Editor’s Note: This article was updated Tuesday with comments from Venable’s chairman.
Until recently, Am Law 100 firm Sheppard, Mullin, Richter & Hampton, based in Los Angeles, only had one real estate partner in New York, the U.S. epicenter of big-money property and finance deals.
For firms based out-of-state, quickly growing in the practice is difficult. Groups of profitable real estate attorneys are hard to transfer. But this month, Sheppard Mullin scored a key lateral group, when it landed seven real estate transactional attorneys from Venable.
The incoming group is led by partner Peter Koffler, formerly chair of Venable’s New York real estate practice and vice chair of the firm’s national practice in real estate. The group also includes partner Brian Gurtman and Ross Honig, special counsel Julia Geykhman, Robert Gorzelany and Lee Weiss and associate Jared Wachtler.
With the move, Koffler, 56, now leads Sheppard Mullin’s New York real estate, land use and environmental practice group.
The attorneys focus on real estate transactions, including acquisitions, sales, leasing, sale and leaseback transactions, construction/development and financings. Clients include commercial developers, owners, and operators and companies with significant real estate holdings, such as insurance companies, banks, mining companies and pension funds.
According to news reports, Koffler’s recent deal experience includes representing the seller in the $55 million sale of Hotel Elysee to the hotel’s subtenants and representing EmblemHealth in its $330 million sale of its Manhattan property on Ninth Avenue.
Koffler, who worked with a recruiter for the move, said his clients are joining him at Sheppard Mullin.
“There was nothing bad about Venable,” Koffler said, but Sheppard Mullin “is a platform that is going to be more supportive of us, and it’s going to help us grow our practice beyond what we could have grown at Venable.”
“The firm is very committed to helping us build our practice,” Koffler said, and Sheppard “provides greater resources to attract and maintain talent.”
Among the differences between the two firms, Venable has eight offices, all inside the U.S., while Sheppard Mullin has 16 offices in North America, Europe and Asia. Meanwhile, Venable reportedly has a different associate bonus structure compared with other firms.
Sheppard Mullin’s average profits per equity partner was $1.71 million in 2017, compared with Venable’s average at $1.13 million, according to The American Lawyer.
In a statement to ALM on Tuesday, Venable chairman Stuart Ingis said, “We’re every bit as competitive as other Am Law firms in how we pay our partners and associates, including bonuses. We have a very well established New York and national real estate practice, which will continue, even with them gone.” He added, “Sheppard Mullin appears willing to pay a premium beyond the market in order to get into a new area – [New York] real estate – where they don’t have a practice.”
Koffler, in response Tuesday, said, “The financial terms of our arrangements are confidential.”
The real estate group’s departure comes just two months after Venable announced it was absorbing intellectual property boutique Fitzpatrick, Cella, Harper & Scinto, effective Nov. 1. The merged firm will have about 800 total attorneys
Koffler said the combination was not a factor in his decision to move.
The group hire instantly provides the Los Angeles-based firm real estate credentials in New York and puts it over 100 attorneys in Manhattan.
“This turnkey group brings outstanding East Coast real estate credentials to our firm,” real estate practice group leader Nancy Scull, based in San Diego, said in a statement.
Now Sheppard Mullin “is on the map” for such practices, Koffler said. “We both have a lot to offer each other,” he said. “This is a starting point, with the goal of becoming one of New York’s pre-eminent real estate groups.”