Hardly anything tangible is subject to more legal interests than commercial real estate. My practice in this area concentrates on representing sellers, buyers, and lenders, but there can be many other parties claiming rights in a piece of dirt over the years, and all of them probably need legal representation at some time during their relationship with the property.
Consider a possible time line for a commercial property. It is annexed by a governmental entity, which may impose restrictions on its use. The owner of many years sells it to someone who develops the land or holds it for a while and “flips” it to a developer. A title company inspects and insures title, requiring curative work if it finds problems with title. The developer seeks rezoning or modification of governmental restrictions and may impose its own restrictions through a property owners’ association, deed restrictions, or other means. The developer builds a multi-tenant complex (for example, a building, an office condo park, or a strip center). Architects, engineers, contractors, and subcontractors are involved. The governmental entity appears again to monitor compliance with building codes and permits. Real estate brokers and leasing agents are next, trying to fill the property with tenants. A management company steps between owner and tenant. Architects, contractors, and subcontractors return to finish out the tenants’ spaces. Lenders assist tenants with financing. When the center has established a good track record, ownership changes and a new lender is involved. Landlord-tenant disputes must be resolved. Mismanagement of the property results in default, leading to any one or more of litigation, restructuring, foreclosure, and perhaps insurance claims.
So what was a bunch of dirt, home to nothing much more than armadillos in my part of Texas, might eventually draw the attention of dozens of people, each of whom may seek legal counsel. In my county’s boom-or-bust era of the 1980s, the time line described above was often compressed into a very few years.
Some players (such as developers, large commercial banks, and insurance company lenders) use large firms or in-house legal departments, but many of the players are smaller operations that use smaller firms or sole practitioners on a per-job basis.
Real estate seems to attract more than its share of players who are greatly concerned with speed. Everything must be done by tomorrow if not this afternoon! In my experience, most of these impatient would-be clients also reward good work and reasonable fees with loyalty. A nimble solo who is always available often can outperform the big law firms, and impressive performance on the first deal can attract the client for the next deal. In this area of practice, as in many others, the lawyer need not be smarter than the competition but can win a client’s business by being attentive and prompt (and, of course, competent).
Client-development techniques used in other areas of practice can work here as well: Do plenty of networking. Treat everyone you meet as someone who may need your services. An owner of a strip center or small office building may be the neighbor down the block, a member of your church or civic club, or someone you happen to start chatting with, so keep polishing your elevator speech and trot it out in appropriate situations.
Referrals from other attorneys can often be the best source of work in this area. Property settlement in divorces can often involve conveying an interest in a commercial property from one spouse to the other. That might be outside the divorce lawyer’s expertise, and many divorce lawyers prefer to refer such work to a real estate attorney. Probate attorneys are another likely source of work. The estate may include a commercial property that the heirs wish to sell rather than have it remain in their hands, and the probate attorney may want to bring in a real estate attorney.
Although title-insurance practices are not uniform from state to state, or sometimes even among different parts of the same state, title companies often need quick preparation of a deed and will turn to the first attorney who comes to mind to have it prepared. The fee can be small, but often the work can be steady and staff can handle most of it. Consider adding title companies to your list of targets.
Lenders can be an even better source of commercial real estate work. That kind of lending is not active in many economically depressed parts of the country and is depressed in even the healthiest local economies. Still, in my metropolitan area, there is work to be had. Typically, lenders prefer to remain with established relationships so long as all goes well, but they may be interested in meeting other lawyers who impress them with interest in starting a relationship. And the loan officer at Bank A who likes your service may someday move to Bank B and want to continue using you.
Understanding who might have an interest in a piece of dirt can help you identify players with whom to seek relationships, and relationships are the most important factor in generating commercial real estate work.