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Patent lawyer James A. Gale of Miami’s Feldman Gale & Weber laments losing two of his intellectual property lawyers to e-business start-ups that were clients, which lured the lawyers away with stock options. But Gale’s situation shouldn’t be surprising. Intellectual property is now the single hottest practice area in South Florida. So, Gale, whose firm has grown from six to 11 intellectual property lawyers in the past 12 months, isn’t complaining too much. But it’s not the only hot specialty for South Florida law firms. Intellectual property, deal making and commercial litigation are at the forefront of fast-growing practice areas, moving ahead of real estate, health care, insurance defense and bankruptcy. The following is the Miami Daily Business Review’s look at the industries that are fueling the booms and busts at Florida law firms: E-BUSINESS: AN EXPLOSION As technology fuels both innovation and stock market shifts, it’s not surprising that this practice area includes a variety of specialties, including attorneys with intellectual property knowledge and deal-making abilities. The practice area is boiling over nationwide, says Dixie Lee LaSalle, a partner with Seyfarth Shaw of Chicago and chair-elect of the American Bar Association section on law practice management. With fewer than 2.5 percent of all lawyers registered with the U.S. Patent Office, adds Gale, there’s no end in sight to the wage-price spiral for a limited pool of these highly specialized attorneys. “The explosion has begun in South Florida,” says Jose I. Rojas, who heads Holland & Knight’s Miami e-business practice group. South Florida is the Internet capital of the Americas, he adds. “It’s our physical location and historical role in international Latin American commerce.” Scrambling to carve out markets in the e-business boom, firms are re-tooling to keep pace with demand for one-stop legal shops to find venture capital, develop a business plan, and protect an increasing array of dot-com property rights. Battling domain pirates and cybersquatters, securing patents for e-business methods as well as enforcing critical non-compete, trade-secret agreements demand niche lawyers with a high degree of skill and technical education, say Gale and Rojas. One of those firms re-tooling to meet the e-business challenge is Gunster Yoakley, which is based in West Palm Beach with offices in Fort Lauderdale and Miami. The firm created its e-business practice group in 1995 with three lawyers, says executive committee member Michael S. Greene of the Miami office. It’s now up to 16, geared for intellectual property, litigation and commercial deals. Shutts & Bowen, with 140 lawyers at its five Florida offices, created its e-business group last year, says Bowman Brown, chairman of the firm’s Florida executive committee. Now it has three lawyers devoted to e-commerce. “We are pushing people in the firm with some specialized knowledge and getting new people out there to be in contact with the players,” Brown says. His firm has grown from 93 attorneys in 1995 to 131 in April. The e-business, IPO surge produces much larger corporate departments, says lawyer headhunter Rick Rahaim of Howard Williams & Rahaim in West Palm Beach. But if the Nasdaq high-tech start-up market continues to fluctuate, there could be some downturn in demand for corporate deal makers. But for now, deal-making lawyers are the hottest commodities followed by intellectual property lawyers, says Jhan Lennon, head of attorney placement at Auslin Legal Staffing in West Palm Beach. Spiraling demand for corporate transaction and intellectual property lawyers is fueling the trend, says Brian Mangines, president of Auslin. Mangines says it’s a very tight labor market for top talent. Auslin has placed about 15 lawyers since the firm’s start three years ago. Top associates can command between $95,000 and $110,000 a year. Any lawyer with a heavy computer or scientific background markets well, says Lennon. As the associate salary-bonus spiral evolves, intellectual property and full-service firms will face having to offer significant pay increases, he adds. To counter the stock option craze, Gale plans on beefing up salaries and firm benefits. Some associates are now earning more than nonequity partners in firms with tiered partnership schemes, says Rahaim. COMMERCIAL LITIGATION: NO RECESSION Litigation “has always been strong and is recession proof,” says Jay B. Shapiro, a partner with Stearns Weaver Miller Weissler Alhadeff & Sitterson in Miami. “General transactional work and real estate work may feel the pinch if the economy shrinks. We’re positioned for both.” Boutique litigation firms like Ferrell Schultz Carter Zumpano & Fertel in Miami expect recent interest rate hikes will lead to more suits as more people who are over-exposed and over-expanded cannot make higher payments, says partner Tom Schultz. Former Gunster litigator L. Louis Mrachek of Page Mrachek Fitzgerald & Rose of West Palm Beach and Stuart agrees that the future is bright for commercial litigators. Stephen C. Page, Alan B. Rose, Roy E. Fitzgerald and Mrachek left Gunster in February to form a commercial litigation boutique. They plan to add 15 to 20 lawyers in the next few years, to meet a growing demand for experienced commercial trial lawyers in Palm Beach County. Mrachek and others say employment law continues as a fertile, expanding commercial battleground — especially Title VII civil rights discrimination claims lodged in federal trial courts. There’s also a steady flow of suits against ex-employees of high-tech companies as companies seek enforcing noncompete agreements, which parallels the e-business boom. HEALTH CARE: IN FLUX This is considered one of the least attractive practice areas in terms of growth potential, in part because much of the industry’s rapid expansion of the past decade seems to be slowing down. Major hospital chains are in financial turmoil and the managed-care sector is in a state of flux. Health care transactional work is “cold,” says attorney recruiter Rahaim. Of course, not everyone agrees. Bill Spratt, a partner with the 570-lawyer firm Kirkpatrick & Lockhart, argues that health care is still hot. He says the health care industry is creating new business-to-business Internet companies, evolving systems to share data, order pharmaceuticals and medical supplies. Also, Spratt explains that every health care business doing electronic billing using data storage must comply with new Health Care Financing Administration regulations coming on line in July. The regulations deal with Internet security, confidentiality and privacy. Compliance will be a “very hot” source of new work. BANKRUPTCY: ‘HERO TO HUNGER’ This is another cool spot in South Florida. Many law firm executives say bankruptcy and insurance defense practices are shrinking or remaining static. Greene of Gunster Yoakley dubs bankruptcy a boom and bust area where you go from “hero to hunger.” Thanks to liberal bankruptcy rules in Delaware, law firms continue to file choice bankruptcy cases in that state, taking them out of South Florida. And at least one law firm merger was forced by a drop-off of bankruptcy business as Robert Schatzman and partner Robert Schantz joined Adorno & Zeder in Miami last fall. But a few bankruptcy lawyers like Paul Singerman of Davis Berger & Singerman in Miami and Fort Lauderdale, John Kozyak of Kozyak Tropin, Gary Rotella of Rotella & Associates in Fort Lauderdale, and Arthur Halsey Rice of Miami, say they have done well as court-appointed trustees or receivers. “We are wonderfully busy,” said Singerman, a 16-year veteran bankruptcy attorney. Although he would like to see more big filings in South Florida, Singerman says his firm of 37 attorneys works to reorganize companies and litigates corporate securities, real estate, tax, trust and estates and environmental cases. He says the firm has grown by eight lawyers in the past 12 months. “Our people on the transactional side are very busy,” he says. “Unless we are eyes wide open to the marketplace and unless our path is clearly charted — tangible goals articulated to team and staff — we will get sucked by fate instead of purpose,” Singerman says. REAL ESTATE: PLENTY OF DEALS Even as South Florida’s legal industry reshapes itself to an explosive e-business climate, some practice staples remain strong, including domestic and international real estate practices. Despite large developers importing legal talent for the largest commercial real estate deals, the real estate practice will remain strong, says Greene of Gunster Yoakley. “Miami-Dade will be perceived as growing, attractive, even a sexy environment to work and live.” Gunster has continually added bilingual lawyers to its resort and hospitality practice division, representing clients like Sol Melia, the world’s largest upscale resort developer, which is based in Spain. South American businesses are also investing more in Florida real estate, says Thomas L. Raleigh III of Akerman Senterfitt. These companies are using Miami as its U.S. operations base, so the firm has a dozen Spanish-speaking lawyers for those transactions. With these property deals, there’s always a need for an environmental assessment, says Charles “Chuck” Kline, executive partner of the Miami office of New York-based White & Case. Kline has added five lawyers to the firm’s South Florida environmental team. “Major lenders and investors will want a Western-style evaluation of environmental risks,” Kline says. LEGAL MALPRACTICE: MISTAKES PAY And as more and more lawyers chase a smaller pool of lucrative clients, mistakes will be made. Enter Warren Trazenfeld, a Miami lawyer, who makes a living suing other lawyers for malpractice. The number of cases he screens has vastly increased in the past year, he says. And although he accepts only between 2 percent and 3 percent of all cases brought to him, the payouts from these claims have soared along with the number of mistakes made. The average insurance payout in 1998 was $143,000, compared with $37,500 in 1989, according to the Florida Department of Insurance. “I think mistakes will continue to increase as law schools turn out more lawyers for too few jobs,” Trazenfeld says. He reports that only about 40 percent of Florida’s nearly 66,000 lawyers carry malpractice insurance. He would like to see Florida join Oregon, the only state that requires all lawyers to carry minimum levels of malpractice insurance. DISPUTE RESOLUTION: A NICE NICHE While bread-and-butter practices are doing well, niche practices, such as alternate dispute resolution, are also expanding. Charles “Chubby” H. Damsel Jr. of West Palm Beach, a former insurance defense litigator, has turned his senior talents to ADR as a certified mediator. It’s an expanding area, and although the Florida Supreme Court is training and certifying more mediators, “really very few are really qualified mediators,” he says. Semi-retired judges and those who have paid their dues “in the trenches” seem to produce good results. Damsel says he experiences between 65- and 70-percent dispute resolutions in his work. He charges between $165 and $175 an hour. Increased reliance on ADR is part of a national trend. A record 400 to 500 lawyers attended last year’s ABA institute on ADR, according to ABA public affairs assistant Diane Carr. Other ADR programs are emerging in family law — the collaborative divorce, where all parties agree to compromise and avoid litigation, thereby minimizing the emotional scarring and increasingly higher cost of divorce. INSURANCE DEFENSE: COLD Another high-risk practice area is insurance defense, except for the continued growth of in-house insurance defense lawyers or “staff counsel,” as they wish to be called. With insurance companies imposing HMO-type restrictions on how claims should be defended and with increased use of outside fee invoice auditing firms, outside insurance defense practices continue to be squeezed. Mangines, whose legal staffing firm also places legal secretaries and paralegals, notes that the highest turnover of legal support personnel is in insurance defense firms, since they pay the least. That’s one indicator the practice remains in trouble, he says. “Insurance defense is so cold, it’s not even on my radar screen,” adds Rahaim. But certain new insurance products like employment practices liability insurance triggers litigation, says Michael Fertig, a partner with Akerman Senterfitt’s litigation group. Sports disability policies also provide new work, he adds. And then there’s the increase in municipal suits in federal and state courts. Still, concedes Fertig, larger insurance companies like State Farm and Allstate are taking a lot of cases in-house, shrinking the insurance defense market. One source of encouragement for outside insurance defense firms: The Florida Bar’s Insurance Practices Special Study Committee on June 2 recommended that the Florida Supreme Court in January 2001, approve proposed ethical rules that severely limit insurance company HMO-like controls and fee audits on the defense bar. Other niche domains that attorneys say will likely remain lucrative: � Banking will continue as a staple of a national practice, says Kline of White & Case. � White-collar criminal defense and sophisticated constitutional litigation practice niches will continue to prosper, says Gunster Yoakley’s Greene. � Trust and estate planning will remain a strong staple for niche and full service firms, says Wesley A. Lauer, managing partner of Arnstein & Lehr in West Palm Beach. Palm Beach County continues to lead Broward and Miami-Dade in terms of the number of lawyers gaining Florida Bar certification status in trust and estates, along with real estate, business litigation and civil trial law from 1997 through 1999, according to John Tan of the Bar’s legal specialization and education department.

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