Morgan Lewis Partner Leaving to Head Up China Venture

Robert Lane, who helped build Morgan Lewis & Bockius' real estate department into a powerhouse group, is leaving the firm to start a joint venture with a former Philadelphia mayoral candidate that aims to develop public works and real estate projects in China. Saying that he's looking for fresh challenges beyond a law practice, Lane expressed excitement about working on projects in China, with its rapid economic expansion. As Lane put it, China is growing the equivalent of "a new Houston every month."

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Robert Lane, who helped build Morgan Lewis & Bockius’ real estate department into a powerhouse group, is leaving the firm to start a joint venture with former Philadelphia mayoral candidate Sam Katz aimed at developing public works and real estate projects in China. The move was a surprise to at least some in the Philadelphia legal community given Lane’s big book of business — and his high visibility in a number of civic groups, including the Philadelphia Bar Association and the Philadelphia Bar Foundation. Lane’s last day will be today, after which his focus will be on the company he’s starting with Katz, China Infrastructure Investment Partners. Lane said they have a tentative agreement with the Fujian Province to build a light railroad system — which he compared to Philadelphia’s El and Broad Street lines — in the capital of Fuzhou and develop the real estate along the proposed line. Lane estimated the worth of the first part of the project at $1.5 billion. The move, he said, was something that was in the works for a bit, even if he didn’t have an exact idea on what he was going to do. He said when he left Pepper Hamilton in 1998 to join Morgan Lewis, his goal was to spend the first few years building the practice and then growing it, before looking for an entrepreneurial opportunity. Lane had been head of Morgan Lewis’ real estate group until 2004, when he was succeeded by Eric Stern, who had come from Pepper as well. “I’m a builder, not a manager,” he said, adding that he was ripe for a change when Katz approached him in June. “He said: ‘Bob, I know you’re ready for this,’” Lane said. So how did two Philadelphia guys get hooked up to public projects in China? According to Lane, the genesis for the venture occured when people in Chinatown with close ties to Katz approached him about the need in China for western entrepreneurs to help develop the country, specifically in the Fujian Province. After traveling to China, the two realized they had a huge opportunity. Lane stressed that the change had nothing to do with Morgan Lewis, saying that there wasn’t any other firm he’d rather work for, but that he was looking for something beyond the practice of law. “I’m something of a challenge junkie,” Lane said. Lane said he was excited about the prospect of working on development projects in China, citing the country’s rapid economic expansion as it transforms from an agrarian society into an industrialized one. “Every Fortune 500 company has a factory over there or gets its goods manufactured over there,” he said. “They’re opening factories over there faster than we’re opening Starbucks.” While America has nine cities with populations of 1 million or greater, he said, China has 150 cities of that size or greater. Lane said China is growing the equivalent of “a new Houston every month.” For instance, Fuzhou, which rests along the southeastern coast of China, has a population of 1.43 million, with 5.7 million in its metropolitan area. With the economy expanding so quickly, he said, there’s a huge need, particularly in China’s cities, to grow its infrastructure. But while the county has an abundance of both skilled and unskilled labor, as well as highly educated and skilled technicians, Lane said the country lacks entrepreneurs. “They don’t have the entrepreneurs who can manage these projects,” he said. Which is where he and Katz come in. Lane said a key part of the deal he and Katz have set up includes not only developing the infrastructure, but the real estate as well. As the railroad is built, the value of the real estate along it will grow in value. He estimated that it would take between 18 and 24 months before the project gets started. First, it will take roughly a year to develop the plan and submit it to China’s central government, and then it will take six months to a year to get government approval. “Once we close, we will get substantial fees out of the $1.5 billion,” he said. But for now there will be other projects, plus the capitalization of China Infrastructure Investment Partners, which Lane said he hopes to do in the next three months. “It’s a big risk, but the rewards are humongous,” he said. “It’s a chance to really have a legacy.” Howard Meyers, managing partner of Morgan Lewis’ Philadelphia office, said he wasn’t totally surprised by the move. “I think we understood it was in the works for a while that Bob wanted to do something outside the practice of law,” he said. Meyers added that he thought the Katz-Lane pairing was a good fit, meshing Katz’s development skills with Lane’s real estate expertise. He said the firm was grateful for Lane’s work on building its real estate practice, but that it wouldn’t have a negative impact. “He’s leaving the practice in good hands,” Meyers said. “We don’t expect an adverse effect.” While his colleagues might not have been surprised, at least some in the community were caught off guard. “Wow,” was the immediate reaction from headhunter Liz Shapiro, president of Liz Shapiro Legal Search. “I am surprised, and then again, I’m not surprised,” she said. “He really built a huge practice there. I thought he’d retire from Morgan.” But she added that the new venture sounded like a good opportunity for Lane. “I have a tremendous amount of respect for Sam Katz,” she said. “He made me a Republican for two days.” When asked to estimate Lane’s book of business, Shapiro said it was in the “high seven figures” if not more. Frank D’Amore of Attorney Career Catalysts said while Lane’s departure would be a loss, it would not have the kind of impact on Morgan Lewis that it would have on a small or medium-size firm. “Morgan is pretty deep in that practice,” he said. “I don’t think this move is going to be cataclysmic.”

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