Fishing For A Niche

There was a time when studies of a deep-sea Caribbean sponge by oceanographers at the Harbor Branch Oceanographic Institution in Fort Pierce, Fla., would have been interesting only to other scientists. No longer. These days, attorney David Saliwanchik, managing partner of the 11-lawyer intellectual property boutique firm Saliwanchik Lloyd & Saliwanchik in Gainesville, Fla., is closely following every step of their scientific quest, starting at the ocean floor. His job is to protect the Harbor Branch scientists’ commercial rights to any practical applications that result from their research. IP law is a highly specialized field whose practitioners must feel as comfortable in the laboratory as in the law library. For those with this unusual combination of knowledge and skills, business is very, very good. And it’s probably going to get better, because clients who need IP lawyers — from oceanographers to software designers — are multiplying. But IP attorneys aren’t the only ones canceling vacations and working weekends to keep up with burgeoning demand for their services. Deal makers, commercial litigators, employment lawyers and mediators are also reaping the windfall of a booming economy. With the explosive growth of new practice areas, law firm managers are spending lots of time trying to determine which practice groups to ramp up and which to gear down. But what are the hottest legal growth fields? And how should law firm managers make these calls? The best way is to listen carefully to the needs of your existing clients, says law firm consultant Bill Cobb, president of WCCI Inc. in Houston, Texas. Resist the temptation to add a promising new practice area just because it’s trendy and lawyers with sexy client lists are available, he warns. If you do surrender to this temptation, be prepared for the risks, Cobb counsels. “If the [lawyer] you bring in doesn’t have a synergistic relationship with the clients you already have, you’ve created a pod that can leave at any time,” taking your clients along, he says. For Flordia’s largest firms, strategizing about what fields to enter means adjusting their mix of services to take advantage of surges in certain sectors. Charlie Schuette, managing partner of Orlando, Fla.-based Akerman Senterfitt, believes it’s perilous to bet too heavily on any one practice field. His fast-growing 270-lawyer firm chooses new practice areas mostly by listening to current clients. Right now, Akerman, like many firms, needs as many IP lawyers at it can get. It’s also developing a practice group tailored to agricultural clients, including corporate, real estate and estate planning lawyers. In Tampa, Fla., 190-lawyer Carlton Fields is beefing up its telecommunications and insurance regulatory practices to serve the growing needs of its existing telecom and insurance clients. At the 90-lawyer Stearns Weaver Miller Weissler Alhadeff & Sitterson in Tampa, partner Ronald L. Weaver says the firm looks at three to five new practice areas each year to determine which ones fit snugly with its 12 existing departments. This year, the firm decided to recruit two veteran litigators to bulk up its antitrust and IP practices. “It’s half art and half science,” Weaver says. As the following tales demonstrate, listening closely to your clients is important in discovering lucrative new niches. But so is serendipity. David Saliwanchik built his practice on the pioneering work of his late father, Roman, who began his career as an in-house patent lawyer for Upjohn Pharmaceuticals. His father argued the first-ever appellate case about patenting a living microorganism. In 1990, shortly after earning his law degree, he and his father went into practice together in Gainesville, Fla. They rode a wave of pharmaceutical patents that resulted from the government’s rich AIDS research funding. Saliwanchik Lloyd’s client list has grown to include an international roster of universities, research organizations, software companies and biotechnology pioneers. Its number of new patent applications has nearly doubled in the last five years to more than 300 this year. Biotechnology companies make up one-third of Saliwanchik’s clients, with agricultural biotech a growing subspecialty. Computer-based technology accounts for most of the other two-thirds of the firm’s work. Saliwanchik’s scientist-clients at Harbor Branch had discovered that a particular sponge, Discodermia dissoluta, produces a compound that seems to shrink tumors. The attorney arranged a licensing agreement between Harbor Branch and Novartis Pharmaceutical Corp., which was intrigued by the compound’s medical potential. If the research yields a marketable drug, the payoff for Harbor Branch and its scientists could be immense. Harbor Branch technology transfer associate Susan Allen says she and her colleagues are in constant touch with attorneys at the firm. In fact, Saliwanchik lawyers are often the first to hear their ideas, in sharp contrast to the past, when the first people with whom scientists shared their findings were usually other scientists. Previously, researchers were more likely to publish than patent their discoveries. But because of a steep decline in university and government funding for research, they face intensified pressure to support their work with commercial revenues. In addition, universities and federally funded researchers now are allowed to retain ownership rights in their patents. Thus, scientists can no longer afford to be so collegial. Besides their scientific patent work, IP lawyers are busy battling Internet domain pirates and cybersquatters, securing patents for electronic business methods, and enforcing noncompete and trade-secret agreements, says Jose I. Rojas, a Holland & Knight partner who heads the firm’s Miami electronic business practice group. Keith E. Rounsaville, a partner in antitrust and IP at Stearns Weaver, says companies like Coca-Cola and Nintendo are keeping his firm busy protecting their brands, copyrights and trademarks around the world. Success has bred one big problem for IP-oriented firms: Their associates are constantly being courted by headhunters. That’s because the supply of qualified IP attorneys falls far short of demand. The shortage is expected to continue for years to come. Very few lawyers hold an undergraduate degree in engineering or science, which is a virtual necessity for patent work. And it isn’t easy for Florida firms to compete with law firms in IP meccas like San Francisco and Boston on salary and glamor. Greg Nelson, a partner at the 10-lawyer Akerman Senterfitt IP outpost in West Palm Beach, Fla. — whose attorneys recently were hired away from Quarles & Brady — says that to match salary bids from out-of-state firms, he typically has to offer IP lawyers 10 percent more than lawyers in other practice areas. With so many businesses being bought, sold, merged and capitalized, attorneys who do business transactions and securities work are the stars of the balance sheet at the state’s largest corporate law firms. Deal-making lawyers are the hottest tickets for recruiters, says Jhan Lennon, head of attorney placement at Auslin Legal Staffing in West Palm Beach. “We have to stretch to service the demands of our existing clients and people who want to be our clients,” says Gary Epstein, the Miami-based chair of Greenberg Traurig’s 200-lawyer national corporate and securities practice group. Mergers and acquisitions, he notes, recently have replaced initial public offerings as the leading source of business, particularly from clients looking to expand their operations in Latin America. In Florida alone, Epstein has 40 lawyers in his practice group and says he could easily keep 10 others busy. He’d love to hire more mid- to senior-level associates, but experienced corporate lawyers are in short supply everywhere. Joe Ankus, a Fort Lauderdale-based legal recruiter, says corporate, securities, and transactional lawyers are golden. “If you have good talent that is underpaid, you can’t keep them,” he warns. But it’s not just law firms which are competing for corporate lawyers. Florida businesses are expanding their in-house legal departments, and that has driven up salary demands. An associate general counsel earning $75,000 to $80,000 two years ago is getting $90,000 to $100,000 today, Ankus says. For attorneys with good international contacts — and preferably fluency in at least one foreign language — there is a lot of work representing foreign companies looking to do business in the United States, and U.S. companies looking to expand abroad. The increasing number of mergers between companies in different countries has been a big factor in boosting demand. Among the busiest international lawyers are those with technology and telecommunications clients in Latin America, says Thomas Raleigh III, immediate past chair of the Florida Bar’s international law section and a partner with Akerman Senterfitt in Orlando, Fla. Most of Raleigh’s practice is helping European individuals and corporations establish U.S. business ties. He got his start working in a Paris law firm after law school, and he speaks fluent French. But the best preparation for international practice, he says, is varied litigation experience. Having good contacts in South America also helps. Though membership in his Bar section has remained relatively flat, at about 850 lawyers, Raleigh says that doesn’t accurately reflect the number of Florida lawyers practicing some type of corporate law with international clients. These include lawyers working with foreign clients on taxes, real estate, estate planning and electronic commerce. Prompted by law firms around the state, Florida law schools are trying to help meet the demand for international and IP lawyers. The University of Florida law school introduced a certificate program in intellectual property this year and plans to launch a certificate program in international practice next year. Stetson University’s law school recently added a master’s program in international law. One might think that the 1990s’ economic boom would have made both employers and employees happy. Instead, in many cases, it has exacerbated tensions between them. Bill Amlong, of Fort Lauderdale, Fla.’s Amlong & Amlong, says the decade fostered a get-rich-quick attitude, which resulted in meaner workplaces. “If you have a bottom-line mentality, mistreating your employees can be good for business,” he says. Such mistreatment, combined with employees’ increasing sophistication about their rights, has led to a flood of new sex, age and race discrimination complaints, Amlong says. His four-lawyer firm gets an average of 50 calls a day from potential plaintiffs, a growing number of whom are highly paid professionals. Kent Spriggs, a partner with the four-lawyer firm Spriggs & Davis in Tallahassee, Fla., says membership in the Florida chapter of the National Employment Lawyers Association has doubled in the past two years, to about 170 lawyers. Spriggs concentrates on class-action job discrimination suits. Practicing in this area requires knowledge and skill in both litigation and administrative law, since plaintiffs in job bias cases must file complaints with the U.S. Equal Employment Opportunity Commission or the state before they can sue. Spriggs says he’s surprised that workplace discrimination is still so common. “We underestimated how much commitment there is on the part of many in government and corporate America to keeping blacks and women back,” he says. But labor and employment defense lawyer Susan Potter Norton, a partner at the 28-lawyer Coral Gables, Fla., law firm Allen Norton & Blue, has a different explanation for the rise in job bias suits. She says she believes employees feel freer to file complaints because unemployment is at a record low and they know they can always find another job. Employees also are more willing to unionize, which has expanded the business of representing companies facing union activity. Norton’s firm has handled 30 union-related matters in the past year, compared with 10 to 15 in previous years. In addition, a growing number of businesses require workers to sign employment agreements, including noncompete provisions, says Walter E. Aye, a Tampa, Fla., sole practitioner in employment law. More lawyers are needed to draft such agreements. “You’re seeing them in smaller businesses, and even in sales,” marvels Aye, who doesn’t necessarily approve of the trend. And with new employee rights in areas like disability accommodations and family leave, demand for employment lawyers is only going to increase, Aye says. To help meet the burgeoning demand, he heads up a summer program at Stetson University College of Law in St. Petersburg, Fla., to train mid-career lawyers in employment law. A bulging population and a dwindling water supply have left the Tampa Bay area under mounting pressure to reduce water use. Joseph Edwards, managing partner of Tampa’s Annis Mitchell Cockey Edwards & Roehn, saw gold in this looming crisis. This year he hired water policy expert Jim Garner away from another law firm to head up a new water practice group. Garner long ago spotted water law as a blue-skies niche and developed expertise and visibility through service on goverment water boards. “It became apparent to me that water was going to be an extremely volatile area,” he says. Garner’s current clients include large agricultural water users, such as U.S. Sugar Corp. He also represents clients who want to build reservoirs and desalination plants. Garner argues that private water management could help solve the state’s shortages. He’s currently trying to persuade lawmakers to allow private companies to buy and sell water permits. The political debates on this issue are likely to be fierce all over the state of Florida, he says, and lawyers who know the subject and the key players will be much in demand. Over the past 10 years, insurance companies have tightened the screws on legal costs. And fewer insurance cases are going to trial. A growing number are being resolved in court-ordered or contractually mandated mediation. As a result, some insurance defense litigators have shifted into mediation. The lure is obvious. Mediators can bill at least $150 an hour, and costs are much lower than in litigation. Jim Murman, a partner at Tampa’s Barr Murman & Tonelli, spotted this opportunity early. In 1992, when Florida began requiring most complaints to go through mediation first, he established a mediation practice alongside his defense litigation practice. “I don’t want to say that we were clairvoyant,” Murman says, but his firm’s success suggests that he was. In the last five years, Barr Murman has grown from six to 19 lawyers. Mediation accounts for about 15 percent of revenues. He knows at least six other insurance defense lawyers who since have shifted to mediation. That’s a national trend. More than 400 lawyers — a record number — attended last year’s American Bar Association’s alternative dispute resolution institute. Cary R. Singletary, a Tampa attorney who left employment law and set up his own mediation practice in 1989, says his mediation caseload has doubled in the past 10 years. Singletary, the director of the dispute resolution center at Stetson’s law school, currently schedules 40 to 50 mediations a month, and has to turn away an equal number. In contrast, his colleagues who defend insurers in litigation have seen their practices shrivel from an average of 10 trials a year to just two or three every two years, he says. Surprisingly, there aren’t a lot of qualified competitors yet, says Charles H. Damsel Jr. of West Palm Beach, a former insurace defense litigator who now does mediation. The Florida Supreme Court, however, is training and certifying more attorneys in mediation. Of course, no one can safely predict the next big thing. But consultant Bill Cobb warns law firms not to get blinded by the fool’s gold of adding a practice area just because it looks shiny. “If you don’t already have a credible position with a client that needs those services,” he says, “what’s hot and what’s not will not help you.” Stephen Van Drake of The Miami Daily Business Review and David Corder provided reporting assistance for this article.