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The subprime mortgage crisis, credit crunch and U.S. commercial real estate retraction that has forced some law firms to shed workers and lawyers is prompting DLA Piper and other international firms to focus their real estate practices on overseas work. Real estate lawyers at firms like Baker & McKenzie, DLA Piper and Jones Day are increasingly helping U.S. companies invest in overseas projects, assisting foreign investors buying U.S. infrastructure and real estate, relocating select lawyers overseas and using U.S. lawyers to staff overseas real estate deals. The credit squeeze has turned off the spigot of structured finance, capital markets and corporate work and spawned layoffs or departures at several major firms in recent months. Firms affected by the fallout include Cadwalader, Wickersham & Taft, McKee Nelson and Thacher Proffitt & Wood, all New York-based; Sonnenschein Nath & Rosenthal; and Thelen Reid Brown Raysman & Steiner. DLA Piper’s real estate lawyers are focusing on helping U.S. companies, including financial institutions and hotel conglomerates, chase development opportunities around the globe, said Jay Epstien, a Washington partner who chairs the firm’s U.S. real estate practice group. ‘Outbound’ work “Outbound [commercial real estate work] has become a much more important part of our real estate practice in the last three to five years,” Epstien said. Those capabilities and connections are increasingly important in light of the falloff of securitized lending and the slow pace of transactions, Epstien said. “It puts a higher premium on the ability to handle transactions outside the U.S. where the consequences of the U.S. credit market situation are felt in different ways,” Epstien said. DLA Boston partner Joe Christian is relocating to Hong Kong this fall after moving to DLA in May from Wilmer Cutler Pickering Hale and Dorr, where he chaired that firm’s real estate capital management group. Christian is helping client Gale International LLC work with a South Korean company to develop a 1,500-acre economic zone in Inchon, South Korea, called New Songdo City. “The opportunities in real estate are going to be a bit slow in this country for a bit,” he said. “There are opportunities in Asia if you pick the right spots.” Just in the firm’s Boston office, the chairman of DLA’s Boston real estate group, John Sullivan, is focusing much of his energies on real estate funds in Europe, and partner Larry Uchill’s largest clients are from Australia, said Boston managing partner Elliot Surkin. Baker & McKenzie has always had a global orientation, and international real estate work is booming as business becomes more global, said Chicago partner Michael S. Smith. As clients like Chicago-based real estate developer John Buck Management Group Ltd. do more work overseas, Smith’s work has shifted from helping it with U.S. leasing work to advising on its overseas acquisitions and formation of a development company to build a financial center in Abu Dhabi in the United Arab Emirates. Smith also advises foreign investors seeking to buy distressed U.S. real estate and U.S. transportation infrastructure such as roads and bridges. “International work is more than making up for the loss of the domestic work,” Smith said. “Now the world is becoming really connected and we have the platform that companies can use to tap into that connected world.” Smith estimates that his U.S. real estate colleagues are spending at least half their time on international transactions for U.S. clients or helping foreign real estate investors with transactions in the United States. About 40% of Jones Day’s 100 or so real estate lawyers work in one of the firm’s overseas offices, and stateside lawyers sometimes work on their transactions, said David Lowery, a Dallas partner who co-chairs the firm’s real estate practice. A couple of months ago, for example, some of Jones Day’s U.S. associates worked on documents for lawyers in the firm’s Hong Kong office, who were representing the seller of an office building in Macau, Lowery said. “We’re already positioned to capture our share of the market [outside the United States] because we’re already on the ground,” Lowery said.

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