Five attorneys — three of them partners — have left Blue Bell, Pa.-based insurance law firm Nelson Levine de Luca & Hamilton to form their own insurance and liability defense boutique.

On Monday, former Nelson Levine partners William F. Stewart, Cynthia L. Bernstiel and Cathleen Kelly Rebar opened Stewart Bernstiel Rebar, with offices in Blue Bell, Princeton, N.J., and New York City.

The move comes less than four months after Robert T. Horst, a founding partner of Nelson Levine, left the firm to join Bucks County-based Curtin & Heefner.

Stewart focuses his practice on complex insurance coverage litigation related to everything from climate change to hydrofracturing.

Bernstiel’s practice centers on arson and fraud investigation and litigation, and Rebar focuses on claims related to professional liability, products liability, toxic torts, premises liability, security, health care and employment.

Joining them are former Nelson Levine associates Patrick Duffy and Danielle Sivert, as well as former solo attorney George McClellan, who will manage the Princeton office.

Speaking to The Legal on Monday, Stewart said that in an economic climate in which clients are demanding more cost-effectiveness from their attorneys, he and his colleagues view the new firm as an opportunity to “reassess overhead.”

The goal, Stewart said, is to “have a lean but effective overhead structure” that allows the firm to save money and to pass those savings along to clients, while continuing to offer a broad range of insurance and defense services.

“We’re in a situation now where times are tough all over and our clients are going through a difficult period where they’re trying to reduce costs,” he said.

Still, the fact that clients may currently be in the throes of lean economic times does not mean insurance and liability defense work isn’t robust, the trio said.

Bernstiel, for example, noted that the recession and subsequent lackluster economy has actually caused an uptick in her work.

“As an arson and fraud specialist, the downturn has resulted in my business booming because people are in desperate times and facing foreclosure and mounting credit card debts,” she said. “As a result, my insurance claims seem to be on the rise.”

Both Bernstiel and Rebar said Monday that the new firm will focus not just on cost reduction, but on quality legal counseling as well.

Rebar said Stewart Bernstiel represents an attempt at “getting back to lawyering.”

“Clients are demanding value instead of just discounts,” she said, adding, “Clients want their goals met and their goals aren’t being met [at other firms]. We’re going back to the basics of lawyering.”

Stewart described client response to the new firm as “tremendous — really beyond our expectations.”

Nelson Levine Chairman Michael R. Nelson said he felt the group’s departure was a “healthy thing” for his firm.

“We are focusing on this concept of insurance expertise,” he said, describing the firm’s strategy. “Some of the work that the departing group wanted to do was some of the lower-rate, commodity, non-expert-driven work and I’m sorry but we can’t do that kind of work.”

Nelson said traditional insurance defense firms are “struggling” because insurance companies are increasingly assigning that type of work to their in-house legal departments, which are not profit-driven and are designed to operate at a much lower cost than outside counsel.

“When you’re doing commodity work and doing work on volume, your competition is really the insurance companies themselves,” he said.

Bernstiel, meanwhile, said that while Stewart Bernstiel “will continue to do high-end specialty insurance work, our new overhead structure will permit us to meet rate expectations of our clients in the changing marketplace.”

Nelson said his firm, which has about 60 lawyers, has “an aggressive growth plan.”

In March, just before Horst left, Nelson Levine announced it had hired an insurance brokerage executive as its first vice president of business development.

Stanley Jablonowski joined Nelson Levine’s New York office from Langhorne, Pa.-based insurance and financial company Selling Technologies Inc., of which he was chief executive officer.

That news came on the heels of the firm’s announcement that it had opened a Washington, D.C., office in March with a focus on the federal government’s regulation of the insurance industry.

In addition to its Blue Bell and Washington locations, Nelson Levine has offices in London, New York City, Columbus, Ohio, and Cherry Hill, N.J.

As Nelson Levine expanded, Horst’s departure earlier this year appeared to be the product of a desire to keep his practice more local.

Bonnie S. Stein, co-chair of Curtin & Heefner’s litigation section, told The Legal at the time that rate pressure had driven Horst to seek a smaller, more regional practice.

“We offer something Bob wanted, which is a smaller practice, a county lifestyle [and] the ability to be a bigger player in a smaller legal community,” Stein said at the time.

But Stewart said Monday that neither he nor his colleagues with whom he formed Stewart Bernstiel had any problem with Nelson Levine’s geographic reach, noting that his own practice stretches around the country.

“I have a fairly national practice,” he said. “I do national counsel for at least one major insurance company on climate change matters, which takes me all around the country. We do have a national footprint, but we also do regional work.”

In fact, like Nelson Levine, Stewart Bernstiel has its eye on growth, hoping to swell to nine or 10 lawyers by the end of August, Stewart said.

Zack Needles can be contacted at 215-557-2493 or Follow him on Twitter @ZNeedlesTLI. •