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Katrina's Lingering Effects on New Orleans Lawyers
Leigh Jones
The National Law Journal
February 16, 2006

Walk along the main streets of New Orleans' French Quarter and you will find restaurants and bars ready for business, with music spilling out of their open doors. Tables are set, ceiling fans are churning and servers stand poised for customers.

A few blocks away, in the business district, the town's streetcars have begun again to lumber past upscale shops, the Aquarium of the Americas and Harrah's casino.

But the streetcars roll along eerily empty for the most part, and many of the retail businesses remain boarded up.

"What's worse than the devastation is that all of the people are gone," said attorney William Rittenberg during a recent drive through the French Quarter. A small-firm practitioner who has worked in New Orleans for 35 years, he said he had not taken a paycheck from his six-attorney firm since Hurricane Katrina struck.

"I worry about whether I can remain here," he said.

Rittenberg, a partner with Rittenberg & Samuel, is just one of thousands of New Orleans lawyers whose jobs took a drastic turn in September. As a small-firm lawyer, he is struggling to make a living in a town where much of his client base has disappeared. Other attorneys, such as Gary Elkins, who runs a midsize practice in the business district, and Richard Dicharry, chairman of 248-attorney Phelps Dunbar, have found, at least for now, former work replaced with rebuilding efforts and disputes arising from the destruction.

DESPONDENCY AND HOPE

Whatever the size of the firm these New Orleans lawyers come from -- whether it is a solo practice, a large operation or somewhere in between -- the path their lives have taken five months after the storm-like-no-other has been marked with despondency and with hope.

"Everything's in limbo," said Elkins, a tax and real estate lawyer at 10-attorney Elkins PLC.

In Rittenberg's case, he and his wife of 38 years, Paulette Rittenberg, a food writer, evacuated their uptown home on Aug. 28, 2005. Heading out to Columbus, Miss., in their Toyota sedan, the Rittenbergs packed two days' worth of summer clothes with them, as did many people in the area who expected to return home once the storm passed.

What they thought would be a minor inconvenience turned into two months of basic homelessness, in which they lived at first off credit cards, having no access to their bank accounts. From Columbus, they traveled through Louisiana, Texas, New Mexico, Colorado, Kansas and Oklahoma, mindful not to overstay their welcomes at any of their friends' and relatives' places.

Rittenberg's mother, 93 years old and living in a New Orleans nursing home, was evacuated to two different facilities following the hurricane. She died on Sept. 14, while the Rittenbergs were on the road.

"Three days after the storm, I knew I was never going to see my mother again," he said.

When he returned to New Orleans on Oct. 31, he found his office on Girod Street largely undamaged, but his practice in a shambles. In addition to representing the United Teachers of New Orleans and the Jefferson Federation of Teachers, Rittenberg's office also had busy criminal defense, civil rights and personal injury practices.

Rittenberg, a 1970 graduate of Tulane University Law School, is a familiar figure in the New Orleans legal community, in part for filing Bowman v. Landrieu, 747 F. Supp. 344, in the late 1980s. Seeking to overturn a city ordinance prohibiting street music, he argued on behalf of French Quarter musicians. The federal district court determined that music was a form of speech deserving of First Amendment protection, and the city signed a consent decree following the ruling.

But now, with most of the area's schools still closed and much of its minority and working class population scattered across the county, Rittenberg faces the biggest challenge of his career.

"I thought I was settled. I thought I had a comfortable life," he said. After he came back to New Orleans in October, he received $12,500 in checks given to him by friends who were lawyers.

"I'm kicking myself, but I returned them," he said.

About 7,500 attorneys had offices in the New Orleans area before Hurricane Katrina, but the number of attorneys now in the area is unclear. The legal service directory Martindale.com lists the number of attorneys with New Orleans addresses at 5,352.

Of those lawyers practicing in the city, about 50 percent worked solo or in small firms, estimated Carmelite Bertaut, president of the New Orleans Bar Association. The rest, she estimated, worked in large firms and midsize practices, which, for the region, means firms with about 10 to 30 attorneys.

Rittenberg expects most lawyers eventually to return to New Orleans, but he is worried that small-firm and solo practitioners will not have the clients to support their practices. He said that unlike the many physicians who have left the city, lawyers may be unrealistic about the amount of work available.

"Doctors understand the direct correlation between population and business," he said. "Lawyers think, 'Maybe next week I'll get a case.'"

A total of about 645,000 people were displaced by the storm, according to a study released in November by the Congressional Research Service of the Library of Congress. Roughly 77 percent of New Orleans' population was affected. Some 44 percent of the total number of storm victims were black, the study concluded.

"I don't have a clue now what will happen," Rittenberg said. "I will take whatever cases come in."

He said that if tourism returns, his criminal defense work may pick up. He also plans to take more personal injury matters than before, and is expecting the number of those types of cases to increase. "Katrina stress has not been good for relationships," he said.

WAITING IN LINE FOR PANTS

At his offices in the Canal Place building, Richard Dicharry is grateful for the end to what he called "a hard year" at Phelps Dunbar. He also is apprehensive about 2006. "I'm hoping we can get through this hurricane season," said Dicharry, chairman of the firm's management committee.

All told, Phelps Dunbar, which has about 90 attorneys in its New Orleans office, ended 2005 with about $84 million in revenues, a figure that was $3 million ahead of 2004 revenues and within 5 percent of the firm's budget for 2005, he said. Hardest hit was its litigation practice, which suffered because of court closings and attorney displacement at practices throughout the area.

"You can't litigate a case by yourself," he said.

Courts have since opened in the area, but mail service is spotty, hampering correspondence between the courts and attorneys and among attorneys themselves, said Bertaut, with the bar association.

After the levees broke and sent four or more feet of water into the homes of more than 50 percent of New Orleans' residents, Phelps Dunbar leaders considered having partners and employees work from home -- or where they were living temporarily. But they soon discovered that it was important for people's morale to have an office to go to.

"The worst possible message was to tell people to go back to Uncle Joe's house and to work from a laptop," said Michael Hunt, a partner in the firm's Baton Rouge, La., location who was instrumental in getting its offices back online.

During those first few weeks in Baton Rouge, where New Orleans employees worked following the storm, maintaining a focus on the practice of law was difficult, Dicharry said.

"People had to get up at 5 and go stand in line at Wal-Mart for a pair of pants," he recalled.

What concerns Dicharry about 2006 is a repeat of the technology nightmare last year, when the hub of the firm's administration functions was based in New Orleans. Following the storm, many of the operations at its eight offices were paralyzed for several days. "We're struggling from a technology perspective," Dicharry had said on Sept. 8, when contacted at the firm's Baton Rouge location.

One of the largest law firms based in New Orleans, Phelps Dunbar is perhaps more vulnerable during hurricane season than any other big law firm in the country. In addition to New Orleans, it has offices in Baton Rouge; Houston; Tampa, Fla.; and Gulfport and Jackson, Miss. It also has locations in Tupelo, Miss., and in London. Six of its offices were closed at one time or another during hurricane season last year. Hurricane Wilma threatened also shut down its Tampa office.

Dicharry and other leaders at the firm had a disaster recovery plan in place before Katrina, which included housing the firm's main electronic data center on the 22nd floor of the Canal Place building in New Orleans and maintaining backup capability in Jackson.

The problem presented by Katrina, Hunt said, was that the New Orleans office, although relatively undamaged, lost power and communications for weeks. That situation, combined with a loss of power in Jackson and heavy damage to communication lines throughout the region, crippled the firm's basic operations.

Its e-mail, accounting functions, litigation support, conflicts data, Internet connection and access to remote documents shut down completely. Five days after the hurricane struck, with Hunt and others working long hours, Internet and e-mail access for the firm was functioning again. It took several more days to restore other administrative capabilities.

Once Phelps Dunbar was back online, its leaders began rethinking its disaster plans.

"Looking forward, we could go back to the same system and hope for the best," Hunt said. "But Katrina proved you cannot predict the scope of an interruption, so making a bet on the path or extent of future disruptions was not attractive."

Today, the firm is in the midst of establishing so-called tier 4 technology, a kind of data and electronic access bunker that will be located at an offsite facility. Hunt and others are in the process of selecting the facility's site, which will be designed to withstand natural and man-made disasters.

The new strategy requires "well over a million dollars" just to get the firm ready for implementation, Hunt said. Phelps Dunbar is buying a new main server, storage devices, switches and software for the system. Leasing the facility will cost "a few hundred thousand dollars a year," he said. Fully implementing the plan, he said, will take two to three years and cost several million dollars. But the higher degree of certainty is worth it for the firm.

"You don't have to guess where to centralize technology," he said.

The storm also served to add certainty to the law firm's regional strategy, Dicharry said. Founded in 1853, it began expanding in the mid-1980s. The last office it opened was in Tampa, in 2001. Although Phelps Dunbar's roots are in New Orleans, its continued success, at least in the near future, may come from relying on its other offices.

A few blocks across the business district, Gary Elkins' office on the 44th floor of Place St. Charles has a view that overlooks roof after roof covered with royal blue tarps. Issued by the Federal Emergency Management Agency, the tarps are temporary measures spread across the tops of damaged buildings. They create a kind of dismal jigsaw puzzle, from Elkins' vantage point.

He has spent 17 years building a 10-attorney firm that focuses on real estate development, tax and finance work. Before private practice, he served on the staff of the Judge Advocate General of the Navy, and was one of six attorneys responsible for all federal litigation involving constitutional and administrative law for the Navy.

"It's like part of the city has been amputated," said the 53-year-old Louisiana native who heads the firm. "It's a difficult frustration to live here."

He and his wife, Kate Elkins, evacuated with their Schnauzer, J.D., to his parents' home in Baton Rouge before the storm. The Elkinses' four children live outside of New Orleans.

A week later, the couple "snuck back in" to New Orleans at dawn, he said, by driving their Chevrolet Tahoe through Jefferson Parish and around road blocks set up at New Orleans' perimeters. "There was an absence of life -- no people, no dogs, no cats. The only sounds were Humvees and helicopters," he said.

They wanted to get a look at their home, which they discovered had fared better than many. Although a 40-foot cedar tree had crashed onto the front of their 100-year-old house and windows were blown out, it was not flooded.

The firm's offices, too, were in good shape, perched high above the flood waters. But with no electricity, water or authority to resume work there, they moved operations to Baton Rouge, where they practiced in cramped quarters until Oct. 31. The firm "cannibalized" the New Orleans office by hauling out computers and other equipment -- sometimes without the aid of elevators -- for the Baton Rouge site. For several weeks, much of Elkins' attention was focused on arranging housing for attorneys and staff.

Up to the time that Katrina hit, revenue for the Elkins firm was 2.4 percent ahead of the same period in 2004, he said. Factoring in the final quarter, post-Katrina, revenue was down 4.8 percent for the year.

"The good news," said Elkins, is that once the firm collects its business-interruption insurance, it should break even for 2004. Elkins said that one attorney from his firm who was "overwhelmed by the tragedy" decided not to return to New Orleans following the hurricane, but that all other lawyers are back at work.

So far in 2006, business is brisk, he said. With a practice that emphasizes commercial real estate deals, he is busy with reconstruction and redevelopment projects. Insurance disputes also take up much of his time, he said, as parties battle over proceeds from claims held in escrow while the fate of properties remains uncertain.

"As tragic as it might be, we were in the right place at the right time," he said.

Also uncertain, however, is the future of commerce in New Orleans, which most likely will determine the ongoing success of his firm. New Orleans has experienced difficulty in enticing new businesses to the area because of its "abysmal public education system," Elkins said. A reputation for crime and government corruption also has deterred companies from locating in New Orleans.

A TOURISM-BASED ECONOMY

Since the late 1980s, the local economy increasingly has relied on tourism, which the Elkins firm, established in 1989, has tapped. He has worked on some of the bigger commercial deals in the city, including the New Orleans Riverwalk. In addition, his firm has handled several residential projects for both market-rate and affordable housing sectors. He is a 1976 graduate of Louisiana State University Paul M. Hebert Law Center with an LL.M. in taxation from Georgetown University Law Center.

Describing himself as "always optimistic," Elkins is encouraged by the Gulf Opportunity Zone Act, a tax-incentive bill dubbed the "Go Zone" that President Bush signed in December. The law enables businesses to claim a first-year bonus depreciation deduction equal to 50 percent of the cost of property investments made in hurricane-damaged areas. It also gives manufacturers a deduction equal to half the cost of equipment.

Today, Elkins describes New Orleans as a "frontier town" that is populated with hundreds of local and out-of-town workers demolishing homes, replacing glass, painting and more.

While recognizing the enormous rebuilding work that already has occurred since the storm struck, Elkins is concerned about re-establishing the city's cultural base with local talent.

"Memphis, Austin and San Francisco are actively recruiting our chefs, musicians and artists," he said.

He is a big supporter of celebrating Mardi Gras this year, and not just from an economic standpoint. He asserts that the city can help heal itself emotionally by recognizing the event. "It's about spirit and resilience, not because everything is comfortable and back to normal," he said.

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