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In the fast-growing, highly lucrative arena of real estate investment trusts, competition among law firms for established REIT practices is cutthroat — and turnabout is fair play. Six weeks after its REIT practice was decimated by the departure of a 10-lawyer team from its Raleigh office, Alston & Bird early this month attempted to raid seven REIT practitioners from Morris, Manning & Martin. The firm netted Rosemarie A. Thurston to lead its real estate securities practice, and associate Hugh S. O’Beirne. The intervening action may require a scorecard to figure out. Alston initially picked up two new REIT partners, Thurston and Lauren B. Prevost, and two of their five associates, O’Beirne and James H. Sinnott. Morris Manning then won Prevost back over the weekend, potentially preventing the loss of the rest of the team. And after a week at Alston, Sinnott accepted a third offer, to be of counsel at the local office of Lord, Bissell & Brook. “In any red-hot practice area this kind of thing happens. We just haven’t seen too many red-hot practice areas in the last few years,” said Sinnott, who spent the week of June 3-10 hopping from firm to firm to firm. “It was a fun week in a very, very stressful Tums-related sort of way,” he added. REITs — and the lawyers who understand them — are hot commodities because investors who are unsure of the stock market want to put their money in harder assets such as real estate, said Thurston. “Real estate is a nice, tangible asset — as opposed to technology — and a REIT is a way to securitize that asset,” she explained. The return on real estate securities has far outpaced the stock market in the last several years, Thurston said, and REITs also provide investors tax advantages and a steady annual payout because the trusts must disburse a percentage of any income. REIT WRANGLING Alston’s REIT wrangling started in April, when the head of the firm’s REIT practice, Brad S. Markoff, decamped with nine other lawyers to open the Raleigh office of DLA Piper Rudnick Gray Cary. Markoff said then that his new firm, with 200 real estate lawyers in the United States and another 250 around the world, offered him a bigger platform. Then on the morning of Friday, June 3, Thurston and Prevost, two key partners in Morris Manning’s real estate capital markets group, resigned to go to Alston. In the afternoon, they sought to take the rest of their team with them, and Alston made offers to each member. But over the weekend, Morris Manning counteroffered and persuaded Prevost to come back. “We talked to Lauren over the weekend, and she decided to stay with us. Only one associate decided to go,” said Robert E. Saudek, Morris Manning’s managing partner. Prevost said that after she had the opportunity to talk to Saudek and her other partners, she decided to stay with Morris Manning, where she has practiced since 1996. Sinnott, the senior associate in the group, said the period around Thurston and Prevost’s resignations was one of the most high-drama of his career. The week started with a call from a client asking him to go in-house. Next, a former Morris Manning colleague at Lord Bissell asked him to join that firm’s emerging insurance capital markets practice. And then, on Friday, Thurston and Prevost announced the move to Alston and asked him to join them, along with the other four associates. Sinnott, a securities lawyer, signed on with Alston on Friday afternoon as of counsel. “Seeing that my practice was going to Alston & Bird, the best thing for me was to stick with the practice,” he said. But the following week, now at Alston, he had second thoughts. Lord Bissell wanted him to transfer his expertise securitizing real estate to the insurance sector. Like REITs, creating secondary markets for insurance policies is becoming the next new thing in capital markets and is “the darling of Wall Street,” he explained. The Lord Bissell offer was a chance for Sinnott, who had been an eighth-year associate at Morris Manning, to get in on the ground floor and build client relationships, he said. At the end of that week, on June 10, he joined Lord Bissell as of counsel. At that point, Alston announced that it had recruited Thurston and O’Beirne from Morris Manning. “We were prepared to take a larger team than came,” acknowledged Ben F. Johnson III, Alston’s managing partner. Johnson said the Morris Manning raid was not prompted by the loss of Markoff’s REIT team, explaining that Alston’s real estate capital markets practice is rapidly expanding and wanted to broaden its REIT team beyond Markoff’s Raleigh base. “We were very interested in Rosemarie Thurston before Brad Markoff ever left,” Johnson added, saying that several of the firm’s REIT clients were “very vocal advocates” for Thurston and suggested that the firm make a play for her. “The departure of Brad Markoff did not end or even seriously cripple our REIT practice,” Johnson emphasized. He said the firm has 20 to 25 securities, tax and real estate lawyers involved in real estate capital markets, including several who do REIT work. “Rosemarie had a growing practice. She had a very solid reputation among some � Alston & Bird clients, and so we established contact with her,” Johnson said. STARTED IN SECURITIES Thurston started her career as a securities lawyer. Morris Manning recruited her from Holland & Knight in 1997 to service its tech clients, but in 2002, after the bottom fell out of the tech market, she turned to real estate capital markets, as did several other partners at the firm. The sector draws on a mix of legal disciplines, including securities, real estate, corporate and tax. “Tech was cooling off and Morris Manning had lots of securities lawyers and a big real estate group, so it was a natural marriage of the two practice groups,” Thurston explained. She drew on her experience in the ’90s doing real estate securities work for Norcross-based Wells Real Estate Funds while at Branch, Pike, Ganz & O’Callahan (which later merged into Holland & Knight). Thurston marketed herself to real estate companies and has developed a national practice, she said. Since shifting to REIT work in 2002, she has served as issuer’s counsel for more than $4 billion in real estate securities offerings. Thurston said she moved to Alston for a larger platform, citing its expertise in tax and regulatory matters, including a Washington office, which will help her develop her practice as the deals grow larger and more complex. She said it was too soon to say what clients she’s bringing to Alston. “I fully expect many to make the move,” she said. Johnson also said he expects that Thurston will bring “substantial amounts of business,” but he declined to name clients. At Morris Manning, Saudek said that, so far, “all of the clients of the group have stayed with the firm, notwithstanding the departures.” Saudek said that his firm’s real estate capital markets group remains one of the largest in the Southeast. The group had about 10 to 15 practitioners before the departure of Thurston, O’Beirne and Sinnott and is hiring reinforcements. It has just added a midlevel associate, Joanne Abrams, from Goodwin Proctor in Boston, and a first-year associate, Walter Devins, to do REIT work. Prevost said four partners at Morris Manning, including herself, focus on real estate capital markets clients.

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