After a lengthy drought, real estate lawyers are a hot commodity again.
The biggest firms in Philadelphia and other cities with booming real estate markets say finding lawyers skilled in handling the zoning, tax, and transactional pieces of complex projects has become a near impossibility.
There simply aren't enough lawyers to go around, and that has stretched existing practice groups and forced firms to move lawyers internally from other specialties.
"Voracious is the word that I would use to describe what is going on," said Bart Mellits, chair of Ballard Spahr's real estate department, which has more than 100 lawyers. "We cannot hire enough real estate lawyers."
Ballard cut back staffing in its real estate practice in 2008 and 2009, when financial markets collapsed. Since then it has recovered much of that ground.
Among its big projects recently have been the new 59-story Comcast tower in Center City and plans by Drexel University and developer Wexford Science + Technology to transform a former high school site in West Philadelphia into a business and technology center with retail development and a school.
"We are fully committed . . . and that has not been the case for a while," said Kevin Blanton, chair of the real estate group at Schnader Harrison Segal & Lewis.
Starting salaries for an experienced real estate lawyer below the partner level now can run as high as $230,000 a year in Philadelphia.
At Fox Rothschild, a Center City-based firm with 650 lawyers, the real estate practice has grown from about 70 lawyers in 2008 to about 100 nationwide now.
Mark Silow, the firm's managing partner, said that his firm, too, was having trouble finding enough lawyers. The construction boom is underway in most big cities, so firms such as Fox Rothschild don't have the option of redeploying lawyers to places where they are needed most.
They're needed most everywhere.
One reason for the shortage is that many firms cut back after the market crash of 2008Firms laid off associates by the hundreds, deferred the starting date of lawyers they had already made offers to, and in some instances decided not to hire any first-year lawyers at all.
For three or four years, there was little work for young lawyers.
Now firms are finding that the younger but experienced lawyers who traditionally did much of the real estate work, and were very profitable for firms, are in short supply.
"There is a whole lost generation of new associates in the three-to-five-year category because if you go back that long, it was a much quieter period," Silow said. "Associates were not getting hired, period. There's a real talent gap now."
Driven to a large extent by the collapse of the national housing market and the ensuing turmoil among lenders, the depth of the law firm cuts was unprecedented, particularly in real estate.
That is what makes the latest turnaround remarkable to many longtime observers of the real estate practice.
"I was born and raised and only worked in Philadelphia and I have never seen anything like this," Silow said.
What also distinguishes the recovery in Philadelphia is that it is broad based and not focused on one sector of the market, Silow said.
Commercial development, notably along Market Street with the planned renovation of the Gallery mall, residential construction, and institutional projects funded by Drexel University and the University of Pennsylvania, among others, has turbocharged demand in a way that is unusual for Philadelphia, which typically lags Boston, New York, Washington, and other major cities.
But not now.
Stephen Aichele, a senior real estate partner at Saul Ewing, which is representing Pennsylvania Real Estate Investment Trust in the $575 million redesign of the Gallery, said his firm's real estate business was up significantly, and some of the new business is coming from out-of-towners looking to invest in commercial projects.
"Our guys [in the real estate practice] are starting to get a little frayed around the edges," Aichele said of the added workload. "The real estate market has picked up nationally, so we can't draw from our office in D.C. or in Wilmington. It's busy everywhere."
Sooner or later, savvy real estate lawyers say, the cycle will turn and projects will start to dwindle. Then, most likely, the bankruptcy lawyers, wanting of business of late, will be back in demand.