Attorneys on the homefront: Housing collapse created new kinds of cases

A sluggish economy compounded by legislative and regulatory issues haven’t put a damper on the expectations of attorneys in Las Vegas. Most admit the industry shrank significantly during the recession, but adaptation has allowed many to survive.

The firms that thrive are financially viable again thanks to reduced staff, trimmed operating budgets and restructured fees.

Some even adjusted their pay structures to keep their clients.

“Literally, I’ve accepted livestock. And I had somebody pay me in silver coins,” said Tisha Black, managing partner of Black & LoBello.

“There were people I grew up with who were devastated. I couldn’t charge them $200 to talk to me.”

Now, Black said, the legal community is in a period of adjustment, with some firms scaling back and others closing up shop altogether. During the recession many consumers pushed back against big fees and hourly rates, she said, forcing firms to change their structures.

Others created a niche for themselves in real estate law.

Phillip Aurbach, of Marquis Aurbach Coffing, survived and thrived by representing office building and shopping center developers faced with bank foreclosure.

“The banks have absolutely a callous and cold attitude,” Aurbach said. “When the economy was on the verge of collapse and the bank industry was reeling, the government helped them. Now, they’re not helping the developers who are the entrepreneurs.”

It’s a similar story for residential real estate attorneys, who estimate that a majority of their business involves short sales or loan modifications on behalf of homeowners and business owners.

“Unfortunately, things aren’t really looking up for the people walking in the door to see us,” said Jamie Cogburn, founder of Cogburn Law.

With nearly six out of 10 homeowners in Las Vegas still underwater on their homes, the extension of mortgage relief will provide at least one more year of a key housing and tax benefit for homeowners.

With the new extension, homeowners now have less than 12 months to take advantage. And while it may seem like a long time until the end of 2013, keep in mind that short sales can take up to six months or more to complete.

Cogburn said his firm will help with short sales for both residential and commercial properties so that land owners see minimal impact on their credit ratings.

Most homeowners, however, would rather remain in their homes.

Loan modifications, he said, involve a trickier process in working with lenders, but his firm helps a homeowner navigate it.

“A lot of people would rather keep their home now that values are going back, and if they can lower their mortgage payment,” Cogburn said.

The real estate market is beginning to rebound, Cogburn said, which could offer his firm the opportunity to resume other real estate work.

“We’re seeing developers start to build again,” he said.

The Las Vegas Business Press profiled 10 prominent real estate attorneys dealing in a variety of specialties from short sales to eminent domain.

Following are their personal stories, background and take on their ever-changing industry.

J. Randall Jones, founding partner, Kemp, Jones and Coulthard

After nearly two decades of litigation experience, including time in front of the 9th U.S. Circuit Court of Appeals and Nevada Supreme Court, J. Randall Jones was tempted to occupy the first chair at the counsel’s table when one of his cases reached the U.S. Supreme Court in 1998.

But with health insurance coverage for nearly 90,000 Nevada residents at stake, he followed the standard practice of bringing in a Supreme Court specialist to deliver the oral arguments. Ultimately, it paid off with a 9-0 ruling in his favor.

But even just sitting at counsel’s table as a spectator, “You could feel the history and the importance and the solemnity of where you are,” he remembered. “It’s really intimidating.”

To a large degree, Jones was born into the legal profession. His father, Herbert Jones, and uncle Clifford Jones were among the founders of the Jones Vargas firm that for years was one of the most prominent in Nevada. However, J. Randall Jones admits his father doubted whether he would make it.

At the University of Nevada, Reno, he recalled, “I spent a lot of time skiing and not so much studying.” But he always thought he would continue the family tradition — his brother Mark is a partner in the firm — and began practice in 1981.

He quickly figured out that he had an affinity for in-court work and has stuck with it for more than three decades. About half of his practice now involves some form of real estate, with the rest a mix of cases that he describes as “eclectic.”

Recently, he joined the legal team representing CityCenter, operated and half-owned by MGM Resorts International, in its massive dispute over construction defects, particularly concerning the unfinished Harmon Hotel. This came while winning a five-month jury trial in Clark County District Court over home installations of high zinc, yellow-brass plumbing components that allegedly break down over time.

“We were very fortunate that our practice was not really affected when the economy slowed down,” he said.

After all these years, he still feels the adrenaline rush when preparing a case for a panel of peers, even a marathon one.

“Jury trials are very intense events,” he said. “They really take a lot of energy, time and effort. If you don’t win, you don’t get a prize for second place.”

— Tim O’Reiley

Gary Schnitzer, principal, Schnitzer, Sloane & Johnson

Gary Schnitzer’s fundamental tenet for practicing real estate law is quite simple and hardly innovative.

“The key to any attorney’s practice is to be flexible,” he said. “What you do today may not even exist 10 years from now.”

On the ground this has meant negotiating tricky swings in the market.

For years, he said, “Much of my practice involved putting together business relationships. Buy, sell, build, finance. Then it became how to get people out of this mess.”

Schnitzer, who moved to Las Vegas with his family as a child in 1964, saw mostly unbroken good times after hanging out his attorney’s shingle 33 years ago, except for a slowdown in the mid- to late-1980s.

But the market began to plateau in 2006, then plummet two years later. He said he didn’t see the drop coming despite his extensive work for lenders.

“This is contrary to everything taught by our parents and grandparents, that you were never going to lose money on real estate,” he said.

The crash of both the residential and commercial markets brought new legal issues. For example, he became involved with fending off challenges to foreclosures based on the involvement of the Mortgage Electronic Registration System, a common registry of home loans. Thousands of homeowners challenged the system’s ability to foreclose on behalf of member lenders. Last year, however, the Nevada Supreme Court issued a ruling that validated MERS’ role in the process.

Overall, he thinks that the Legislature’s actions in 2008-10 to try to keep homeowners in place despite defaults has exacerbated the problem. With people staying in houses they can’t afford and knowing they eventually must leave, they have no incentive to put money into maintenance. This drags down property values for the surrounding neighborhood even more than would have happened otherwise.

In the past year or so, he said, lenders have been increasingly willing to work out deals with lenders rather than push foreclosures to the point where people file for bankruptcy protection. Nevertheless, a large inventory of homes exists that needs to be dealt with.

Moreover, he predicts, the short selling window could soon close and bankruptcy filings could mount again. Federal tax law had always treated the deficiency between the amount of a mortgage and the lower short sale value as taxable income for the individuals, but that provision was suspended in 2012. This tax holiday will end in January .

As a result, more people may resort to bankruptcy as the most financially palatable alternative, he said.

— Tim O’Reiley

Jamie Cogburn, founder, Cogburn Law

Real estate law was much different for Jamie Cogburn when he first opened his law office in 2005.

Much of his work involved transactional law surrounding raw land and development agreements. His litigation practice involved disputes over contracts and land deals.

Business has changed.

“Unfortunately, things aren’t really looking up for the people walking in the door to see us,” said Cogburn, 35, who oversees the Cogburn Law Offices.

Today, Cogburn estimates that 90 percent of the real estate work for his law practice involves short sales or loan modification on behalf of homeowners and business owners.

It’s all about helping clients, he said, who have been ravaged by the downturn in the housing market.

When the recession first hit, Cogburn said many homeowners suffered because of financial reasons; either they lost a job or they were forced to take a cut in pay. With home values dropping, today’s homeowner views a foreclosure “not as a hardship, but rather a business decision.”

Cogburn said his firm will help with short sales for both residential and commercial properties so that land owners see minimal impact on their credit ratings.

Most homeowners, however, would rather remain in their homes.

Loan modifications, he said, involve a trickier process in working with lenders, but his firm helps a homeowner navigate it.

“A lot of people would rather keep their home now that values are going back, and if they can lower their mortgage payment,” Cogburn said.

The real estate market is beginning to turn around, Cogburn said, which could offer his firm the opportunity to resume other real estate work.

“We’re seeing developers start to build again,” he said.

Cogburn, whose firm employs seven attorneys, also does work in personal injury and employment law. Cogburn worked for Marquis & Aurbach before opening his own law practice.

He served as a law clerk for Clark County District Judge (now Nevada Supreme Court Justice) Ron Parraguirre.

— HOWARD STUTZ

Kermitt Waters, founder, Law Offices of Kermitt L. Waters

It seems like there wouldn’t be eminent domain law in Nevada without Kermitt Waters.

The Texas-born attorney has spent 40 years defending the rights of property owners against government intervention in land condemnation cases.

There haven’t been many cases he’s lost.

“Nobody does it like I do,” said Waters, who still speaks with a distinct and folksy Texas-twang despite living in Nevada since 1966. “It’s certainly a fairness thing to me. The government tries to cheat people out of their money. I don’t allow the government to abuse my client’s constitutional rights.”

Waters actually used to work for the government.

After earning his law degree from Texas Southern University in 1965, Waters handled eminent domain and land use cases in his home state. A year later, a friend persuaded Waters to visit Carson City and check out the job situation.

He landed a position with the Nevada attorney general’s office following an off-chance meeting with then-Attorney General Harvey Dickerson at the Ormsby House coffeeshop.

“He heard me talking and heard my accent and asked us to join him for lunch,” Waters recalled. “When he asked if I ever did eminent domain work, I said yes. He told me, ‘You’re hired.’ I asked him, ‘Who are you?’ ”

Waters also worked for the Legislative Counsel Bureau and the Las Vegas city attorney’s office, where he successfully fought utility company rate increase requests in the early 1970s.

After opening his private law practice, Waters devoted his time to eminent domain cases. Several of his land condemnation trials resulted in landmark opinions that favored the rights of property owners.

Waters still represents only land owners today for just a contingent fee.

At the top of his firm’s website, Waters states that he won’t allow government, utilities or other agencies to take property or condemn land for public use without a landowner’s consent.

“I am my clients’ best defense,” Waters said. “I am committed to obtaining all the compensation for which they are entitled.”

— HOWARD STUTZ

Marti Ashcraft, owner, Ashcraft Lawyers

Marti Ashcraft wanted to be a lawyer from a very young age, but had no particular reason for her passion.

There were no lawyers in her family, and she had no friends who were lawyers, so her mother used to speculate Ashcraft watched too much Perry Mason on TV.

“I have always liked to play devil’s advocate and I’ve always loved to debate,” Ashcraft said.

Today, she specializes in business transactional law, business litigation and subspecializes in energy and renewable energy law. Before opening her one-woman shop, Ashcraft practiced at some of Southern Nevada’s biggest firms.

Among them were what was at the time Kummer, Kaemfer, Bonner and Renshaw; and Lewis and Roca. In 2009 she decided to take the leap, partly to circumvent much of the administrative responsibility that comes with a big firm. Ashcraft’s other motivation was her clients, who were small- and medium-sized businesses that could no longer afford big law firm fees.

“I saw an opportunity to offer my clients big-firm expertise but to do so at a much more affordable price for them,” Ashcraft said.

At first, she said, going it alone was frightening because she was accustomed to a regular paycheck. But that fear soon passed.

“If I’d known how wonderful it was going to be, I would have done it a long time before I did,” Ashcraft said.

She practices what she calls preventative lawyering, aiming to keep clients out of the courtroom.

“Very rarely at the end of the day is anybody really happy with the outcome (from litigation),” Ashcraft said.

As for the future of law, she had some ideas.

“I think you’re going to see solo practitioners and small firms become increasingly popular and successful,” Ashcraft said.

Ashcraft, who has been practicing for 32 years, moved to Las Vegas in 1969 with her family.

A graduate of Clark High School, she attended Pomona College and went to law school at Georgetown Law Center in Washington, D.C. When she’s not working she said she enjoys good food and wine with her husband, Don.

— LAURA CARROLL

Tisha Black, managing partner, Black & LoBello

Tisha Black practices primarily in complex corporate and real estate transactions, with a focus on corporate formation, mergers and acquisitions, real property purchase and sales, financing, distressed property foreclosures, modifications and litigation, and landlord tenant matters.

Black, a native Las Vegan with 42 cousins, never thought she’d practice real estate law.

“I thought I would be some unbelievable trial attorney or save all the children,” she said.

Growing up in the local real estate world — her family built about 11,000 housing units in the valley — Black said she thought she was sick of the trade. But after becoming an attorney and opening her shop, family friends began throwing her work. And, as it turned out, she really enjoyed it.

Black attended Boston University but came back to Las Vegas when she was ready to practice law. Her firm, which employs 14 attorneys, weathered the recession, but not without being flexible. And in some ways, Black was able to fulfill her altruistic goals.

People who couldn’t afford her services during the recession asked her questions for free, or if they needed more help, Black worked out different pay structures for those clients.

“Literally, I’ve accepted livestock. And I had somebody pay me in silver coins,” Black said. “There were people I grew up with who were devastated. I couldn’t charge them $200 to talk to me.”

Now, Black said, the legal community is in a period of adjustment, with some firms scaling back and others closing up shop altogether. During the recession many consumers pushed back against big fees and hourly rates, she said, forcing firms to change their structures.

“It’s tough,” Black said.

— LAURA CARROLL

Joe Kozlowski, shareholder, Gordon Silver

When Joe Kozlowski got to law school in Buffalo, NY, there was one legal area that grabbed his attention — real estate. It was his law school concentration.

“It’s something I always wanted to do in law school,” said Kozlowski, a 38-year-old Henderson resident. “The thing that intrigued me was real estate and the transactional side of things

Kozlowski, who received his law degree from State University of New York, Buffalo Law School in 2003, sent a resume to and interviewed at the Las Vegas law firm Gordon Silver.

He got the job. He’s been working there for the past decade after moving to the Las Vegas area in 2003.

Kozlowski works at a law firm that is growing with 53 lawyers and another 121 staff members in three offices. Since he began working in the Las Vegas home office, Gordon Silver has also opened offices in Phoenix and Reno.

“We’re growing. It’s very exciting,” Kozlowski said.

Kozlowski is married and his wife is a fellow lawyer at the firm.

His past and current clients have ranged from banks to hotel-casinos: Bank of Nevada, Nevada State Bank, Pacific Western Bank, McDonald’s Corp., Lennar, Kimball Hill Homes, RSM McGladrey, Sullivan Square, Parsons Corp., Performance Contracting, Kittrell Jenson Contractors, Hard Rock Hotel & Casino, Credit Suisse, Century Gaming, Caesars Entertainment Corp. and several National Basketball Association players.

While Kozlowski was born in Rochester, N.Y., and graduated from Ithaca College in central New York state’s Finger Lakes region, he loves the West’s open spaces.

When not talking with clients, Kozlowski enjoys riding his mountain bike, golf, hiking and snowboarding.

Kozlowski fell in love with the West before he attended law school when he lived in Denver for three years and worked as a substitute teacher.

He went to law school because he was looking for a new challenge.

— ALAN SNEL

Phillip Aurbach, partner, Marquis Aurbach Coffing

Phillip Aurbach has more than three decades of real estate experience and has watched Las Vegas explode with growth over the years.

But with the flood of commercial property foreclosures in the past few years, the veteran Aurbach, 62, had developed a legal niche — representing office building and shopping center developers faced with bank foreclosures.

“The banks have absolutely a callous and cold attitude. When the economy was on the verge of collapse and the bank industry was reeling, the government helped them. Now, they’re not helping the developers who are the entrepreneurs,” Aurbach said.

Aurbach has also watched his law firm grow. The married Las Vegas native and father of two said Marquis Aurbach Coffing has 130 employees, including 40 lawyers and 13 owners of the business. The firm is so big that its offices are housed in two buildings in Summerlin.

After growing up in western Las Vegas, Aurbach attended Western Kentucky University on a tennis scholarship. He graduated in 1973 with a degree in business administration with a finance emphasis. He then attended the University of San Diego School of Law and graduated in 1977 after serving as the research editor of the San Diego Law Review.

After a brief period with the Clark County district attorney’s office and several law firms, Aurbach became a partner in the firm of Lehman & Aurbach in 1987. When his partner, Jack Lehman, was appointed District Court judge by Gov. Richard Bryan, Aurbach merged his firm with Al Marquis’ firm.

When Aurbach is not in the office or in court, he’s probably on the tennis court. Earlier this month, he was in a National 60 and older tennis tourney in Palm Springs, Calif., reaching the round of 32.

He and his wife have four grandchildren.

“That’s the most fun — watching the grandkids grow up and not having to deal with them 24/7,” he said.

— ALAN SNEL

Jacqueline Ackerman, principal, Law Offices of Jacqueline S. Ackerman

Lawsuits aren’t Jacqueline Ackerman’s cup of tea.

Commercial litigation was a big part of Ackerman’s first job out of law school, in Los Angeles, about 25 years ago. It left her unfulfilled.

“Clients were never really happy, regardless of how things turned out,” Ackerman said. “Even if they won, they felt like they lost because they spent a ton of money to get to that point. I was preparing a lot of paperwork, and responding to a lot of paperwork, and it just didn’t feel like a good use of my time.”

So Ackerman jumped at the opportunity to go into transactional work at a different Los Angeles law firm. There, her experience in court paid off. Her insider’s view of how business deals can go wrong helped her write better contracts, look more creatively at how agreements can fail, and use clear language to avoid potential pitfalls.

“I try to anticipate those situations and draft contracts to avoid them, or at least maximize clients’ positions should those situations ever arise,” she said.

Ackerman’s law career was inspired partly by traditional Americana and Hollywood glamour. She didn’t know any lawyers, but an attorney at an eighth-grade career fair opened her eyes to the possibility of persuading people with powerful writing and speaking. Throw in courtroom dramas on TV and in the movies, and Ackerman knew what she wanted to do.

After earning a bachelor’s degree in government from Dartmouth College, Ackerman got her law degree from Harvard Law School.

But it was family that brought Ackerman from Los Angeles to Las Vegas. Her parents moved here in 1993, and she followed three years later, to take advantage of a booming economy and to keep her young daughter near extended family. Her first job was with Lewis Homes, then the biggest builder in town, handling administrative tasks such as streamlining processes. That gave her a front-row seat when the housing economy took off in the early 2000s.

“I got to see it from the ground up, as one of the biggest engines of the economy other than gaming began to grow. It was very exciting for me,” said Ackerman, a California and Nevada bar member, and immediate past president of the Southern Nevada Association of Women Attorneys.

But in 2008, as with so many other real estate attorneys, Ackerman’s work changed. With residential construction at a standstill, she began handling commercial loan modifications for owners of office parks, apartment complexes and undeveloped land. She also began helping distressed owners in bankruptcy hang onto their properties.

Today, though, the economy is bouncing back, and the development-related work that drove her career 15 years ago is returning, bringing with it the midsized investors she traditionally worked with.

“It’s coming full circle,” she said.

— JENNIFER ROBISON

Robert Kolesar, managing shareholder, Kolesar & Leatham

When sunny Las Vegas beckoned, Robert Kolesar couldn’t resist the opportunity to flee Cleveland’s snow-covered, Rust Belt economy.

It proved a great career move: Kolesar got in on the ground floor of the Las Vegas Valley’s real estate boom, working first as an attorney inside a prominent local bank, and going on to build a firm of nearly 35 lawyers.

Kolesar didn’t set out to work in real estate and transactions; he stumbled into it on his first job with a shopping mall developer just out of law school. But he said the nature of real estate law suits him.

“I enjoy working with people who are very knowledgeable in their industry,” he said. “I felt I would get to know their business as I represented them. It has been very fulfilling.”

The story of Kolesar’s move begins nearly three decades ago. The Case Western Reserve University School of Law grad was 14 years into a career as a real estate lawyer, working first with Forest City Enterprises, the Ohio company that went on to develop Galleria at Sunset mall and the new Las Vegas City Hall. Forest City was an early pioneer in shopping-center development, so Kolesar benefited from immersion in leases, purchase-sale agreements and other classic real estate contracts. After five years, he took his experience to a Cleveland bank, and added finance to his skills set.

In 1982, while in Las Vegas as part of a West Coast vacation, Kolesar spotted an ad “that had my name on it.” Valley Bank of Nevada, the pioneering bank that financed early Strip casinos and had billionaire recluse Howard Hughes among its clients, needed an attorney with real estate banking experience for its legal department. Kolesar worked for Valley Bank for four years, serving as senior vice president, senior trust officer and general counsel until 1986, when he helped launch the firm that would become Kolesar & Leatham, a 34-lawyer firm that practices in areas including bankruptcy, intellectual property, labor law and trusts and estates.

The firm’s real estate practice in particular has changed significantly since the downturn, Kolesar said. The big growth area today is litigation — legal tussles as banks and investors argue in court over who owes what. That’s a far cry from the constant parade of lease deals, financing, refinancing and purchasing contracts that reigned in the boom. Kolesar & Leatham’s real estate litigation division has grown to handle the new business, but Kolesar has preferred to stay on the transaction side.

Kolesar, who has served on the boards of HELP of Southern Nevada, the National Conference for Community and Justice, the Las Vegas Metro Chamber of Commerce and the Las Vegas Global Economic Alliance, said he thinks routine deals will make a comeback as the local population grows. But leasing and sales activity will probably never return to prerecession levels. And that’s OK with Kolesar, who also manages a lot of the firm’s daily activities.

“I don’t really miss it (the high transaction volumes). It’s much healthier for growth to be slow and measured. It was all too good to be true, though nobody would admit it.”

— JENNIFER ROBISON