Business Monday

Nightlife, fashion among law firms’ new niches

Fashion law attorney Danielle Garno, right, chats about swimwear with her client Bianca Coletti, a designer. Garno, a Greenberg Traurig shareholder, wants to specialize in design-industry issues such as the Foreign Corrupt Practices Act and trademark infringement.
Fashion law attorney Danielle Garno, right, chats about swimwear with her client Bianca Coletti, a designer. Garno, a Greenberg Traurig shareholder, wants to specialize in design-industry issues such as the Foreign Corrupt Practices Act and trademark infringement. pfarrell@miamiherald.com

Oenophile Palm Beach billionaire Bill Koch, founder of energy firm Oxbow Carbon LLC, says he has spent about $35 million in lawsuits in a long-running campaign to expose counterfeit wine sales by collectors, auction houses and retailers.

Passions, such as Koch’s — combined with South Florida’s proliferation of wealth, leisure activities, demand for luxury goods, complex international business transactions and stiff competition for lucrative legal business — are prompting creation of specialty practices for law firms across the region.

While real estate and commercial litigation are still mainstays for many local practices, niche practices are becoming increasingly common in the wake of Miami’s emergence as an attractive city for the global uber-rich. Other burgeoning practices center around nightlife, fashion, international business and cybersecurity — all business sectors growing as South Florida diversifies its economy.

“Foreign investors have transformed our landscape,’’ said John Sumberg, managing partner at Miami’s Bilzin Sumberg. “One-third of our business is international. The emphasis today is on all areas, not just bilingual investments.”

Currently, Sumberg’s firm is seeing “a lot of flight capital from Brazil,” due to the impeachment of the country’s president Dilma Rousseff earlier this month.

Foreign investors pouring money into South Florida are from places “either where there’s prosperity or where there’s flight capital,” Sumberg said.

By contrast, “10 years ago, we saw more outbound investment into Latin America than inbound investment into Miami,” Sumberg said.

Public-private partnerships will form to ease South Florida’s infrastructure woes and to create transit hubs. “We have aging infrastructure: roads, bridges and sewers,” Sumberg said.

“This is both an emerging practice and an increase in existing practice,” Sumberg said. “For new legal business, financing structures are often unique and involve various public and private sources or revenue leveraged to fund construction operation and maintenance of transit-oriented development.”

Online crowd-sourcing and such partnerships will create new capital funding sources — again giving rise to new legal needs.

“Lots of clients are looking for sources of capital. A client says, ‘I need $100 million. What do I do?’ Our job is to be on top of these alternatives and SEC regulations. Today, all the rules are changing.”

While South Florida’s shifting business landscape is partly responsible for changes at local law firms, demand and supply also drive new practices. The number of Florida lawyers jumped 53.3 percent since 2005, with 74,260 statewide in 2015, compared to 48,450 in 2005, according to the American Bar Association.

At the same time, the number of jobs at law firms and companies decreased, especially during the Great Recession, when clients balked at high fees. Businesses hired more in-house attorneys, thus reducing legal budgets.

Technology also has played a role, with computers doing some of the research that once required legions of associates. And companies that previously hired large law firms have hired in-house lawyers.

“After 2009, everyone was asked to do more for less, and technology has made it possible to meet those demands,” said Robert Birrenko, University of Florida Levin College of Law’s assistant dean for career services.

“Every aspect of law is impacted by technology, which impacts how services are delivered. Everyone has felt the pressure,” Birrenko said.

Today, most Florida law school graduates seeking work at a firm are hired into offices of one to 10 lawyers, Birrenko said.

Here’s a look at a handful of the new legal lines developing across the region.

Legal boutiques

As big firms consolidate or merge and expand into giant Florida firms, mid-size firms often have contracted. Moving into the resulting gap are “boutique” firms whose sole mission is to allow clients to hire experienced trial lawyers without the added expense of using associate or entry-level attorneys.

One of those is Leon Cosgrove LLC in Coral Gables. Founded in 2013, the firm now has 15 attorneys — all experienced trial lawyers who can swoop in, argue a case in court and win it for maximum client value.

“Law firms are becoming more creative, with competitive billing arrangements such as fixed fees, capped fees and hybrid fees,” said founding partner Derek Leon, who describes his colleagues as trial-ready.

“Litigation boutiques are hiring top-flight, credentialed lawyers who are more nimble, more results-oriented. We are thriving. Our motto is ‘Don’t fear the rate. Fear the leverage.’”

In other words, he’s telling businesses that in the end they pay less and get better results by going with seasoned, experienced trial specialists.

“What we offer is more seasoned, top-flight lawyers and less of them. In most complex commercial cases, two to three lawyers can manage. We prepare the cases as if they’re going to trial and never assume that a case will settle.”

Plaintiffs the firm has represented include JPMorgan Chase, Costa Farms and HomeServe USA.

Said Cosgrove: “There may be too many lawyers but not too many good lawyers.”

Genuine or knock-off?

Koch has lost millions from bad wine investments that included purported vintages owned by U.S. President Thomas Jefferson from the late 1700s.

“The sweet spot for fraudsters seems to be $5,000 to $10,000 a bottle,” Koch said. “If the glass is fake, the label’s fake, the cork’s fake — there’s a high probability the wine is fake.’

Koch said he has only collected about $4.8 million in restitution — partly from a conviction by former federal prosecutor Jason Hernandez, who joined Miami’s Stearns Weaver Miller as shareholder in September 2015 to expand the firm’s private practice around fine collectibles. Hernandez, who grew up in Miami, also brings experience in commercial litigation and government investigations.

“Bill’s been a victim of two or three sources of counterfeit wine. He’s had an unusual bad run of luck,” said Hernandez, who helped prosecute Rudy Kurniawan, known as the world’s biggest wine counterfeiter in 2013, in New York.

Kurniawan mixed cheap wines, bottling the swill with fake labels from his California home. He was sentenced to 10 years in prison in 2014, ordered to forfeit $20 million and pay $28.4 million in restitution to victims.

Art Basel’s success, too, has brought “a broader collectibles base” to South Florida — and the possibility of fakes.

As a New York prosecutor, Hernandez won convictions in major art fraud cases, including one against dealer Glafira Rosales, who pleaded guilty in September 2013 to selling $80 million in fake modern abstract expressionist works through New York’s now-defunct M. Knoedler & Co. art gallery, a longtime institution. Rosales was released on a $2.5 million bond, and sentencing is pending extradition of two co-conspirators from Spain, Hernandez said.

Hernandez brings that expertise to the 40-year-old Stearns Weaver Miller’s existing full-service practice.

“Art has become a high-end investment. You need to make sure there’s a clear title, for example,” Hernandez said. “You also have to do research: Who is the person who is offering the collectible?”

Along with wine and art, Hernandez’s portfolio includes antique firearms, antique coins, fine jewelry and sports memorabilia — “anything of value that people like to collect.”

Networking at the bar

Throughout South Florida, family entertainment venues such as movie theaters, bowling alleys and grocery stores are enticing customers to linger longer with adult beverages.

At Greenspoon Marder’s alcohol beverage group practice, which was started in January 2015, lawyers Marbet Lewis and husband Robert focus on client service. A new in-house bar at their Brickell Avenue office lets clients socialize, host focus groups, do research and network with other clients.

“This is not what I thought I’d be doing when I went to law school,” Marbet Lewis said. “We thought, ‘how can we make this not just a working environment, but one that fosters collaboration?’”

Clients include Carmike Theaters, AmericanAirlines Arena, Buffalo Wild Wings, Canada-based Earl’s Restaurant, Fontainebleau Miami Beach and Ron Abuelo, a rum maker owned by Panama President Juan Carlos Varela’s family.

Singer Pitbull, a client of the firm, has his own brand of vodka and a Budweiser partnership.

The firm’s work covers specialized licenses to import and distribute alcohol in the United States, business permitting, land-use approvals, trade practice regulations and government lobbying.

There’s also growth in microbreweries, private label liquors and wine and handcrafted spirits.

Laws of fashion

As Miami Dade College prepares to open Miami Fashion Institute at its Wolfson campus with fashion design and merchandising degree programs this fall, designers are optimistic about South Florida’s fashion future.

Designer Naeem Khan is moving his production from New York and Asia to a facility on the Miami River. Rene Ruiz opened a Hialeah factory about three years ago and employs 55 workers. Style Mafia Miami, founded by blogger Simonett Pereira, has set up shop with a Wynwood showroom.

Danielle Garno, a Greenberg Traurig shareholder in Miami, is hoping to capitalize on the growing fashion sector by specializing in industry issues such as the Foreign Corrupt Practices Act (FCPA), trademark infringement, anti-counterfeiting, employment and general business litigation.

“Miami’s becoming more of a fashion city. It’s emerging. In the Design District, luxury brands have really taken root here,” Garno said.

Garno began working in the firm’s Los Angeles office in 2005 in its employment practice. A year later, her litigation work morphed into fashion litigation that included anti-counterfeiting, trademark infringement and intellectual property. Besides fashion, she currently does general and white-collar litigation.

“You want to make sure you’re protected. You want to control how your line is put out there,” Garno said. “Fashion is an industry with a lot of gifts, a lot of freebies that are being given. You need to make sure that’s not being a bribe.”

One client, swimwear designer Bianca Coletti, is known for European-inspired designs with classic silhouettes and small-cut bottoms, hand-cut and -sewn with fabrics from China, India and Vietnam.

Challenges remain. “Locally, it’s still hard for young designers to find manufacturers and the right fabric,” Garno said. “But the industry is starting to gain a strong foothold. We have a tremendous amount of young talent here and we want to keep them here.”

Garno earned a Fashion Law Institute “Fashion Law Bootcamp” certificate from New York’s Fordham Law School. She’s active in the Institute’s 80-member Fashion Group International Inc.’s South Florida chapter that includes Naples.

The foreign factor

Morgan Lewis partner Alison Tanchyk moved the base of her global anti-corruption practice from Philadelphia to Miami two years ago because of Latin America’s proximity and the Department of Justice’s tough focus on FCPA cases.

The DOJ, FBI and Securities and Exchange Commission are leading efforts to eradicate bribery payments to foreign government officials by U.S. companies.

“I wanted to be on the leading edge with our Fortune 500 clients expanding their operations in Latin America,” Tanchyk said. She counsels and trains companies about development, implementation, evaluation and anti-corruption compliance.

Although the FCPA was enacted nearly 40 years ago, Tanchyk said, the government recently has beefed up enforcement. “The Department of Justice is more aggressively prosecuting these cases. In some countries, corruption is part of doing business,” she said.

Criminal penalties for violations can run “in the hundreds of millions, but the cost of investigations are extremely high,” Tanchyk said.

As a result of SEC investigations in the mid-1970s, more than 400 U.S. companies admitted to paying more than $300 million in illegal bribes to foreign governments. Lockheed and Chiquita Brands were two examples of those companies.

In early April, DOJ announced a one-year pilot program to encourage U.S. companies to self-report bribery violations and give “extensive” cooperation in exchange for reduced penalties. The pilot program encourages voluntary disclosure, cooperation and remediation.

“Globally, there’s a need to focus on compliance, and in Florida, we have very aggressive U.S. attorney offices,” Tanchyk said. “I speak with clients often about how to mitigate risk.”

Data, data and cybersecurity

At Miami-based Akerman LLP, a new data law practice and data center for commercial business and entrepreneurs focuses on issues of electronic discovery and high-profile data breaches. It also helps clients with global records retention, privacy and security policies and incident responses.

If high-profile data breaches at eBay, Target and Anthem insurance aren’t evidence enough of today’s cyber risks, research firm Gartner predicts that 33 percent of Fortune 100 organizations will experience an “information crisis” by 2017. Juniper Research predicts the number of data breaches will cost $2.1 trillion globally by 2019 — almost four times the cost of breaches in 2015.

It’s no surprise that cybersecurity is a rapidly growing legal niche.

The firm’s new Akerman Data Law Center, developed for businesses with data security needs, leverages sophisticated turnkey technology to deliver what it calls “the next generation of legal services,” partner Martin Tully said.

Akerman projects that the center will reduce legal fees by more than 80 percent, compared to traditional hourly rates for data-law compliance.

Using the center launching in May, any interested commercial client can access how long employee, financial and public records need to be retained in various states, for example. A client also can type in a question and get answers about data breach compliance in multiple jurisdictions.

Forty-seven states have data privacy laws; only three — Alabama, New Mexico and South Dakota — do not.

“There’s no standard federal law with a data breach and the laws are changing constantly,” Tully said.

A partnership with Akerman Data Law lawyers, Thomson Reuters Legal Managed Services and Neota Logic allows client subscribers to query the system and get detailed information refreshed four times annually. Rates will vary according to needs.

The subscription includes access to the firm’s data-law attorneys for counseling on private data, security and information protection.

“It’s like what TurboTax did for the U.S. tax code,” Tully said.

“There’s a fear in my profession that the robots will take the jobs. We see it as leveraging the technology that we should be embracing.”

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