Getting Down To Basics – So I’m A Real Estate Attorney…
Q: Are there any unique benefits to being a real estate attorney?
A: Real estate can be a professionally smart career focus for several reasons. Because it is a niche practice, attorneys feel they can get their arms around the law and become an expert in the field at a faster pace than in other practice areas. At the same time, it can involve a wide range of sub-areas (finance, development, acquisitions, zoning, leasing, residential), which keeps attorneys interested and feeling challenged, with potential to develop a broad skill set. On a practical level, real estate attorneys have a greater ability to relocate, unlike some areas of law that are more geographic-centric. And most real estate practices are lean groups within law firms and, even when they are not, real estate transactions tend to be leanly-staffed, affording attorneys more opportunity to learn and gain substantive experience early on.
Q: Are there differences between real estate practices available in BigLaw?
A: Law firm real estate practices can generally be broken down into one of four buckets. Most attorneys who consider going into real estate visualize being part of the meaty, broad-based, stand-alone real estate practices where they will gain exposure to the widest range of clients (including developers, real estate investment firms or companies that attorneys often hope to join one day), gain the most expansive real estate-related skill set, and be part of the most notable transactions in the real estate industry. Such real estate practices are also most likely to be profit-generating practices for the firm, which gives them better leverage to make their associates up as partners.
That said, many real estate departments at larger firms, in New York in particular, are not stand-alone practices, but rather service groups for their M&A departments, meaning they represent the firm’s M&A clients with the real estate aspects of their mergers, acquisitions, LBOs, joint ventures, etc. On the positive side, attorneys in such practices learn valuable transactional skills which arguably allow them to market themselves for corporate roles as well as real estate roles in the future. Such practices can be disappointing, however, to those who go into real estate to do “dirt” work, represent developers or handle stand-alone real estate deals for real estate-specific clients. Also, because such groups are more service-oriented, they can have difficulty advancing their associates to partner.
Other real estate practices are predominantly finance-focused – they represent lenders in various financings where real estate assets are the collateral or the target of the acquisition and/or specialized CMBS lending or “Fannie Mae/Freddie Mac” mortgage loan work. This is a specialized area that primes attorneys to go in-house to a bank or financial institution but makes it difficult to be competitive for other real estate opportunities that require a broader skill set. Because this is such a focused sub-area, attorneys can get a handle on this work quickly if they are finance-minded; if they are not, however, we often see attorneys looking for a broader real estate experience after a couple of years.
A small number of firms have practices (and more often, specialized boutiques) that focus on land use/zoning/condo and co-op representation, which are uber-specialized areas that will be interesting to someone who wants to master a specific process and set of regulations in the real estate world. Of the four buckets, this work tends to offer the most predictable lifestyle. But it also tends to offer the most specific experience and, therefore, limited skill set for the future.
Q: What if I want to go in-house?
A: In-house real estate opportunities represent only a small number of the total in-house openings available. Accordingly, attorneys should think early on about what types of roles they want to be marketable for and whether the experience they are getting and the clients they are gaining exposure to align with those positions. If the dream is to work for a developer but you’re part of a real estate finance practice, you will find it challenging to be competitive for broader real estate positions. On the flipside, if you want to work for a bank (or similar type of financial role), you should specialize early with a real estate department focused on finance work, not only to get the depth of skills but also to maximize exposure to the right types of clients.
Leasing experience is a common skill set requested for in-house opportunities (either doing it exclusively or as part of one’s responsibilities) so it’s smart to take on some leasing work while at the law firm. That said, be mindful that specializing in leasing limits your marketability.
Q: Partnership prospects?
A: Making partner in law firm real estate practices can be tricky since they aren’t usually the biggest or most profitable groups in the firm – which means the business case for making another partner in the group becomes complicated. As with any practice, you should evaluate within the first 3 – 5 years your group’s position in the firm, its profitability, the gravitas of the partners in the group in relation to the rest of the firm, and your overall brand, particularly in comparison to your peers. Because of the typically smaller size of the group, these questions are just more magnified than they might be in a large, busy, global M&A practice.
Please don’t hesitate to reach out if I can answer any additional questions.