Why is BigLaw Shrinking?

This has been one of the top stories at the New York Times website for a few days now. I can give you my opinions, which you can also call a condensed version of the story.

Not enough transactional work to keep people busy.

Ebb and flow. This happened in the 90s, too, people. Granted these layoffs are bigger, but that's because BigLaw is bigger.

Salaries got out of control. I was a beneficiary of this, admittedly. Firms are rolling back these increases a bit and I htink that is a good thing for them. (Don't even get me started about how I think we should close about 2/3 of our law schools.)

To pay for everything, billable rates have become insane. Work that is not "bet the company" work going to people like me. Would you rather pay BigLaw rates for a routine deal or pay me a fraction of that for the same work? (I am busy enough to tell you what I think clients are saying.)

In some cases, greed. Per partner profits have become -- for better or worse -- the measurement of success. Just as pro athletes move from team to team, so do lawyers with books of business.

Unlike some, I do not think BigLaw is done and history. There will always, in my opinion, be a place for that kind of model. If you need the best of the best on a deal, then get it - and many times that means going to the biggest players in the biz. Also, if you are a GC at a company, boards are not likely to fire you because you hired BigLaw in the major deal or major litigation. But I think there is a trend toward finding guys like me to handle other matters in a cost-effective and efficient manner while getting first-rate service. So there's room for all.

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Tuesday Tidbits - April 7, 2009

There's a lot going on both in dirt and in my profession. Here's a quick summary of what I have been thinking about and reading:

In the "It's about time" department: many law firms are cutting way back on summer associates, retooling the programs from cocktail parties to work and even reevaluating the necessity of them altogether. I actually worked hard as a summer associate, but I wonder aloud whether we should to to an articling/apprenticeship system (a la medical residency) where law grads are low-paid interns at firms for a year before taking the bar -- and if they cannot find an articling position then they cannot take the bar. I always felt the second year law student thing was not a great way of evaluating talent.

WTF is going on with GGP stock? Up big yesterday, up again so far today...and the company is acting like Sergeant Schultz.

Some harsh but perhaps accurate advice for laid off associates who are not networking and developing business: get out of the profession. You don't belong.

I mean, lets be real here. Most of you never wanted to be lawyers. You wanted the trappings of what L.A. Law made you believe the practice was all about.

So get out.

Don't go into foreclosure defense, that'll be dead in two years. If you have no established practice in an essential area of law, get out. It's not going to get better in the next 5-10 years. If your goal is money, go make money. Buy a franchise, open a business. You went into law to make money, the money is not there, get out.

What is so wrong with realizing that you never really wanted to be a "lawyer?

What are the world's safest banks? Mostly not here. And "Bank of America is notably absent from the list."

No shock, but nontheless shocking: S&P is about to downgrade a boatload of CMBS. This is a very ugly quote: “We concluded that the ratings on a significant portion of our CMBS portfolio may no longer be appropriate, given our view of the increase in credit risk.”

That's enough for one morning. Enjoy!

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Virtual Law Partners

I still like this idea, that of good lawyers practicing largely without offices, staff and associates and keeping what they earn. It is largely what I do now, albeit without partners anymore. But Virtual Law Partners has the kind of business model I like. And it is one I might consider down the road myself if they'll have me. (The story also has a bit to say about layoffs, outsourcing and other factors causing turmoil in the legal market.)

The WaPo headline notwithstanding, I don't think it is entirely accurate to say that the recession is driving lawyers into this kind of practice. Yes, it allows people like me to cut rates and yet keep more money because of low overhead. In part, yes, it is a function of good lawyers being "fed up with the traditional business model that required it to annually increase rates and billable hours to finance ballooning profits and overhead." Billing rates at many firms are simply out of control. Call it Wal-Mart discounting if you want, but for much of the work I do you should not be paying bet the company billing rates.

But there's also a quality of life factor to consider:

Besides saving money for clients, Willard said the firm is good for his home life, too. At his previous firm, he said, he worked 60 to 85 hours a week to keep up his billable time. Now he works 40 to 50 hours and has more time with his wife and two young daughters.

He said he has the ability under the new arrangement to work less and make more money. Because overhead is so low, he keeps 85 percent of what he generates, he said, instead of 30 percent.

"I can go to my daughters' piano lessons and tae kwon do practices," said Willard, who kept 90 percent of his clients from his previous firm. "I have clawed back a significant part of my life."

Bingo. Thanks to technology, you'll never know from where in the world I am working unless I tell you. Much as I enjoyed my time in downtown Chicago, there are definite advantages to doing what we do. For instance, I am having a very busy day today. But when I take breaks, instead of eating I will hit the weight machines next to my home office, or maybe the elliptical. And my commute is roughly 300 feet, including one flight of stairs. In short, I have three hours more a day to do what I want rather than what I have to do.

Okay, you get the picture. Back to work.

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Post-Black Thursday thoughts

I know everyone and his or her mother has already commented on the layoffs at many firms yesterday. This is something we haven't seen since the early 90s and even then probably not on this scale. Nonetheless, to close out the week I do have a few comments on the situation. (There is also a good summary here that contains many of these ideas.)

• The layoffs had to happen not only because of a lack of work but also because of a lack of normal attrition in a down market. Of course, the fact that some law firm managers plan on and expect 25% attrition is entirely another problem.
• We've let our profession become a business driven by profit and loss. Because of the business model, some move around like nomads either because of it and/or because they know they are almost as fungible as associates. I'm not sure we can close Pandora's Box, but it is food for thought.
  
• First year associates are, by and large, overpaid and useless. I know. I used to be one. And now, of course, clients do not want first-years assigned to their matters. Can you blame them? How do you solve this problem?
• I actually like the idea of cutting salaries. But the problem is that law school has become so expensive that you will never be able to pay loans back. Making first years cheaper is the issue in my opinion.
• Medical schools have it right. There is a scarcity of them and thus a scarcity of doctors. We are cranking out too many JDs in this country, many of whom are doomed to have huge loans and no way of paying them back as lawyers. Personally, I'd reduce the number of schools drastically.
• I really, really like the idea of articling like they do in Canada. Have graduates intern (like doctors) at a law firm for a year -- working cheaply -- and learning the basics of actually being a lawyer. And this possibly solves the problem of untrained first year associates. Of course, that system is not perfect either and there have even been thoughts about getting rid of the practice in Ontario.

Anyway, I do not have all the answers. I'm not sure I have any. And I feel terrible for all the people that were let go. But maybe this is a good time to rethink business models and existing paradigms and look outside the box we have been in for so long.

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Boom time?

That is what the LA Times says it is for lawyers. And it is for some - mortgage fraud, bankruptcy and all that. And perhaps the bailout will create opportunities that lawyers will have to helo their clients wade through.

Of course, this is being written as two major California law firms (Thelen and Heller) have dissolved in the last few weeks. Don't tell all the laid off lawyers we're in a boom time. They and support staff are in many cases having a tough go of it.

Larry Bodine, citing a Hildebrand International report, agrees. The word is that 2009 will be a tough year for lawyers, not a boom time. More layoffs are expected, profits will be flat or down. And I'll bet a nickel you will see several more major firms dissolve.

There''s always opportnuity out there for a good lawyer. And sometimes a downturn in one sector of the business means an uptick in others. But I just don't see this as a boom time.

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Not a great day to be a BigLaw associate in Chicago

Above the Law is reporting that Katten Muchin Rosenman and Sonnenschein Nath & Rosenthal are letting go more staff, including associates. While these firms are national now, they are best known as Chicago law firms. This is not the first round at Sonnenschein either, if I recall correctly.

I have worked with both of these firms in the past (and interviewed many years ago at SNR). I don't know how many dirt lawyers were impacted, but both shops are well known for having first-rate real estate practices.

If you are a young lawyer reading this (and I know a good number of you do), take heed. Without portable business, you are a fungible billing unit at BigLaw. And I don't mean that as a slam on Katten or Sonnenschein, either. That's the business model of law firms in 2008. It is much more that way than it was in 1993. And at least firms are not calling these layoffs "performance-based" like they did in the early 1990s.

What is the lesson? Well, you can do a few things. One is to make sure you get that book of business. You can say "I'll go in-house," but that's not guaranteed employment either. (An in-house acquaintance of mine got whacked today.)

I'm not saying the route I took is ideal. It isn't for everyone. I'm blessed to have a two-income family where my spouse is recession-proof. But having a small stable of clients (if I can add a few more, great -- I can work harder but only if there is a fit), a good knowledge of PCs and Quickbooks, a first-rate accountant and ridiculously low overhead allow me to make a decent living. Maybe you could too. And then you are the captain of your fate.

The point I am getting at is this. There is more to life than billing 2400 hours a year. Do you know anyone who died saying, "Gee, I wish I'd worked more?" And if you are your own boss you cannot be fired, except by your clients. BigLaw can be great. I liked my time there. And even if you are there now and you hate it, think of yourself as a scholarship athlete, being paid top dollar to learn how to be a great lawyer while enhancing your firm. You can choose to try to grab that BigLaw brass ring of partnership (and what that brings; see Chicago firms de-equitizing partners, too!) or you can choose to use your knowledge to your own account, and maybe even have a little time for a life (gasp!)

All right -- I'm off the soapbox for now. Good luck to you associates looking for work. And keep the advice above in mind, even if it is only worth what you paid for it.

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DIrt Lawyers - beware of malpractice claims

The ABA released a report yesterday stating that legal malpractice claims for the period 2004-2007 are up four percentage points compared to the period 2000-2003.

I haven't read the survey, but I found this quote troublesome and perhaps just wrong:

As real estate values have fallen across the country, more individuals and businesses are suing their lawyers for bad results, according to panelists who discussed the findings of the 2004-2007 claims study during the conference’s opening plenary.

I don't get it. Of those years, only 2007 was really down. 2004 and 2005 were gangbuster crazy. And that's why I think you see the uptick in claims.

Here's the rationale. SO many deals were being done that for many it was impossible to keep up. So you cut corners. And those lawyers (and title companies) who did paid or are paying the price in litigation.

Here's more:

According to panelists, claims resulting from alleged errors in real estate transactions range from conflicts of interest, closing errors or contract drafting, to zoning or escrow issues. In many states it is not uncommon for only one lawyer to be at the closing table, presenting a huge potential for conflict of interest.

I'm guessing, based on this, that many of these claims are for residential real estate. I could be wrong. But I doubt I am. Even though I specialize in commercial real estate, I do occasional work on the residential side and certainly know the drill.

The moral for us lawyers? Don't be greedy. Take on only as much work as you can handle competently. Have good staff and check their work thoroughly. And finally, remember that it is okay to be a little paranoid, especially if it keeps you from being served with a summons.

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Drafting contingencies

A lawyer on a listserv I subscribe to asked a good question today that I had to answer: what happens if a contract contingency is not met? The buyer is refusing to close and the seller wants to take the earnest money. The answer? Of course, it depends. But you knew that.

This is where good lawyering comes in. If you are the buyer, of course you want every chance to try to have wiggle room. But if you are the seller, you want to craft any contract contingencies as tightly as you can to curtail the buyer's ability to walk. Notices, efforts, deadlines...there are a lot of ways to do it. If you don't do this as a lawyer, then you could be allowing your buyer a rather lengthy free look at property with an easy out.

Let me give one concrete example: let's say you have a financing contingency in the contract. How do you draft the timing of the contingency? If the buyer fails to give notice, does the contract terminate automatically or is the contingency automatically waived? Neither? What about the efforts required? Does the buyer have to prive it tried to find a loan? Can the seller try to get the loan for the buyer or offer to carry the property? Does the seller have to cooperate in chasing down estoppels or subordnation agreements? And yes, I am stopping before I really get started. My time is my money, after all.

Just a humble thought for the day. Enjoy!

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The BigLaw Squeeze - finding lateral partners in Chicago

Dear Law.com: Tell me something I don't know. The "scoop?"

National law firms have rushed into Chicago during the past decade, especially in the past three years, but many are finding now that their collective arrival is fueling intense competition to fill those offices with lawyers.

I'd like to chalk it up to that old line from Meredith Willson's The Music Man: "But he doesn't know the territory!" Maybe so. But there's more.

Everyone and their mother seems to have decided to open a Chicago office, either by starting fresh with a few partners, by poaching from another firm, or by acquiring another firm. But, except for the larger players, then they cannot seem to grow it with lateral partners.

Some of it is just plain loyalty to an existing firm rather than jumping to a perceived greener pasture.

Sometimes you have good talent but a lack of a book necessary for BigLaw. To be perfectly honest, I am in that category. I neither have nor, more importantly, need, a big book of business right now. Some may find that awful; I actually find it comforting. If I go to one of the firms to which I am talking, great. If not, so far I'm better on my own than I thought I would be a month ago.

Others have good books, but lack something else that BigLaw might be seeking.

In other words, finding a partner (in the true sense of the word) isn't all that easy. So patience is a major league virtue. (BTW, I am patient, at least in this respect.) And some firms, simply stated, may lack that out of necessity, planning, money or otherwise.

My good friend Chris Percival hit the nail on the head (as usual):

There are about 75 national firms that have migrated to Chicago since the 1980s, and many of them seek the same types of lawyers -- those with books of business of at least $1 million and, likely, more than that. The firms often aim for offices of at least 100 lawyers and consider 30 to 50 essential to justify the cost of the office, said Chris Percival, a recruiter for Chicago Legal Search.

"I can't tell you how many firms have told us that's what they want to do," Percival said, referring to the 100-lawyer mark. "It's just not that easy."

Bingo! After all, you gotta know the territory.

Chris is awesome, by the way, if you need a legal recruiter. And she didn't even pay me to say that.

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Tuesday update: Lehman, REITs, law firms and half-full or half-empty?

So Lehman filed but is now back at the table with Barclay's to sell significant assets to them, AIG might be next (a trillion dollars?), the Fed meets today and may lower rates (100 bps = panic city?) and the market's in the tank. Oil prices? Down. What's up? The yen and the Euro.

REITs also took it on the chin. GGP is especially being hit heavy. I've written before that GGP's not going anywhere, but in this market all bets are off. My ex-partner, an ex-Wall Streeter, told me it was "absolutely inconceivable" that Lehman would go bust. Simon, according to David Bodamer, might be being beaten up unfairly.

The word on the street seems to be: perception trumps reality. Hank Greenberg on CNBC tells us that "it is in our national interest that AIG survive" and that it is a "national treasure." This is an open plea to the Fed to save it because he says the problem is only one of liquidity. He then tells us that an AIG bankruptcy will cause systemic problems in the market that an unwinding would be "as complex as it could be." (Call the lawyers!) How much of Greenberg's wealth and retirement is still tied up in AIG? Apparently a lot. And AIG's nt really reaching out to him either.

So is this a problem among opportunities or an opportunity among problems? Gerry Riskin has a great cartoon about this at his blog, and that's an excellent question not just for lawyers but also for the real estate market as well. It is a competitive opportunity.

And finally, on the law firm front: where will legal work go after this huge change in the market (cream rising to the top), and are Heller Ehrman's days numbered after yet another merger -- this one with Mayer Brown -- falls apart? I'll be sad to see such a fine firm collapse if it happens.

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BigLaw and SmallLaw partnerships - solutions to helping clients

As a now solo practitioner, I am sometimes asked how I can handle complex real estate transactions by myself. The answer? The same way I did at BigLaw. It is easy!

I was therefore happy to see this story about large and small firm "partnerships" for certain matters. I do wish they'd taken the next step, though.

Sometimes large firms refer matters to me because I can handle price-pressured matters at a more reasonable cost while also maintaining high quality. I can do it because of low overhead. And when my clients have huge deals needing a large staff, I send it to some great shops where I have relationships.

Other times firms refer work to me because they don't handle commercial real estate. So I am their guy, so to speak.

Out of state? I've got that covered with a network of local counsel that I've developed over 15 years in the business.

Non-transactional matters? No problem. I don't litigate, but I have friends who do, and I cannot tell you how many pieces of litigation I have referred to large and small firms.

What about wacky real estate matters? Sometimes I do them. But because the client comes first, I want them to have the best. So I have some sub-specialist lawyers on my list of people to call for some matters, such as GSA leasing, Cook County property tax appeals, local zoning, etc. I can do these things, but sometimes the sub-specialist is the right call.

Oh, shameless plug department: if you are one of those big firm or small firm folks out there (and I know you are reading), don't hesitate to drop me a line to see if we can work on deals going forward. I'm always looking to expand my base and meet good lawyers.

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Changes and transitions

My partner resigned from our law firm Tuesday.

It was the right thing for him to do and I am delighted for him, as he had an opportunity he simply could not pass up. Frank is a tremendous lawyer and person and I will miss working with him very much.

While I am a bit overwhelmed about possibly becoming a solo practitioner, in an odd sense, I'm also somewhat relieved, and I'm not sure why. Unfortunately, no time is a good time for this, and that's not anyone's fault.

I'm not exactly sure what I am going to do right now. I have several options that I need to weigh, and I'll keep you posted. But I promise I'll go back to writing about issues that you care about rather than my personal and my business life. After all, that's why you came here. If, however, you have thoughts or suggestions I'm always open to them.

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The more things change, the more they stay the same

Seen quotes like this lately?

The lawyers of America have laid their heads together and drawn up a lot of proposed reforms--for other people. The unpleasant truth is that the American public feel that no class needs reforming more than lawyers, particularly many of the shining lights of the profession. The man in the street is disgusted with both the lawyers and the courts.

Looks familiar, no? It comes from the September 15 issue of Forbes -- in 1923, that is. I guess complaining about lawyers is timeless.

Some of the biggest complaints come from major corporations, who pay huge bills to BigLaw to support seven-figure partner draws and $165k starting salaries. And yes, they pay to train the young-uns as a rule.

The Association of Corporate Counsel claims it has a solution (via Portfolio) that it will roll out next month, which appears to have much to do with sharing billable rates at law firms used as outside counsel.

And other smart people (in this case, Larry Bodine) are reporting the skill sets are what GCs are looking for, and they don't necessarily mean being the best or the most prestigious. Rather, transparent billing and responsiveness are important. Looking at the story, if I do say so myself the only criterion I don't meet is diversity, because I am who I am. Of course, I like to think a Polish-Czech USC grad combined with an Italian Notre Dame alumnus is pretty darn diverse.

I'm doing fixed-fee deals now. I think they can be fair, and it is nice not to have to fill out time sheets. But then so are my hourly rates compared to, oh, a second year BigLaw associate. If corporations really want to save money, and still get first-rate work, they'd be well advised to find themselves some good small firms to hire.

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Cadwalader chair: "I woudn't have changed a thing."

See here and here in the WSJ for more on the Cadwalader layoffs. I guess this is what happens when a law firm is run like a corporation and not a partnership. The telling comment to me is this:

The firm chased commercial mortgaged-back securities work when the practice was hot, adding a fleet of young lawyers to its structured-finance and real-estate practices to meet demand. Now, with that spigot turned off, one could argue that the firm is simply behaving rationally, cutting its unnecessary overhead. "There was a bubble, we rode that bubble, it contracted, and we adjusted," says W. Christopher White, the firm's chairman. "Even knowing what I know now, I wouldn't have changed a thing."

I admire White for his brutal honesty and cojones. Young lawyers better realize that this is not the profession I entered into fifteen years ago, for better or worse. (Worse, in my opinion.) Will the firm go away? Beats me. Some say it is a matter of time but I disagree. I thought CWT had some major layoffs like this some years ago that they said it would not recover from, and yet it did. Maybe my recollection is poor.

I'm not sure this is really a profession any more, at least at some levels. And I'm sad about that. But I also understand the desire to make money and that it often trumps benevolence or other qualities that make old-line partnerships seem almost quaint.

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If you are wondering what dirt lawyers are doing in California

This story may give you a clue. Some California real estate lawyers, especially on the residential development side, are not fully utilized, so they are using the time to work on restructurings, risk management and other related projects. The major California dirt boutiques mentioned in the story (interestingly filed under "small firms"...LOL) all say they are doing all right, and that while they may take some flat revenues or per partner profit hits, there are no plans to pull a Cadwalader. Heck, Allen Matkins is even larger by 15 lawyers!

As I have said before, this is a smart strategy. In the 1990s there was a dearth of junior real estate talent because no one joined the field for several years running. By maintaining numbers and not going nuts with growth and layoffs, there's more stability. In short, these firms learned what some firms (you know who they are!) did not learn in the last layoff debacle or two.

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Cadwalader layoffs

Apparently another 96 lawyers are being let go at Cadwalader today, meaning the total loss count this year is, if I can count, in excess of 130 people.

CWT is well known as one the major, major players in the CMBS market. I've worked with all three of their US offices (NY, DC and Charlotte), usually on the same deal. For whatever reason, CWT had this thing about running deals from multiple offices when I was borrower's counsel.

While I found the CWT people professional and thorough almost to a fault, my clients were sometimes unhappy, especially when the lender's counsel's bill (which the borrower pays) came out. We used to try to predict the amount as a little game. At least one client, as I recall, was so irked that it resolved to ask their lenders in the future to find other, more cost-effective firms to run the deals. And in the climate that was a few years back the lenders usually complied, moving the legal work to other firms -- sometimes outside New York -- where the lawyering was still excellent but the overhead was much lower.

Now, that didn't hurt CWT at the time because they were so crazy busy that it hardly mattered. And they got more than their share of the very best deals, which is befitting a top firm of smart lawyers. But now that the capital markets practice is at a virtual standstill there's nothing for this army of lawyers to do. And CWT makes no bones about its desire to be aggressively profitable.

“It’s exactly the shark tank that everybody says it is,” said former partner Robert Vitale, “If you’re a shark, it’s great.”

Layoffs are painful, but, at a shop like this, probably inevitable. You know what you sign up for here. And almost 100 lawyers are about to be much less comfortable than they were yesterday.

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The audacity of excellence?

I got a kick out of this story on lawyer frustration and how to strive to be "above average." Apparently, lawyers are part of an "unintended byproduct of a profession that confines its lawyers to prisons of bureaucracy, internal politics, dysfunctional interpersonal relationships, inefficient systems and ineffective leadership. It is heartbreaking to see people who expect so much from themselves and others toiling in environments that perpetuate underachievement."

I'm lucky. Even when I was in a big firm I didn't have too much of that, and now I am free to be as good as I want to be. David Freeman makes some excellent points, the best of which is to Demand a maniacal focus on the client. I've been doing that as long as I can remember, so this is no big deal for me. It is nice to see it reinforced from time to time though. Sometimes it is hard to get over the fact that it isn't about you, it is about the client. Your success is often in tandem with that client, so work hard and get the deals done and mutually reap the benefit.

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Chicago legal industry thoughts

An interesting (possible) incongruity I am finding: Half of GCs surveyed are planning to do more work in house and cut back on law firm usage (one big reason -- the cost of hiring BigLaw firms to do less than bet-the-company work).

Yet, notwithstanding this, smaller firms that could perhaps compete on this front are still merging into BigLaw. On the heels of Welsh & Katz (a fine IP firm) announcing its merger with Husch Blackwell Sanders (itself a recent merger!), now we have the first-rate mid-sized Schwartz Cooper dissolving, with almost all of its lawyers moving to Detroit-based Dykema. In turn, Dykema got its start in Chicago in 2004 by merging with Rooks Pitts, also a well-known mid-sized firm.

So, is this economies of scale? A fear that you have to grow to compete? How will clients react? Schwartz Cooper was well-known for its work for LaSalle Bank (now B of A); did that play into it as well? I'm going to have to make a phone call or two.

One last thought: just as we have lost most of our locally run banks, is this now the irreversible trend for law firms, too? I hope some stay around. One that I particularly thought did something interesting recently is Much Shelist (which is well known for having a top real estate team), which announced the creation of a board of outside advisers to help with its strategic direction. I'll have to follow this and see where it takes them.

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What the heck is a "small firm" anyway?

Super-blogger Susan Carter Liebel had a good post yesterday about solo practitioners and small law firms winning not on price but on value provided to their clients. She cites a story from The Complete Lawyer by Marcie Shunk captioned "Welcome to the Age of the Smaller Firm."

The thesis of this article? Small law firms are the real wave of the future.

That's all fine and dandy, until you read on. Susan's post is spot on, as is the general concept of the Shunk post, but I do have to take some definitional exception to the term "small firm." It seems to me that, according to this story, anything outside the AmLaw 200 is considered a small firm.

Huh? These are all super firms that are mentioned here. But I would not call them small by any means. Oppenmheimer, Wolff & Donnelly has 107 lawyers by my count. Keesal Young? 70. Bartlit Beck? 65. Jones Walker? Around 230!

There are plenty of real small firm lawyers that are doing first-rate work. Throwing out the best boutique firms in the country as examples of great small firms seems a little left field to me. It almost tells me that people think the days of "real" small firms may be going by the wayside. If that's the case, then so be it. But if this thesis is true, then show me lawyers in firms of less than 10 or 20 people servicing some Fortune 1000 clients.

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Net, gross, modified, gross...huh?

Someone near and dear to me asked me to draft an office lease for some property that person owns. I received a hand written, one page term sheet with a base rent figure.

What freaked me out until I read it more carefully was the treatment of gross and net items in the lease. Those of you in the know (probably all of you if you are bothering to read this far) are aware of leases such as bond leases, net or triple net leases, gross leases, modified gross or plus-E leases, and the like. (You can find what I think is a good recent summary written by Michael Mandel here. New York is a whole ballgame of its own sometimes, especially dealing with the form Manhattan leases with their crazy long riders.)

All I was reminded of was this: you cannot just draft blindly and assume every deal is the same. And the terms I mentioned above, while very, very helpful, are not always precise. (It reminds me of my first plus-E lease in Texas.) For instance, I am drafting a so-called "gross" lease here, but the tenant will have separately metered premises and will pay for half of the trash removal. The landlord is apparently covering everything else. (We'll see once I finish the first draft and discuss it with the client.)

And for you clients: don't get annoyed when we ask what you think might be crazy or dumb questions. It is for your protection, not to run up the bill.

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