When Fragomen, Del Rey, Bernsen & Loewy—like many firms—was left scrambling for alternate office space after Hurricane Sandy forced the closure of its downtown Manhattan headquarters, the immigration-focused firm took refuge in the onetime home of bankrupt law firm Dewey & LeBoeuf.
Seeking a place to house a New York operation that numbers 80 lawyers and 350 total employees until its 7 Hanover Square office reopens, Fragomen management on Nov. 5 inspected the 10th floor of the former Dewey space at 1301 Avenue of the Americas and relocated there by Nov. 9.
According to Michael Patrick, a Fragomen partner and executive committee member, the firm considered four locations before deciding to commit to the former Dewey space. To help move negotiations along and finalize the short-term lease before another displaced business swept in, “we played the crisis card,” Patrick said.
“The coffee was still warm,” he added, describing how quickly the firm settled into the space, which Dewey occupied until filing for bankruptcy in May and which some of its employees continued to inhabit until Nov. 2 while helping to wind down the defunct firm’s operations. Other floors of Dewey’s former space will soon serve as Chadbourne & Parke’s New York home.
Patrick said Fragomen has committed to pay the building’s landlord, Commerzbank, at least 60 days rent. While the firm has the option to stay in the space—still outfitted with some of Dewey’s furniture and fixtures—until the end of April, he said, “we’ve got every confidence we’ll be back [downtown] before then.”
The temporary quarters are half the size of the Hanover Square space (62,000 square feet compared to 117,000). For now, people are sharing offices and finding other ways to squeeze into the more modest accommodations. Phones and computers—some leased, some purchased—arrived Nov. 14, Patrick said, and Fragomen’s normal phone numbers have begun routing to the new office (Voicemail, however, won’t be active for another week, leaving secretaries busier than usual taking messages.)
Though electronic files were available throughout the storm and its aftermath thanks to a recent transition to a cloud-based server, Patrick said retrieving documents from the shuttered downtown office was impossible until Nov. 9.
The building’s landlord had maintained that entering the property for even a brief period represented a safety hazard. After some “huffing and puffing,” Patrick said, the landlord relented.
“We needed to pick up passports, we needed to get papers for our clients,” he said.
Because of a rate abatement clause in the firm’s lease, Patrick said Fragomen doesn’t have to pay rent at 7 Hanover while the building is closed. Coupled with recoveries expected from business disruption insurance, he said, the entire ordeal shouldn’t cost much more than lost sleep.
So far, Patrick adds, the tighter squeeze hasn’t caused many problems: “Out of 350, I’ve only had one person come to me who said, ‘I don’t think I have enough space to work.’ All I could do is smile. I said, ‘I’m sure you can manage it.’”
Many Firms Affected
The storm affected many firms with offices in lower Manhattan. Like Fragomen, some are still making do in temporary space. Stroock & Stroock & Lavan signed a short-term sublease to take over an unused portion of Kirkland & Ellis’ midtown offices until its own office at 180 Maiden Lane reopens, Crain’s New York Business reported last week.
Hurricane Sandy forced Fragomen, Del Rey, Bernstein & Loewy to vacate its permanent downtown quarters at 7 Hanover Sq.
Fried, Frank, Harris, Shriver & Jacobson, whose headquarters is located at One New York Plaza, at the very tip of lower Manhattan, expects to be back in the building “in the near future,” a spokeswoman said via email. In the meantime, they’ve taken temporary space on Park Avenue.
Cahill Gordon & Reindel, at 80 Pine St., has had lawyers working remotely and from midtown space it rents at 1271 Avenue of the Americas, according to a note on its website.
Reuters reported that the downtown office of Gordon & Rees at 90 Broad St. also remained closed this week. New York managing partner Mercedes Colwin, who said the firm could be back in its space as soon as Nov. 30, noted that the storm surge was so strong in the building’s vicinity that it caused the drowning death of a homeless man in the lobby.
On Nov. 12, Sullivan & Cromwell returned to its main office at 125 Broad St., a building in which the firm owns a 60 percent stake. Managing partner Joseph Shenker sent a mass email about the opening, crediting “the extraordinary efforts of our dedicated lawyers and administrative staff worldwide,” and noting that even in the absence of a functioning office, the firm closed deals and elected new partners.
Five-lawyer firm Schwartz Goldstone & Campisi moved to 688 W. 22nd St. when its 20-person staff was forced out of 90 Broad St., said firm managing partner Joseph Campisi. The firm’s offices won’t be available until at least early or mid-December, he said.
“It is an incredibly difficult challenge because setting up an office is already a time-consuming practice,” he said, and to do it unexpectedly is “incredibly frustrating.”
The change involved forwarding phones, moving computers out of 90 Broad St., setting up desks and fax systems, and getting office supplies, he said. Fortunately, he said, the firm can access documents from its computer system.
The disruption, he said, is a “tremendous expense,” likely costing the personal injury and litigation firm at least $50,000. It also had to pay employees for two weeks when the firm was closed and technology servers were down, he said.
The 12 lawyers at Rick, Steiner, Fell & Benowitz, another tenant at 90 Broad St., are now spread out at other law firms or at client’s offices, said partner Robert Benowitz.
After the storm, the landlord told the firm’s lawyers they would have 20 minutes to “get our essentials,” Benowitz said. Staff walked up 25 flights with flashlights and walked back down with loaded suitcases and hard drives.
Benowitz said he was temporarily working from a client’s office in midtown while others are sharing space with a firm in Long Island and another group found business space in Brooklyn.
“It’s all good will,” he said. “It’s just remarkable how nice people have been.”
Still, the storm “has been tremendously disruptive,” Benowitz said. The firm had to put off deal closings. “People couldn’t get to closings,” he said. “We lost cash flow from deals that would have closed the week of the hurricane.”
The firm bought new laptops and expects to pay some transportation costs for staff.
Rick Steiner has liability insurance and is looking into what’s covered, Benowitz said, adding that it’s always a concern whether there are exclusions in policies.
“When your landlord tells you, you have 20 minutes to take your essentials, two things I thought of were a copy of the lease” and a copy of the firm’s liability policy, he said.
Benowitz said he hasn’t submitted a claim yet, but his “understanding is that because of the magnitude of the claims, that there’s going to be a substantial amount of litigation on coverage questions going forward.”
The New York County Lawyers’ Association has heard from more than 20 lawyers or law firms seeking temporary space, ranging from solos to firms with staffs close to 30, said executive director Sophia Gianacoplos.
NYCLA is trying to match displaced lawyers with law firms that have extra space. Several firms have offered to help, she said.
NYCLA is also offering its own conference rooms, library space and computers to displaced members. More than 50 have taken the association up on its offer, she said.
@|Sara Randazzo, a reporter for The Am Law Daily, an affiliate, can be contacted at email@example.com. The Law Journal’s Christine Simmons contributed to this report.