Montgomery, Patricia S. Ullman, Owen E. MacBride, William M. Hannay, Henry W. Sledz Jr., Lauralyn G. Bengel, Mark E. Ashton, and Ali Khan, as well as paralegals Paul Bernacki, Helen Kasic, and Donald Salazar.

>Big Verdicts and Settlements

A Cook County jury awarded $22 million to the family of a 34 year-old woman who died during childbirth because the doctor and nurse failed to properly treat her acute high blood pressure.

On March 14, 2003, Rachelle Bentivenga, nine months pregnant with a delivery date of March 28, went to St. Francis Hospital in Evanston, where she complained of a severe headache. She was admitted and taken to labor and delivery, where she was examined by an experienced labor and delivery nurse and a second-year resident.

Both of them determined she had pre­eclampsia, severe high blood pressure. Lab tests showed she suffered from HELLP (hemolytic anemia, elevated liver enzymes, low platelet count) syndrome.

The hospital policy for pregnant women with severely high blood pressure or hypertension required an anti-hypertensive medication, labetalol, to be given every 10 minutes in increasing doses until the blood pressure came down into a safe range.

Contrary to the policy, Bentivenga was only given three doses of 10 milligrams of labetalol, instead of doses of 10, 20, 40 and 80 milligrams 10 minutes apart. Labor was induced, but before delivery her blood pressure skyrocketed and she became unresponsive.

Her son was successfully delivered by emergency cesarean section. A CT scan revealed that the mother had a massive brain hemorrhage and she was placed on ventilator support. She died four days later when the ventilator was disconnected.

The family was represented by David R. Barry, Jr. and Susan J. Schwartz of Corboy & Demetrio. The defendants were represented by Kevin T. Martin and Aiju C. Thevatheril of Swanson, Martin & Bell.

• • • • •

A Wilmington father falsely arrested in 2004 for the sexual assault and murder of his 3-year-old daughter was awarded, along with his wife, $15.5 million by a federal court jury.

Kevin Fox was arrested for the rape and murder of his daughter, Riley, and spent eight months in the Will County Jail before tests showed that DNA from Riley’s rape kit did not match his genetic profile. DNA tests performed later on duct tape that covered the girl’s mouth also excluded Fox.

Fox testified that Will County sheriff’s detectives coerced him into confessing to the crime during a 14-hour interrogation. His confession — that he accidentally hurt his daughter, thought she was dead, and tried to make it look like an abduction, rape, and murder — was in line with the detectives’ theory of the case, which they told Fox’s wife, Melissa, before interrogating Fox. The Foxes’ attorney also introduced evidence that a Will County deputy sheriff told the FBI to stop DNA testing a week after Fox’s arrest.

The jury awarded $9.3 million, including $3.7 million in punitive damages, to Fox, and $6.2 million to Melissa Fox for loss of con­sortium, including $2.5 million in punitive damages.

The plaintiffs were represented by Kathleen T. Zellner of Kathleen T. Zellner & Associates. The defendants were represented by Robert H. Smith, Mark J. Smith, and Joan M. Kubalanza of Lowis & Gellen.

• • • • •

The parents of a child injured during delivery agreed to an $11.5 million settlement in November.

Joshua Radis was born with brain damage and cerebral palsy in 2003. The plaintiffs alleged that fetal monitor tracings indicated that he was not tolerating labor because his heart rate wasn’t recovering during contractions.

The physicians tried to expedite delivery with a vacuum extractor, but stopped after eight minutes because the physician believed the baby would be delivered with one or two more pushes, but he wasn’t delivered until after 15 pushes.

The family was represented by David R. Barry Jr. of Corboy & Demetrio. North­western Memorial Hospital, which paid $9.5 million, was represented by Robert L. Nora and Andrea H. Kott of McKay, Nora, Tanzillo, Daddino & Kott. The physician and her corporation paid $2 million; they were represented by Rudolf G. Schade, Jr. of Cassiday Schade.

• • • • •

A woman who was paralyzed from the waist down after her car was crushed in an accident last February settled her case for $5.5 million.

Catherine Rodriguez was stopped at a red light when her car was rear-ended by a truck that was owned by Royal Paper Company and driven by Benjamin Brown. The truck ended up on top of Rodriguez’s car.

Rodriguez and her family were represented by David L. Buffen of Rittenberg, Buffen & Gulbrandsen. The defendants were represented by Larry A. Schechtman of SmithAmundsen.

• • • • •

A Cook County jury awarded $5.5 million to the estate of a woman who died in 1999 of septic shock after physicians discharged her from two hospitals, saying she had the flu.

Maria Saenz, 31, went to a walk-in clinic in Buffalo Grove, where she was treated for dehydration and low blood pressure. The doctor said that Saenz responded positively to fluid resuscitation and discharged her with a diagnosis of the stomach flu. She later went to an emergency room in Elgin, where she was again discharged with a diagnosis of the stomach flu. The next day, she returned to the Elgin hospital and was in septic shock and died of disseminated intravascular coagulation and organ failure.

Saenz was represented by Robert B. Phillips IV of Robert B. Phillips & Associates and Nathan J. Mirocha of Wolin, Kelter & Rosen. The Buffalo Grove doctor and hospital were represented by Stanley J. Davidson and Shawn P. Clifford of Hinshaw & Culbertson. The Elgin doctor was represented by Rodney E. VanAusdal and LaDonna L. Boeckman of Cray Huber Horstman Heil & VanAusdal.

• • • • •

The family of a dentist who died of a pulmo­nary embolism during a hospital stay received a $4 million settlement in November.

In November 2002, Anton Urban, 55, suffered a pelvic and wrist fracture following an automobile accident.

He was admitted to Lutheran General Hospital and identified by his doctors as a patient at high risk for the development of deep vein thrombosis (DVT), which can lead to pulmonary embolism.

Although medication was ordered by his doctors to reduce the risk of DVT, the medi­cation was withheld over a four-day period. During this time, the plaintiff alleged that Urban developed blood clots in the vessels of his lower extremities, and no diagnostic study was performed to evaluate if clots formed during this gap in treatment. The clots eventually broke free, traveled into his lungs, and caused Urban’s death. Urban was survived by his wife and four adult children.

The plaintiff was represented by Matthew L. Williams of Salvi Shostok & Pritchard. The hospital, which paid $2 million, was represented by Donna Kaner Socol and Bernice Jacobs of Hughes Socol Piers Resnick & Dym. Dr. Matthew Jiminez, who paid $1 million, was represented by Timothy A. Weaver of Pretzel & Stouffer. Dr. Daniel Resnick, who also paid $1 million, was represented by Michael J. Morrissey of Cassiday Schade.

• • • • •

A woman who was injured during laparoscopic surgery to remove an ovarian cyst was awarded $1.8 million by a federal judge following a court trial.

Rosemary Bombela-Tobias underwent lapa­ro­scopic surgery for removal of a left ovarian cyst in 2002 at Alivia Medical Center. During the procedure her iliac artery was lacerated and she nearly bled to death.

She required a complex abdominal closure, several sub­sequent surgeries, and a two-year recovery period during which she was unable to work. For much of her recovery period she had an open abdominal wound.

Injury to the common iliac artery is not a known complication of a laparoscopic surgery to remove an ovarian cyst. Perforation of the left common artery was caused by the improper location of surgical equipment by the treating surgeons.

Bombela-Tobias was represented by Barry Chafetz of Corboy & Demetrio. The hospital, which is a federally funded community health center, and the physicians were represented by Assistant U.S. Attorneys Patrick W. Johnson and Eileen M. Marutzky.

Social Scene

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Around the water cooler

 

If you are looking for an interesting read and have a few hours to burn, please check out: The Seattle Times’ Victory and Ruins site.

Yes, it is a sports series, but it also touches on what can happen when the court system fails and when laws and regulations do not apply to everyone. It also brings up interesting issues concerning the law and sports. Please take a look at it and we would love to hear your comments.

Also, once again, if you have any interesting story ideas, or if you are a lawyer or judge who would like to be part of our monthly Q &A please contact me at oclarke@lbpc.com.

We look forward to your comments.

Olivia

Setting themselves apart from the pack

By Olivia Clarke

When John Hickey interviewed in 1975 for a summer internship at Kirkland & Ellis, the firm had a reputation for being a sweatshop.

That same cutthroat reputation almost dissuaded Kevin Evanich from applying for a job there about 24 years ago.

“[Corporate transactional lawyers] had a reputation of being really pretty rough people to deal with — always negotiating for the final point, never giving in, and basically grinding opponents into the ground,” said Evanich, now a member of the firm’s management committee. “It was clear to us many years ago that we could no longer be that way.”

Luckily, Evanich and Hickey didn’t listen to the rumors because both said they have found a welcoming and supportive environment at Kirkland. They said the firm’s internal and ­external culture has shifted over the years to meet its clients’ changing needs.

“Our culture has always been about going out and recruiting the best potential lawyers and training them to be the best lawyers,” said Hickey, also a member of the management committee. “Turn over every stone, know every case inside and out, and know it better than the other side.

“I think our clients used to want us to take everything to the mat. That’s changed. Clients on the corporate side used to say, ‘Get me every penny you can get.’ Our goal of giving and providing the service our clients want hasn’t changed, but their wants and needs have changed.”

Like Kirkland, many of today’s firms now recognize the importance of defining their culture. Perception sometimes matters when it comes to recruiting the best lawyers, and building strong client relationships.

“You have to know who you are and who you want to be in order to gauge how you are doing. If you don’t have a defined culture, you don’t have a defined identity,” said Ron Safer, managing partner of Schiff Hardin.

With the growing competition among Chicago law firms, it becomes increasingly vital for firms to define who they want to be in the legal market. A defined culture helps set themselves apart from the pack, and recruit the lawyers and clients that will fit in best at the firm.

“We are problem solvers,” Evanich said. “Deals are now done with minimal blood on the floor. I attribute the enormous growth
of the private equity practice to a change in that attitude. We are more user-friendly for more clients, and clients understand the deep experience brought to [each matter], and a willingness to find solutions and compromise.”

The importance of culture

The ability to attract and retain lawyers is a major focus for today’s law firms, said Sarah Brule, a branch director at Robert Half Legal.

“[Lawyers] are paying much closer attention to their company’s work environment,” Brule said. “Aside from looking at salary, they inquire about corporate culture. They are looking for more enriched work environments, great career development opportunities, and they also inquire about benefits information.”

Law firms competing in the same market generally pay about the same for entry-level lawyers and lateral hires, so a way to distinguish themselves is by their culture, said Joel Henning, a legal consultant and vice president of Hildebrandt International.

Henning often recommends that two firms with different types of culture shouldn’t consider merging because there is nothing worse than trying to merge law firms with incompatible cultures.

“I think if you go back 25 years there was less likelihood that cultures were at risk because there was less lateral movement in and out of law firms,” Henning said. “Today there is a risk of jeopardizing a law firm culture, for example, by hiring highly profitable senior lawyers who are not nice people and, in my experience, law firms have been burned by that. I think that the savvy law firms today will take a pass on a lawyer if he or she is not going to fit in.”

Culture has very little to do with what you say, and instead relies on what everyone at the firm does, said Bryan I. Schwartz, Levenfeld Pearlstein’s chairman. The only way to refine a firm’s culture is to hire people who are invested in the culture, he said.

“Culture cannot be delegated with five ­exclamation points,” Schwartz said. “It starts from the top and goes down. If the leaders aren’t dedicated to building a culture, it has absolutely no chance.

“There is a big difference between having fun and building a culture,” Schwartz said. “It’s who we are, how we deal with clients, how we deal with people, how we deal with the sickness of an individual, how we deal with poor performance … You do not want people who just want hugs, and don’t want to be in a high-performance culture.”

One of the problems with developing a firm’s culture is that lawyers do not understand what that means because they haven’t been trained in people development, Schwartz said.

“I just think it requires a lot of dedication, a lot of work, and most firms would rather bill time than do that,” he said.

Some firms do a poor job conveying to law students the differences between their firm and other firms, and their recruiting practices can be generic, said David Van Zandt, dean of the Northwestern University School of Law. Students may sign up for 30 interviews, and they can’t research every firm in an in-depth way, he said.

Some firms now hire professionals who can help them improve their recruiting, Van Zandt said.

He said he’s long recommended to law firms that they figure out ways to get applicants to invest more in them. By getting law students to learn more about the firm, they will more likely come and stay because they made that investment.

The interview process could be more inten­sive, with law students interviewed for more than 20 minutes. This process would not involve law firms simply looking at the 30 top students in a class, and picking new associates based only on their grades, he said.

“If they can’t define their culture at the ­recruitment side, and communicate that to the students, there are probably going to be more mismatches,” he said. “If they did a better job differentiating themselves up-front, they would probably have a better hold on the students.”

Internally speaking

When Russell Eggert decided to leave Mayer Brown after 20 years, he talked to seven or eight Chicago firms.

Eggert usually learned pretty quickly whether a firm would be the place for him. Those firms where the lawyers didn’t show each other respect were scratched off his list.

He chose Reed Smith Sachnoff & Weaver because he likes how senior management makes decisions. They explain why they want to do something, provide evidence, discuss it, and offer details about their decisions, Eggert said.

“Some firms exuded an atmosphere of mutual respect and collegiality, and some didn’t,” Eggert said. “The way people interact with each other, particularly partners and associates,
or even partner to partner, is a pretty good ­litmus test.”

Reed Smith values open communication, said Michael LoVallo, the Chicago office’s managing partner.

The firm, for example, holds regular teleconferences with the partners so that information about the firm can be shared. It also provides open forums where partners can anonymously submit questions to senior management, and the questions get read and answered, LoVallo said.

Quentin “George” Heisler, the partner-in-charge of McDermott Will & Emery’s Chicago office, said the firm tries to create an environment where lawyers can work efficiently without having to deal with jerks or abuse.

The firm attempts to control negative behavior through its compen­sation and financial rewards, Heisler said. In its compensation system, managers raise questions about a lawyer’s willingness to cooperate with his or her colleagues.

“Part of the culture has to be that we are fair and supportive to our younger lawyers,” Heisler said. “We spend very significant amounts of money training and developing new lawyers. We are assuming in the highly technical world we exist in that most schools don’t prepare our lawyers for the highly technical practice areas we have. There has to be a commitment to that teaching.”

When the founding partners started Barack Ferrazzano Kirschbaum & Nagelberg almost 25 years ago, they wanted a casual atmosphere in terms of things like dress code, but not in terms of the work ethic, said Howard Kirschbaum, a founder.

Those lawyers who stay with the firm have an excellent chance of becoming equity partners, and that is not always the case in larger firms, Kirschbaum said. The turnover within the firm is also very low, he said.

“The people whom you hire comprise the bulk of the firm, and ­actually create the culture,” he said. “For us it has definitely been about trying to create an informal atmosphere where senior partners’ doors are always open, and you feel free to talk about anything you want to talk about.”

A culture that fits

Creating an internal culture can be tricky, said Thomas M. Fahey, managing partner of Ungaretti & Harris.

“You don’t want to be labeled as a ‘lifestyle firm’ because if you are not careful you will attract people who don’t have the requisite work ethic to come work for you,” Fahey said.

Ungaretti & Harris’ ideal lawyer has an entrepreneurial streak, which is needed because the firm often competes against the largest firms for projects and clients — without the advantage of size or name, Fahey said. The firm’s lawyers do not need a big firm atmosphere to be successful.

“We like people who have each other’s backs and are willing to ­sacrifice individual gratification for the greater success of the firm,” Fahey said.

“I think you have more individuality in a mid-size firm in how you practice and manage your clients,” he said. “As long as you meet our standards of excellence, then you have some latitude in how to go about the practice of law.”

Evanich, from Kirkland & Ellis, said the firm’s lawyers must be ­supportive of each other, and willing to pitch in on client matters.

While many firms’ compensation systems are almost formulaic, Hickey said Kirkland factors in the quality of lawyering, and how good a lawyer he or she is to colleagues. This is in addition to economic ­factors — the hours billed and the revenues generated, he said.

“If you look at any group of people that has to get a group effort ­together to compete against other groups, whether it’s a debate team or an Army unit, what happens to that group internally is, they bond,” Evanich said.

“As a result of that external competition, the individuals need to bond with one another in order to maximize their group’s chance of success.”

When Nate Eimer and David Stahl helped start Eimer Stahl Klevorn & Solberg about eight years ago, they said they hoped to create a firm where compensation is not based on the number of hours billed ­because that type of system teaches lawyers that quantity, not quality, is important.

The firm doesn’t assign clients to specific lawyers, instead, lawyers work with a client depending on the matter, they said. This idea creates a culture where all the lawyers feel responsible for all the clients.

They also didn’t like how their previous law firms kept financial ­information from partners and associates. They instead share a broad outline of the financial information with associates, and all the data with partners.

“It makes [lawyers] financially responsible. They learn that it is not public information,” Eimer said. “They see dramatically the effects, from year to year, of their efforts … The driving force is to treat everyone as responsible adults.”

Eimer Stahl has not hired lateral partners with large books of ­business because nothing prevents them from leaving when prospects become better elsewhere, Stahl said. The firm prefers hiring lawyers who want to help build a law firm.

“I think the primary goal is to make sure there is a sense of ownership in the firm, in terms of emotional owner­ship and intellectual ownership,” Eimer said. “I want [the firm’s lawyers] to understand why they are doing what they are doing, and how it fits in,
not just with our needs as a firm, but, more importantly, with the clients’ needs.”

Creating client relationships

Don Hershman, a principal and a member of Much Shelist Denenberg Ament & Rubenstein’s management committee, said most
of the firm’s lawyers want to do more than ­practice law. They want to also impact their clients’ businesses.

“We encourage [lawyers] to meet with clients, walk plant floors, read trade journals, know what the competitors are doing, and focus the services in a way that can help their clients. Instead of being reactive, we try to be proactive,” Hershman said.

“We want to say to the client, ‘Hey, have you thought about this?’”

Much Shelist surveys its clients, and asks what it should be doing more effectively.

Many clients like that all the lawyers work within the firm’s four walls, and they don’t need to deal with different offices for their legal needs, Hershman said.

The firm is committed to being a middle-market independent firm, he said.

“If we didn’t define our culture to be these types of things, you can lose focus. It can be scattered,” he said. “You can’t be all things to all people. We know our strengths and we know our weaknesses.

“We won’t be doing billion-dollar, cross-border transactions. We can do significant ­domestic transactions.”

Reed Smith keeps track of the time lawyers spend helping their colleagues so that it can build teamwork, LoVallo said.

“The culture is one where, without any ­hesita­tion, if you are involving a partner or another lawyer in something, you have complete confidence that your matter or your client is going to receive the best attention, and the same attention that this person would give to their own client,” he said.

Heisler, from McDermott Will & Emery, said lawyers learn to be responsive to clients at all times because firms often lose clients when they are not responsive.

He said McDermott promotes an entrepreneurial nature among its lawyers, and is very interested in developing new and existing business.

Safer, from Schiff Hardin, said his firm’s culture includes a client intimacy model that allows its lawyers to spend the energy getting to know the client’s business, its personality, and its staff.

“You have to have communication with the client, and that is not a matter of informing the client of how it’s going to be,” Safer said. “Rather, it is communicating how things should be, and making sure everybody is on the same page. That takes a certain mindset. We look for people willing to search for the answers together.”

One thing the firm has been tremendously successful with is helping midsize companies grow into Fortune 500 companies, Safer said. These clients do not have 50 cases going at one time, and don’t have 100 deals occurring simultaneously. The firm often defends them against life-threatening litigation because of their size and scope.

“The work that we do for them is critically important,” he said. “We ­cannot fail. That creates a certain energy, a certain urgency that is energizing.”

Pro bono work has historically been very important to Sonnenschein Nath & Rosenthal, said Bob Messerly, managing partner of the firm’s Chicago ­office.

The firm, for example, created Legacy Charter School in North Lawndale, and members of the staff donate their time there. Employees are usually ­allowed to leave work early when they volunteer at the school or for similar projects.

Up to 100 hours of pro bono time may be counted toward a lawyer’s billable hours, Messerly said. And, with permission, even more pro bono hours may be counted, he said.

“We recently have undertaken a strategic plan about where we want to be in the next five or 10 years,” Messerly said. “One of the primary tenets was to grow, but grow in a way that we can retain our firm culture. We don’t want to grow or expand if we are not going to be the same firm. That is what drives a lot of people to be here.”

Sonnenschein tries to set itself apart by keeping its recruiting classes small, with about eight to 10 summer associates, Messerly said. The firm wants ­summer associates to feel like their classmates are their friends rather than their competitors.

“For years we’ve had an informal policy that if somebody does not fit within our culture, we won’t hire them — regardless of how economically desirable they may be,” he said.

Eimer said Eimer Stahl typically represents Fortune 500 companies, and has turned away individual and small clients that do not want to be clients for the long run.

Stahl said the firm is interested in establishing long-term relationships with its clients. At the same time, it doesn’t like to impose its judgments on clients, but instead tries to operate in an open manner.

For example, Eimer told one client that the next legal step could be ­expensive so the client should consider whether to move forward. In the end, the client did move forward, and won the case. The matter ended up costing very little, but the client appreciated the candor, he said.

Evanich, from Kirkland, said his firm continues to be focused on client service.

“When a client needs something, you don’t negotiate a deadline,” he said. “You give them what they need when they need it.”

Kirkland lawyers listen to their clients, and figure out a way to meet their needs, Hickey said. Because of this, he said the firm develops many institutional client relationships.

“We are not a group of people who mistreat people,” Evanich said. “We are motivated folks who want to produce the highest quality of work, and care a lot about each other and the name of the firm.”

 

Global real estate: Doing deals overseas

By Robert Yates

The Aussies are coming! The Aussies are coming!

Well, not exactly. They’re already here. The Australians have come to America, not loaded with shrimp for the barby, but with money, lots and lots of money. They have 99-year leases on the Chicago Skyway and the Indiana Toll Road. They own shopping malls. They own toll roads and tunnels in Europe.

According to the Association of Foreign ­Investors in Real Estate (AFIRE), in 2006, ­Australia was the most active foreign buyer of real estate in the United States (54 percent). Germany (27 percent) and The Netherlands
(8 percent) were a distant second and third.

Westfield, the largest investment bank in Australia owns 57 shopping centers and malls in the United States, including Old Orchard in Skokie, North Bridge on Michigan Avenue, Louis Joliet Mall in Joliet, and Hawthorn Center in Vernon Hills.

“Australia is young, wealthy, and indust­rious,” said Leonard Rosenberg, a real estate partner at Mayer Brown. “They have a lot of money to invest and they’re looking for places to go. Their commercial property market is highly securitized, so they have lots of money to invest but no place to invest in Australian real estate. It needs to go somewhere and a lot of it comes here.”

The emergence of Australia as a global ­financial power is just part of the picture in the world of global real estate. There has ­always been foreign investment in America, and Ameri­can investment in foreign real estate, but within the last decade, in particular, capital has been flowing back-and-forth across borders without regard to those borders.

“The world is flat,” Rosenberg said. “Global­ization has created all these opportunities and Australians have taken good advantage of that. The investment world has been moderately flat for decades, but in the last several years, tax treaties and other investment vehicles have allowed people to cross borders efficiently.”

The languages, the legal systems, the ­business cultures are different, but billions of dollars are looking for places to land, and more countries are providing landing places than ever before — China is exploding, India is growing, Dubai has 20 to 30 percent of all the tower cranes in the world, and, in those countries where political stability has taken root, Asian and Latin American countries are emerging as players.

“The movement of money across borders has only accelerated,” said Jeffrey Usow, also a real estate partner at Mayer Brown. “Our clients’ borders are breaking down, and ours, too.

“The world’s becoming smaller,” said Paul Meyer, a real estate partner at Mayer Brown who does work in Latin America. “There’s a lot of political instability in world — it’s too simplistic, but because of the economic ties that go so deep in all these different countries, hopefully at some point people will start to think that they can’t really hurt us without hurting China and Russia.

“Hopefully, people will start to realize that there are a lot of consequences to their actions. They might think they’re attacking some ­interest abroad, but they’re actually attacking a country nearer and dearer to them.”

We’re all connected now, connected by com­merce even more than political ties. Whether it’s American pension funds investing in ­resorts in Thailand and Costa Rica, Western Europeans investing in American office buildings, or the government of Singapore buying assets here, commercial interests are pushing aside a narrow view of what political interests are.

A lucrative international arena

Leaving aside the political implications of the erosion of borders, for real estate lawyers the international stage beckons — at times confusing, but lucrative and mind-expanding.

“At this point in time, lawyers and clients are citizens in a global economy,” said Jana Cohen Barbe, a partner at Sonnenschein Nath & Rosenthal, “so you can’t think domestically or provide purely domestic expertise. Clients are global, so your vision is global.”

“Thirty years ago, did you think as a real ­estate lawyer, you’d be doing what you’re doing today? No,” said Jay Epstien, chair of global real estate at DLA Piper’s Washington, D.C., office. “Real estate lawyers did business in their own backyard. REITs — the public ownership of real estate — transformed the real estate industry from local entrepreneurs to a highly concentrated group of owners with access to national capital.

“What made the world even flatter, to use Tom Friedman’s phrase, was the outflow of investment capital and knowledge capital from the states as traditionally strong U.S. real ­estate firms, like Zell, Vornado, and Tishman, sought out opportunities outside the U.S.,” Epstien said. “Investment advisers were ­raising funds in regions outside the U.S., and real estate companies extended their reach around the world.

“You had the Pacific Rim stuff in the mid-’80s,” he said. “It’s different today — you’ve got capital coming in from all over the world. There’s an abundance of capital in the Middle East. The Chinese want to invest here. We’ve always had money coming from Western ­Europe. It’s a very fluid market.”

And investment money is now looking south as well, as Latin America emerges — and that appears to be an accurate description — from decades of political and financial ­turmoil to become a growing market. The Latin American debt crisis of the late ’70s and ’80s took years to work out, but by the early ’90s, Latin America was in place for investors to return.

“You had political regimes that were pro-market and pro-investment and actively sought U.S. investors through the ’90s,” said Douglas Doetsch, a real estate partner at Mayer Brown. “Then there was a dip in Mexico in ‘95 with the devaluation of the peso — it took a year
or two to work out of that; in ‘98, Brazil ­devalued its currency. There was the Argentine crisis in 2001, but that was largely ­restricted to Argentina.

“All emerging markets are volatile,” he said. “But through most of the new millennium, growth has been fairly steady,” he said. “More than that, you have new investors and investments — a tremendous growth in U.S. and European investors and Australian investors in emerging market real estate.

“Country risk is a big factor in pricing deals,” said Meyer of Mayer Brown. “Mexico is a stable environment. It’s a stable country, also a very big country with tremendous growth for resort, retail, industrial. It’s a ­market that actually is maturing to the point that people feel comfortable investing there. The smaller Central American countries, ­because they’re smaller, are really more tourist-oriented. They don’t have the retail ­development or the residential development, aside from condos in resort areas.”

“Mexico, despite the turmoil in the last election, most of our clients and the business community view it as now being solid enough to make significant investments,” Usow said. “The policies of the country have been to ­encourage investment. There’s a constant push and pull because of domestic exigencies, but for the most part, they have encouraged investment.”

“As real estate investors, most of these ­invest in their home market first,” Doetsch said. “Institutional investors — pension plans like CalPERS — then look to neighboring markets that are like their home market, but yields are relatively low in mature markets. Institutional investors are long-term, they’re working with public money and looking for investments that would be favorable for
20 years, and a long-term investment that’s ­favorable at 10 percent is better than 5 to 6 percent.

“This is not to say they’re putting all
their eggs in the emerging market basket,”
he said, “but their portfolios have grown tremendously in the last 20 years. They have hundreds of billions to invest, so if they invest 10 percent in an emerging market, that’s still a large sum of money.”

Growing intellectual demands

And, to return Down Under: With a population of around 21 million, the Australians may not be the biggest players in the global real estate market, but a reform in Australian retirement income policies has created a vast supply of money to invest.

Since 1992, employers have been required to make contributions to superannuation funds, the Australian version of pension funds, on behalf of most of their employees.

Originally set at 3 percent, the minimum contribution was set at 9 percent in 2002. As a result, superannuation assets total $1 trillion today, according to AFIRE. And, according to the Sydney Morning Herald, Australia has more money in managed funds per capita than any other developed country.

“We’ve been doing work for Australian ­investors since 1999,” said Bruce Gelman, a
tax partner at Mayer Brown. “The super­annuation funds have driven it. The real ­estate and yield markets in Australia are relatively small, and about half-a-dozen years ago, Australia was tapped out for investment. Our markets are similar, the way we do business is similar, and it’s grown exponentially since then.

“They’ve been doing infrastructure before we knew what it meant,” Gelman said. “The Australians have been doing it for long time — they have been the leaders.

“We represented the city in the transaction lease of the Chicago skyway for 99 years — Macquarie [an Australian investment bank] and Cintra [a Spanish toll road company] won the bid — $1.8 billion for a seven-mile road,” Gelman said. “That was higher than anyone expected, but these infrastructure bankers spend a lot of time modeling income streams they can justify. The tolls just went up to $3 [from $2.50], and will continue to go up until 2017, then it’s based on the CPI.

“Macquarie and Cintra paid $3.8 billion for the concession for the Indiana Toll Road,” he said. “The Pennsylvania Turnpike is about to go to bid; it’s going to dwarf the Chicago Skyway deal, probably $20 to $30 billion. The reason these are such big numbers is that they’re sure-thing yields in this age of ­uncertainty — people aren’t going to stop driving on roads, and these toll roads are going to generate constant yields.”

Australia, Latin America, and Asia — this is no longer the real estate practice these lawyers signed up for, 20 or 30 years ago. The intellectual demands have grown (”I’m probably the only lawyer in Chicago with the Australian Securities Exchange regulations on his desk,” Rosenberg said) and cultural issues move to the foreground.

“It’s not your sort of local dirt law practice, anymore, it’s more real estate capital markets and private equity markets,” Usow said. “To a much greater degree, we’re at the intersection of real estate and real estate capital markets, private equity that has changed and been ­accelerated by globalization of practice.”

Mayer Brown, having merged with London-based Rowe & Maw several years ago, merged in January with the Hong Kong-based firm of Johnson, Stokes & Masters, one of the largest law firms in Asia.

“Our footprint now is trying to match the footprint of our institutional real estate ­investors,” Usow said. “That’s really why we’re there.”

“Real estate has always been a great ­practice area even if you’re doing domestic transaction — it involves finance, corporate, tax, ERISA — those elements are still there in inter­national market, though tax is critical,” Meyer said. “How your investment gets structured on a tax-efficient basis — paying attention to the type of entity that’s investing — whether you’re a tax-exempt investor, taxable investor, and what the different laws are in juris­dictions. How does the entity get taxed in that jurisdiction? How do you get money out as debt? How do you get money out as distribution?

“All those things apply in the domestic ­market, but not with the same level of critical importance that they have in the inter­national arena — the same elements are there, but they take on added importance.”

But doing business overseas, especially in the emerging countries, is not for timid souls.

There is, for starters, the language barrier — more a barrier for Americans, who tend
to have forgotten most of their high-school Spanish, than the people they are dealing with.

“Everything is negotiated in English,” Meyer said. “Maybe the documentation is in Spanish, but it’s negotiated in English. But we also want to be respectful — if you’re in the market you should know the language. It’s amazing — you go places and, from cab driver to bellboy to the maitre d’ of a restaurant, everyone speaks ­English.”

Level of sophistication

But more deeply, the practices are different, the customs are different, the level of sophistication may not be up to American standards, but the deals have to get done.

“The fundamentals still apply, whether you’re in Cook County or Brazil,” Barbe said. “Our Chicago office is doing significant real estate development in Latin America. The principles are exactly the same.

“You need to acquire contiguous parcels of land; you need zoning approval,” she said. “It’s not the same zoning code, but governments in Latin America have zoning codes; environmental issues cross every border — there’s an enormous desire to develop green, outside the U.S., and it’s a big deal in the U.S. The laws may be different as to how you perfect a lien, but you still have to perfect a lien.”

“You have to have sensitivity to other legal systems and business cultures and other ways of approaching the world,” Doetsch said. “A U.S. real estate lawyer assumes a certain kind of purchase agreement, the existence of title insurance, and that the zoning will follow a prescribed format. What you find is that a lot of those assumptions don’t hold, so you have to rethink.

“The fundamentals of good investing and key risks remain, but, with the details, you have to be open to new ways of doing things and sensitive to other ways of doing things,” he said. “There’s lots of room for creativity, because unexpected things happen all the time — you can assume that the unexpected will happen.”

“More and more transactions abroad are looking like transactions in the U.S.,” said David Bryant, real estate partner at Katten Muchin Rosenman. “In Europe, for instance, they’ve developed a fairly sophisticated real estate financial market, but South America has yet to develop those same levels of ­practices. In part, that’s a function of having a ­sophisticated investor base willing to invest in those economies. And, in part, it’s historical, meaning some countries are developing but have not reached same point or have not been as financially active as Europe.”

“If you go to a different country, they don’t necessarily have the same level of documentation and due diligence as in a pure U.S. deal,” Meyer said. “That’s part of the education on the U.S. investor side — to become more ­familiar with the customs and practices of ­different countries, and also, by the same token, to make an effort to try and lift some of looser standards up to the higher standards of the U.S.

“When you first go into a jurisdiction,” he said, “you’re more tense, you want to make sure that you obtain everything you typically would get, but the more comfortable you get with the process and procedures in that jurisdiction, the more you’re willing to go more with the market.

“If you’re doing a joint venture, you still have to buy assets in that market,” Meyer said. “So, even though you get your joint venture partner up to speed on what you expect to happen from the perspective of the U.S. ­investor, that partner has to go out and find assets and deal with people who are not under that same structure, and you need to give him the flexibility to buy property.”

Knowing no boundaries

Even though the electronic world obviates much of the concern over whether the middle of the United States is the best location to practice law on an international scale, the pressures of this kind of work has ramifications in the office.

“There are geographies that matter and ­geographies that don’t,” Barbe said. “For us, Chicago is as good a place as any. It’s centrally located, but in a lot of respects it doesn’t ­matter, you could do this anywhere. It’s helpful that businesses are located here and we have a strong economy, but it’s not relevant geographically.”

But geography does matter, a bit.

“Chicago is great for Latin America,” Meyer said. “We’re pretty much in the same time zone. Mexico City is a four-hour flight, it’s very convenient. So that’s a real plus. For our people who deal with Australia, Asia, India, it’s much more difficult because of the time difference.”

The complexity of doing deals across ­borders is also forcing firms to adjust their traditional ideas about the structures of their practices. Projects are not restricted to a single office, and the lines of practice areas are ­giving way as well.

“There’s a lot of interchange between the different offices,” Meyer said. “We’re out in New York a lot, in D.C. a lot. We have a development in Costa Rica: our New York office, the Chicago office, and one person from the Houston office are all working on the transaction.

“Just as our clients are looking to integrate on an international basis, our firm does the same thing,” he said. “It’s our London office working with us and our New York office — office distinctions are broken down just as ­international boundaries are broken down.”

“Practice group boundaries are disappearing,” Barbe said. “We’re more industry-focused and client-focused, rather than functioning within the traditional boundaries. We’re ­moving to an industry model — that’s what our clients have done.”

“One thing you see with more and more clients — when people were first making ­investments, they didn’t necessarily have a physical presence in the jurisdictions where they were making the investments,” Meyer said.

“You do see more and more clients opening offices — whether in Mexico City or London or someplace else,” he said. “They want to ­establish a physical presence in the different jurisdictions they’re looking to invest in.
That, to me, shows a maturation of the ­market and people. This is something that’s here to stay, not just an investment-fancy phase that’s going to be here for a while, then go away. People are making significant capital investments in their business plans in these jurisdictions.”

“What does a real estate lawyer want to do? Deals,” said DLA Piper’s Epstien.

“I’m a deal junkie. I want to do deals. The ­international platform puts you in a position to work on fascinating deals. Not every client has got its vision international, but inter­national is one piece of an extreme puzzle. The challenge of doing business abroad is that you’re dealing with currency issues, different practices, different cultures, and trying to knit that together and convince and counsel your client.”

 

Katz builds a legal career based on a mission

By Olivia Clarke

At age 32, and with only about four years of legal experience, Matthew Katz has turned his legal practice into a thriving law firm with 10 lawyers and four offices, including a new office in Mexico City.

Described by his colleagues as a visionary and by his clients as trustworthy, Katz has built a law practice that provides a full range of legal services to the local Spanish-speaking community. His legal career has become an extension of both his commitment to political activism within the Latino community, and his long-time passion for the Spanish language.

Prior to becoming a lawyer, he taught at Farragut Career Academy high school, which serves the predominantly Spanish-speaking neighborhood of Little Village. He learned first­hand the injustices his students and their families faced, and vowed that he would some­day open a law practice in the school’s community.

“I like being able to have a huge impact on people’s lives,” Katz said. “Before I go to court, I’m, most of the time, up in the middle of the night. I’m washing the dishes and straightening the house at like 3 or 4 in the morning … Sometimes I have an epiphany on a case, sometimes I’m just nervous or stressed out.

“It’s gratifying at the end, but I will tell you that the stress and the worry and the struggle, the repeated reviewing of the file or rereading the statute or whatever is a lot more than the gratification I take at the end.”

Becoming an activist

Katz grew up in Evanston in a Jewish family — his father an emergency room doctor, and his mother a special education administrator in local public schools.

He described Evanston as diverse, though segregated. His elementary and junior high classes were integrated, and he made many friends of different races and ethnicities. But that changed in high school when he started taking advanced placement classes that tended to be made up of mainly white students.

He started taking Spanish classes in junior high school, and grasped the accent very well. His teachers asked him if his parents, grandparents, or even a nanny was Hispanic — which wasn’t the case. He simply loved studying Spanish, and it became one of his favorite classes.

As a high school student, he participated in rallies against the Ku Klux Klan in places like Springfield, Ill. He also participated in his school’s model United Nations and the speech and debate team.

As an overweight teen, Katz said he lost about 90 pounds his junior year, and at the same time learned an important lesson that he carried with him into adulthood.

“From one minute to the next, I went from being this obscure, frowned-upon, criticized [person] where in junior high school they used to grab the sides of my rolls when I was walking through the hallways; and then senior year, all of a sudden, people would ask me if I was the same guy.

“Everybody treated me in a totally ­different way. So that had a huge impact on me. I was sort of blown away by how superficial our ­society really was. That was a very powerful learning experience for me.”

As a college student at the University of ­Illinois at Urbana-Champaign, he began building what would become a significant connection to the Latino culture and ­community.

Growing up, he didn’t really connect with any particular group. But the Latino community accepted him, and he found a place where he belonged so he immersed himself in the culture and the language.

Katz studied history and education at the University of Illinois, and really began to ­ignite his political activism within the Latino community.

For example, Katz’s friend asked him to take his place at a debate in the student union against the College Republicans about California Proposition 187 — a 1994 ballot-initiative ­requiring all immigrants to provide proof of lawful residency to attend public schools and get hospital care — and a similar House bill a local state representative suggested, he said.

“I gave this talk at the union and was kind of loud, citing statistics and I made the ­College Republicans look really bad,” he said. “I had the whole union supporting me. It was a crowd of largely Latino students who had filled the hall we were in … Bizarrely, overnight I was propelled into pseudo-fame among the Latino community in Champaign.

“We had a big event, a March for Justice, with 500 people, mainly against Proposition 187 and also cutbacks on affirmative action benefits and other things that were ripe at that time.”

In the summer of 1994 he co-organized Zapa­tista Solidarity at the University of Illinois, a group organized to support the Mexican ­indigenous people.

Katz served as one of 4,000 participants from 44 countries at the International Encounter of Humanity and Against Neo-Liberalism as a representative of the University of Illinois chapter. He talked with activists and with the Zapatistas in Lacandon Rainforest of Chiapas, Mexico.

“To actually engage the world around you with many, many other bodies at a rally or protest, I think is something very gratifying, very satisfying and it makes you feel more engaged in society and connected to humanity,” he said.

He studied at the University of Granada in Spain in fall 1995, and traveled to Mexico City in the summer of 1996 with 11 other students to study the history of the Mexican Revolution, and the life of Emiliano Zapata.

He was an international reporter from 1995 to 1996 for the radio program, “Labor Beat,” on Champaign Public Radio. He provided analyses of the international labor movement from Mexico and Spain. He also wrote a ­regular column for the Daily Illini student newspaper about social justice.

Katz said his activist beliefs come from “my mom always yelling at my dad when he would say something gender- or race-provoking. My dad grew up in Dallas. His father was very conservative in many ways. My dad didn’t ­believe, I think, the prejudices he would shout out every once in awhile. But my dad also very much was and still is a lover of history and politics and he studied history as an ­undergrad. We would always talk about the Holocaust and Reagan and those days.

“A lot of it was from an intellectual, not just a historic sense of Jews coming out of a tradition of suffering and injustice, but also an intellectual understanding and hope for a world of social justice and an understanding of the fact that the one we are in is far from it.”

Meeting his inspiration

Katz wanted to be a high school teacher his entire life, despite his mother’s warnings that it is not a lucrative profession.

“My goal was to teach in a predominantly Latino or Mexican or Spanish-speaking inner-city high school,” he said. “I applied and was hired right away at the interview.”

He taught U.S. history, U.S. government and law, the history of Latin America, world studies, and economics at Farragut, which emphasizes a curriculum that combines academic instruction with work-study and vocational training.

He and another teacher, Charles Kuner, founded and coached a speech and debate team at Farragut. The team beat Whitney M. Young Magnet High School, Chicago’s flagship magnet high school, for the tournament championship — one of its first debate tournament matches, he said.

Kuner, who taught for 42 years at Farragut and retired in June 2007, said Katz is a very ­innovative individual who always demanded a high quality of work and discipline from his students.

“He certainly has what I would call a great intellect,” Kuner said. “He can retain and learn things very quickly. He’s very enthusiastic. He’s a caring individual. Once he makes a commitment to something he sticks to that commitment. He’s also an individual who is very sensitive in terms of social causes, social justice, and things going on in the world or in the community or in the city or the country.”

Katz earned a number of education awards and honors while teaching at Farragut.

He won an Oppenheimer Family Foundation grant for the “Race, History and YOU” project he helped start at the school. The ­project involved hundreds of high school ­students from around Chicago attending a Saturday convention about the history of ­social justice. Farragut high school students taught the different classes.

He founded in 2000 a law program at ­Farragut, and organized the donation of ­hundreds of thousands of dollars worth of law books to create the first complete federal and state law library in an American high school to be used for the law instruction of high school students, he said.

He taught his students how to read and brief court cases, and conduct court observations. Katz also helped start a legal clinic at Farragut, where lawyers would volunteer their time to do intakes and help the local community handle legal matters.

Katz said he showed his students the importance of activism, particularly environmental activism. He and his students protested two power plants in Little Village by linking arms from one end of the community to the other.

“I like being in front of a group of kids and engaging them and inspiring them to learn more and to think critically about the world around them, and to take them away from the day-to-day violence in the neighborhood and their material worries and partying,” Katz said. “I feel like I made a difference.”

After teaching for a few years, he considered going to law school.

“We did a lot of projects, and I felt I had an impact,” he said about teaching. “But I still felt impotent in a lot of ways as a teacher to affect a lot of the problems going on in my students’ lives.”

His students faced such issues as domestic violence, immigration concerns, and racism from law enforcement, he said.

“I think that kicked me in the butt to say, ‘All right, don’t just stay here,’” he said. “I’ve always been someone who thirsts for knowledge and sort of knowing it all — knowing the law and knowing my rights. I was also a student of the Holocaust. As a Jewish adolescent, we heard from survivors all the time, and I read a lot about that. That was always in the back of my mind and still is: What do you do when you get that knock on the door?

“And the legislature is permeated with ­people intent on dictatorial designs. That also was a motivator to know the law, and understand it so I would understand when others are playing games with the system.”

He chose DePaul University College of Law’s night program, and continued teaching high school.

He typically finished teaching at about 3 p.m., ran to the library to read cases for a few hours, and ate dinner in the student union ­before going to class. On days when his ­students had speech and debate practice, he cut it a little closer.

After completing law school in three years, he continued teaching at Farragut while at the same time opened his own law office. He used personal days so he could handle his cases in court.

But he realized after one semester that it was time to resign. After seven and a half years as a teacher, he became a full-time lawyer in 2004.

“I always knew that was what I wanted to do,” said Katz, about opening his own ­practice in Little Village. “With my students, that was who I wanted to represent. I knew from the stories I heard that they weren’t ­getting the right attention.

“I wanted a place for them to go and for their families to go that they would know without fail, without ­question, they would be taken care of.”

Building a law firm

Opening his own law firm was both a scary and exciting experience, Katz said.

The ability to compassionately interact with the clientele is something he already knew how to do because of his experiences with his students and their families, he said.

“I did very little or hardly any advertising,” he said. “I sort of grew into the business. It was a learning experience for me to be a business person. That was new more than anything.”

Katz works out of his Cermak Road office, one of three Chicago offices. In this particular office, posters of such figures as the late Chicago Mayor Harold Washington, Mexican artist Diego Rivera, and civil rights activist Cesar Chavez hang on the walls.

On a recent December morning, CNN ­en Español could be heard on the television, while La Raza newspaper, sat side-by-side with The New York Times on a nearby table in the waiting area.

By about 10 a.m. clients took up most of the waiting area’s chairs.

Alex Linares, a paralegal at the firm, said he first met Katz as a student when he participated in the “Race, History and YOU” project. Even though Katz became a lawyer, he still runs aspects of the firm as a teacher would, Linares said.

For example, Katz tries to involve the entire staff in each meeting.

He has each person name one good thing, and one negative thing about the office, Linares said. They then go around the table and talk about how they can change each ­negative to a positive.

Katz also gives each new client a copy of “Law School for High School Students,” a book he wrote in 2003 and self-published in 2007. He used the material to teach his ­students the basics of the law, and hopes his clients use the book to become aware of their rights.

“He’s very direct,” Linares said. “He likes to make decisions. A lot of it has to do with being a teacher up in front of a class. You are expected to know more than others, and ­motivate them to work harder.”

Keeping busy

Most of Katz’s time these days is spent doing initial consultations and practice management.

He doesn’t do as much court work as he used to, but will be in court maybe once or twice a week. He typically works six days a week, from about 9 a.m. to 7 p.m.

Katz said his law firm fills an essential need in the local Latino community. Spanish-speaking people do not always have access to legal help in their native language, he said.

Katz Law Office handles such practice areas as immigration, criminal defense, child custody and real estate. And all the firm’s lawyers speak at least some Spanish.

Julissa Ruiz, an attorney in the Cermak ­office, said Katz makes his dreams a reality. And he’s very creative when figuring out a legal strategy, Ruiz said.

“The minute I interviewed with him I thought I was in the right place,” Ruiz said. “There is a stereotypical view of most law firms, which is they are very conservative. One of the main things I saw the minute I interviewed with him was that this is a place I need to be because it was so ­non-conservative.”

“He has a vision, and he sets goals, and he sets ambitious goals, and follows through on them,” said Gina Reynolds, a lawyer and a vice president of the firm. “He listens to the clients, and not only listens, but makes them feel like they are being heard. They feel very comfortable and are very trusting of him.”

Chicago resident John Miranda came to Katz Law Office after reading the lawyer’s ­occasional column in the Lawndale News for about two years.

Katz is currently helping him with a real ­estate matter.

Miranda said he is very impressed with the lawyer’s compassion for the “common person.”

“He seemed to appear to me to be concerned about injustices to others,” Miranda said. “I was very impressed with the young employees he had there. I felt some form of pride for ­seeing our youth and the direction they are going.”

Chicago resident Erika Lang heard about Katz Law Office through the Illinois Hispanic Chamber of Commerce.

The firm helped her with a divorce and child custody case, she said.

“If you are going to have an attorney on your side, he is the one to have,” she said. “When people think of attorneys they always think they are out for themselves. He is one of the few people in the community that is ­really trying to help the community.

“He does a really great job helping people that wouldn’t otherwise be able to get help.”

Defining himself

When Katz isn’t practicing law, he spends time with his wife of over a year, Mayari. They live in the same neighborhood as the Cermak office.

His role models include Mahatma Gandhi, who Katz said was not only an activist but also a lawyer; Rabbi Abraham Joshua Heschel, a Jewish theologian who marched with Martin Luther King Jr.; and Clarence Darrow, a lawyer and civil libertarian.

“It’s tough being weird and being different, being this Jewish guy speaking Spanish,” Katz said. “All my friends, the people that I am around every day, clients, are all Latino. I’m living in a Latino culture, and speaking Spanish just as much as I’m speaking English. It is different. And I don’t think I have many peers, you know.

“It’s lonely a lot of the time. But now also being a supervisor of a lot of people, it is lonely in a lot of ways.”

Katz said he doesn’t let himself get caught up in the hype that often exists over certain things.

He, for example, is not worrying about whether he has the latest cell phone.

He’s too concerned with such matters as a client who could lose his residency.

“I think one thing I like about myself is that I’m somebody who doesn’t just sort of go with the grain,” he said. “I’m somebody who doesn’t take things at face value or follow the traditional path.

“I’m somebody who steps back and says, ‘Wait a minute. Let me see what is going on here.’ This path might not be the easiest thing for me. It will probably be hard for me. In the end it will be more gratifying, and more fulfilling.”

 

Closing Argument: Thirty years as a pro bono lawyer

By Kimball R. Anderson
Winston & Strawn

This year marks my 30th year as a lawyer in private practice. It’s been a good ride. As a commercial trial lawyer, I have worked on some of the most challenging cases in the country. I have ­argued commercial cases before the U.S. Supreme Court and in many other distinguished venues. With apologies to ABC’s “Wide World of Sports,” I have tasted the thrill of victory and the agony of defeat.

Winning big commercial cases, however, pales in comparison to the satisfaction achieved from my involvement in pro bono cases.

Indeed, little that I have accomplished as a commercial trial lawyer compares with the professional and emotional satisfaction of helping exonerate a man who was wrongfully convicted; representing a homeless mother and daughter and enabling them to return to some normalcy; successfully arguing pro bono cases before the U.S. Supreme Court and Supreme Court of Illinois; winning a federal jury award in excess of $750,000 for an inmate in a civil rights case; and fighting for the ­vindication of persons wrongfully detained.

In one respect, little has changed since I ­became a lawyer in 1977. The way to get ­immediate experience in court and with clients was to take pro bono cases. Accordingly, I signed up to handle Federal Defender ­Program trials, Seventh Circuit appeals, and Illinois criminal appeals. Then judges and journalists started calling me with interesting cases. I gained experience, confidence, and a marketable resume. All of these opportunities remain today for young lawyers looking to do so the same.

Several things, however, have changed since 1977. For example, in 1977, no one ­expected to be compensated for pro bono work. No one asked: “How much credit will I get?” No one asked for their pro bono work to be treated as billable time or as eligiblity for bonuses.

We just did it because it was the right thing to do and because it was good way to get ­experience. After all, the Latin term “pro bono publico” means “for the public good or ­welfare.” Somehow the meaning of that
term, to me, lost its significance if, instead of ­donating my time, I was demanding a bonus on top of my already inflated salary of $20,000 (yes, that was the starting salary at Winston & Strawn, where I started my career in 1977 and where I remain today — although my salary has increased modestly).

Other things have changed as well. Large law firms did not have pro bono committees, pro bono policies, and public-interest law ­directors. The American Lawyer magazine, which did not exist then, was not rating pro bono programs like restaurant reviews.

The legal profession has come a long way since 1977. Most large law firms formed pro bono committees in the 1980s and adopted formal written pro bono policies.

Most large law firms today are members of the ABA Pro Bono Challenge. Many have hired full-time pro bono directors. Almost all firms give ­formal credit for pro bono work. Many large law firms devote tens of thousands of hours annually to pro bono ­matters.

Despite the remarkable commitment of the private bar to the pro bono cause, the vast ­majority of low-income Illinois households are unable to obtain basic access to justice.

According to the 2005 The Legal Aid Safety Net: A Report on the Legal Needs of Low-Income Illinoisans, low-income Illinoisans faced over 1.3 million civil legal problems in 2003, ­ranging from child custody disputes, to ­mortgage ­foreclosures, and to cases involving the ­physical and financial abuse of the elderly. The 2005 ­report found that low-income ­Illinois residents were able to obtain the ­assistance of any attorney in only one of every six legal problems they encountered.

Despite the ­efforts of public-interest ­organizations and the private bar in Illinois, a huge unmet need exists for legal assistance with civil matters. And, according to the ­social ­scientists, this lack of access to justice fosters employment discrimination, homelessness, child abuse, drug abuse, street ­violence, and many of the social ills that ­dominate the news headlines.

We know that we have many good judges who want to help the less fortunate and help address social ills. And, we know that these good judges cannot help unless we, the lawyers, bring the cases to the judges. My New Year’s resolution is to re-double my ­efforts to bring meritorious pro bono cases to our judges.

Our profession has a remarkable and proud record of fighting for access to justice on ­behalf of the less fortunate. Indeed, no other profession can claim such public service. But there is more for lawyers to do. As lawyers, we enjoy the privilege of providing access to justice and we bear the obligation of providing pro bono legal services to those who are otherwise unable to afford legal representation.

Perhaps your New Year’s resolution also will be to represent someone who cannot ­otherwise afford to hire you. The professional and emotional satisfaction will be priceless.

Climbing the Ladder: The kind of lawyer I want to be

By Kamau Coar
Ungaretti & Harris

About a year after I started with ­Ungaretti & Harris, I ended up going to a dinner reception and sitting right next to one of the name partners: Rich Ungaretti. Like any young associate in that situation, I was very excited and a bit nervous about the opportunity to get to know one of the founders of my firm. After about an hour of small talk, Rich asked me a question seemingly out of left field: “How many hours do you think it takes to be a good lawyer?”

Immediately, my mind started racing to how many billable hours I had the previous year. At that moment it sure felt like I was way below expectations.

As I tried to hide any signs of what was racing through my head, Rich started to work his way through his own computations out loud: “We expect you to bill around 2,000 hours. Then you figure about 500 hours keeping up-to-date on what’s going on with new decisions and court rules. You need about 400 hours marketing and getting out there to know the legal community. Another 200 hours doing pro bono. …”

I stopped counting after Rich got to about 3,300 hours, but he kept on. “… You’ll ­probably also spend a lot of time helping out younger lawyers. I don’t know how you guys do it. There aren’t enough hours in the day.”

I don’t recall what I said in response, but I do remember leaving that night and feeling uncomfortable as to whether or not I was doing enough. I love working with Rich now, but he scared me that night.

There are a couple of different ways I could have taken this conversation. I could have started looking for a new job. Or, I could think long and hard about what kind of lawyer I wanted to be, and what goes into being that lawyer.

Looking back it seems ­simple, but that night Rich helped me realize that being a good lawyer requires much more than just doing what’s assigned to you. To ­become a good lawyer, you have to make yourself a good lawyer.

The most important step in making yourself a good lawyer is to keep in mind the lawyer you want to be.

To give our clients the best possible service, you have to keep the client’s goals in mind. It only makes sense that you do the same for your own career. The ­isolated assignments you’re given as a young attorney are just the tip of the iceberg of what you need to know to become a good lawyer. You don’t get the full picture just writing memos or reviewing documents. You need to use these tasks and the opportunities as building blocks, to learn how to become a good lawyer.

To that end, it is imperative that you ­surround yourself with people who will help shape you into the lawyer you want to be.

As a young associate, you’re asked to­ contribute information that is used to make ­decisions, but are not always included in the decision-making process. You have to find a way to ­understand the decisions that are being made based on your work, so you can one day ­become the person making those ­decisions.

You should make it a priority to find people who will help you understand your assignment’s impact on the whole picture and how to transition from handing a piece of the ­puzzle to the partner, to actually putting the puzzle together for the client.

It’s also extremely important to understand the businesses you’re working for. This ­applies to both your client’s business, as well as your firm.

As a young associate, the partners you are working for are essentially your clients and should be treated as such. In order to give them the best possible work product and to ensure that they want to work with you again, you must understand what the client’s goals are.

Each client’s issues are unique, and the circumstances may dictate a different strategy. You have to be prepared to give your clients answers catered to their specific situations. This may mean that you need to do ­non-billable research of the client on your own time.

In the law firm context, it may mean that you ask other people who have worked with a particular partner how to best present your findings on a particular issue. To effectively answer a client or a partner’s questions, you have to be in tune with the how that ­person does business and what they really want.

You should also perform pro bono service. In addition to the altruistic reasons to do pro bono work, pro bono is an excellent way to get meaningful experience as a young ­attorney. Senior attorneys will give you more responsibility if they know you’ve handled the kind of work they need to assign. Use your pro bono experiences to your advantage to get ahead.

I’m not sure if these are the messages that Rich intended for me that night, but it ended up being one of the most important conversations to my career.

If it’s not what Rich was trying to tell me, then I guess the last important lesson I learned on how to be a good lawyer is to find something positive and ­useful in whatever advice someone offers, even if it’s not the intended message.

 

Info Tech Law: Computer contracts — the four corners

By Alan S. Wernick
Wernick & Associates

Computer contracts are different from most other types of contracts. Often they include a mix of tangible and ­intangible property, technologies, concepts, and terms not found in many other contracts. A recent U.S. district court case points out some of the difficulties that can arise in a computer contract.

In Rockland Trust Co. v. Computer Associates International, Inc. (USDC, MA, 2007), the court had to interpret a software licensing agreement and addenda executed in late 1990 and early 1991 between a large bank (Rockland Trust Company, the plaintiff) and a large computer vendor (Computer Associates Inter­national, Inc., the defendant).

To put this in perspective, this computer contract dispute involved a business-critical software acquisition. The contracts were ­executed in 1991, with an addendum in 1993, and a complaint filed in July 1995, initiating a lawsuit that was finally resolved by the court in August 2007 - some 12 years later. A review of the court’s docket indicates a number of reasons for the delay, including numerous ­requests for extensions filed by both parties in the dispute, discovery issues, and multiple ­motions filed. In the Rockland case, the defendant, CAI, asserted $1,160,586.81 in attorney fees and costs - an amount slightly in excess of the unpaid invoices in CAI’s counterclaim!

The original computer contract provided, among other things, a limited warranty and an integration clause. One key focus of the dispute was the interpretation of this integration clause. The contract “integration clause” says in essence that what the parties intend is set forth within the “four corners” of the contract document and if not stated therein, it’s not part of the deal.

Several disputes arose, including one over the adequacy of the functional integration (not to be confused with the legal integration clause) of the various modules in the banking software delivered by CAI to Rockland. In ­reviewing the facts, the court noted that the agreement did not define the term “integration” (in the functional sense). The plaintiff, Rockland, argued that the brochures presented by CAI described the system’s functional ­integration, and were part of the contract. The court disagreed, pointing instead to the integration clause of the contract and noting that the brochures were not made a part of the contract. The court stated:

“In short, Rockland Trust received the Inte­grated Commercial Loans software it evaluated and purchased, and there is no evidence that Computer Associates failed to use its best ­efforts to correct problems, after having been informed that the product failed to meet the published specification. There is also no persuasive evidence that Computer Associates’ upgrade efforts were inadequate or below ­industry standards, even though they were ­ultimately unsuccessful.”

According to an SEC filing, Rockland paid CAI $1,089,113.73 plus prejudgment ­interest of $272,278.43, for a total of $1,361,392.16.

To date, the computer system acquisition contracts that I have personally negotiated and drafted have all gone to “system works” and none of them have resulted in any liti­gation. Thus, my involvement in computer system contract disputes has been when some­one else has drafted the computer contracts and a problem has arisen, or I am reviewing the computer contract in my role as an arbitrator or mediator.

In that role, I have encountered numerous other examples of issues relating to the integration clause, including performance failures due to data conversion problems (the contract failed to define the conversion process); inadequate response time (the contract failed to define response time); or scope of use problems (the contract failed to define how or where the software was to be used).

Given that the integration clause states that the terms of the agreement are completely contained within the four corners of the ­document, whenever the contract fails to properly address a particular issue, conflicting interpretations can arise that can lead to legal disputes.

Acquisition of any reasonably sophisticated computer system embodies unique aspects, and each should be examined through the lens of the contract’s integration clause. The Rockland court highlights this perspective when it states: “[Functional] Integration is not defined in the License Agreement, and is mentioned only in the title of the three software components. … I find [Rockland] has failed to meet its burden of demonstrating that the [CAI] software package lacked contractually mandated ‘integration,’ even if the term is construed broadly.”

The bottom line is that the contract’s integration clause is a very important provision in the agreement. Often when speaking with a client about the computer contract provided by the other party I will focus the client’s ­attention to the integration clause first, and then discuss the remainder of the contract. In discussions about a computer system ­acquisition - particularly a business-critical acquisition - when something is identified as important, then it should be properly ­included within the four corners of the ­agreement.

©2008 Alan S. Wernick
alan@wernick.com

Diversity in Practice: For diversity, against change?

By Arin N. Reeves, J.D., Ph.D.
The Athens Group

In a recent leadership dialogue on diversity at a large law firm, the managing partner, a white man in his late 50s, said, “Arin, you have to understand, I’m not against diversity. I’m against change.”

He proceeded to lament how the informal mentoring he experienced as a young associate and used as a partner had to change because it wasn’t inclusive of ­minorities; how career tracks had to change because they weren’t working for women; and how feedback and evaluation systems had to change because they weren’t working for the younger generation.

“It sounds like you are saying diversity is about getting old white guys like me to change everything about the way we do things. I don’t like change.”

The Association of American Law Schools’ (aals.org) annual conference in January, entitled “Reassessing Our Roles as Scholars and Educators in Light of Change,” focused on how the changes in demographics, the legal market, the needs and expectations of Gen Y, and technology were requiring dramatic changes in the way law schools (and law professors) defined and structured … well, everything.

Change is dominating discussions in law firms, the legal education system, corporate legal departments (clocalltoaction.com), and even the public sector. Lawyers are leaving the legal profession in record numbers because it is not changing fast enough (NALP, ABA).

Then, there is Law Students Building a Better Legal Profession (BBLP), “a national grassroots movement” that wants to change the legal profession’s commitment to work-life balance, diversity, and pro bono.

BBLP, led by two white male law students and buttressed by attention from Chicago Lawyer, the Wall Street Journal, The New York Times, the Los Angeles Times, CBS, and the ABA Journal, wants to encourage “students deciding who to work for after graduation, corporate clients deciding who to hire, and universities deciding who to allow on campus for interviews - to exercise their market power and engage only with the firms that demonstrate a genuine commitment to these issues.”

Even the 2008 presidential candidates - the most diverse field of viable candidates to ever run for the country’s highest office - are primarily campaigning on the need for and promise of “change.”

With change and diversity intersecting in so many inextricable ways - is it fair to ­assume that resistance to diversity is merely a resistance to change? If so, what can the field of diversity learn from the field of change management?

Change management generally requires us to transcend the discussions on whether we should change to discussions on how we can thrive when change is inevitable. Managing change then requires us to move past the ­polarizations of change as accommodations by some to benefit others and leverage change as ­required by all for the benefit of all. Last, but not least, change management requires us to under­stand that change is hardest for those who have benefited the most from the status quo.

As the focus on diversity continues to ­collide and merge with the focus on change, advocates for diversity will be well served by using principles of change management to drive their diversity efforts. This will require that we stop talking about diversity as a racial minority or gender or GLBT or generational issue and start talking about diversity as an ­integral component of inevitable change.

This does not mean, of course, that we abandon the necessary work of fighting stereo­types, conscious and unconscious biases, and other barriers to full inclusion. It does mean, however, that we reevaluate the way we frame and communicate our efforts so that we don’t echo the resistance to change that we cite as a barrier to change.

The younger generation is leading the charge on reframing diversity as a value instead of an objective. Among lawyers under 35, the gap between men and women in relation to the priority of work-life balance has almost ­disappeared. Young male lawyers are as likely to leave a workplace because of work-life ­conflicts as young female lawyers, and both are equally willing to take less money to ensure work-life balance (AmLaw Surveys 2007). Young white lawyers are almost as likely to pick a workplace because of its diversity as young minority lawyers (BBLP).

The time has come for diversity efforts to be integrated into overall retention efforts ­instead of being stabled in women’s initiatives or minority initiatives. As this younger generation (and the “change is the only constant” millennium they represent) enters the legal profession, we no longer have the luxury of asking if we are comfortable with change. The question we have to ask, and ­answer, is, how can change make us a stronger profession?

In light of the managing partner’s candor about his dislike for change, we shifted the focus of the meeting from “how do we change to achieve diversity” to “how can we lead the firm to be a better and more diverse firm in light of the inevitable changes happening in our profession.” Perhaps the shift did not make change any more palatable to those around the table, but it did make the need for their leadership in changing times more apparent.

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