California Lawyers Find a Jackpot Betting on Nevada's Hot Market
January 28, 1997 - Silver Stater - "Nevada is a mirror image of California," said
Newport Beach attorney Thomas Miller, who opened an office in Las Vegas
four months ago and is preparing to take the Nevada bar exam.
San Diego - Like a lot of other Nevadans who want to become attorneys,
Ernest Brown went to law school in California and remained there to practice.
But in the past few years, Brown has been spending considerably more time
in his native state.
In 1987, his Irvine-based firm, Brown, Pistone, Hurley & Van Vlear,
represented engineering and construction clients in a case arising from
a major explosion at a Southern California Edison power plant in Laughlin,
Nev. Since then the firm has handled numerous construction cases, including
one involving expansion of the airport in Reno, which happens to be Brown's
hometown.
Brown, who plans to take the Nevada bar exam in July, said it's "quite
likely" his firm will open an office in either Reno or Las Vegas by
the end of this year.
"In the last five years, there's been explosive growth in Nevada,"
he said. "We've been working with home buildersand other clients who
have an interest in Nevada."
Brown is hardly the only California attorney who's benefitting professionally
from Nevada's rapid growth. According to Nevada bar officials, the number
of Golden State lawyers who passed the Silver State's bar exam quadrupled
during the past five years - from 26 in 1991 to 105 in 1996.
Put another way, 9 percent of the 286 people who passed the Nevada exam
five years ago came from California. Last year, Californians accounted for
nearly one-third of the 336 successful bar applicants. The growing numbers
aside, there have long been links connecting the practice of law in the
two neighboring states.
For starters, many would-be lawyers from Nevada have been educated at
California law schools, since Nevada does not have its own law school. According
to Nevada bar figures, 120 out of 536 applicants for last year's exam earned
their degrees from seven California law schools, notably McGeorge and California
Western.
Geography also plays a role in fostering close legal ties between the
states. Given the physical proximity, it's hardly unusual for an attorney
from San Francisco, Sacramento or the Lake Tahoe area to handle a case in
Reno or Las Vegas.
For example, Harold McElhinny, who heads the litigation department at
San Francisco's Morrison & Foerster, said his firm has a "regular
stream of cases we do in Nevada," including criminal defense and other
matters involving public agencies in Clark County, where Las Vegas is located.
In contrast with other firms, however, Morrison & Foerster's Nevada
case load has remained relatively steady. McElhinny said his firm has no
plans to open a Nevada office.
But other California firms not a significant increase in Nevada-based
businesses.
"With increased population growth, there's an increase in all kinds
of disputes in Nevada," said Cynthia Larsen, the partner in charge
of Orrick, Herrington & Sutcliffe's Sacramento office. "Large companies
are looking to hire California firms in proximity to Nevada. Our clients
are asking us to do Nevada business if they are doing business in Nevada."
A similar need to represent clients in Nevada-related labor and employment
cases spurred Littler, Mendelson, Fastiff, Tichy & Mathiason to open
an office in Reno four years ago. The firm added a Las Vegas outpost las
July. The Nevada offices are staffed by five attorneys. (Because of a Nevada
law that requires name partners to be licensed in thestate, Littler Mendelson
is known there as the Law Offices of Hicks & Walt.)
Patrick Hicks, who serves as managing partner of the Nevada offices,
said Littler Mendelson opened the two branches because "more and more
companies are moving to both places, particularly Las Vegas. There's a need
for labor and employment offices, and no one else is doing it."
Little Mendelson has landed several Nevada-based clients, including Sierra
Pacific Power Co. and the Peppermill Hotel and Casino.
"The business community appreciates that the nation's largest labor
and employment firm has just opened offices here," said Hicks.
Littler Mendelson, however, is the exception to the rule. Most large
San Francisco-based firms have no intention, at least at the moment, of
setting up branch offices in Nevada.
"If you are a general firm, a big firm, trying to open an office
in Las Vegas will not be attractive," said Hicks. "Plenty of [Nevada]
law firms can do the work. We're coming here with a very narrow specialty."
Similarly, smaller specialty firms from California are also finding a
niche, particularly in Las Vegas, where the area's astronomical growth has
attracted a growing number of Southern California lawyers involved in construction
defect litigation.
According to U.S. Housing Market Reports, a quarterly compilation of
construction statistics, an average of 26 new housing units were built for
each 1,000 people in the Las Vegas area during the second quarter of 1996,
making Las Vegas No.2 - the Phoenix area ranks first - on the "Market
Hotness Index."
During the first half of last year, construction of multifamily residences.in
Las Vegas increased 27 percent over the same period in 1995.
The Las Vegas construction boom has touched off a corresponding increase
in the volume of construction defect cases, and with them the number of
California lawyerscrossing the border to handle the litigation.
One of the more publicized transplants is Thomas Miller, a Newport Beach
attorney and the author of two legal textbooks on construction defect matters.
Miller opened an office in Las Vegas four months ago to handle cases
around Clark County. "Our case load picked up within the last 12 months,"
said Miller, who boasts that he has recovered more than $150 million for
plaintiffs in California construction defect actions. "We're getting
more repeated calls from angry consumers."
Now, Miller is preparing to take the Nevada bar exam in July and anticipates
that his Las Vegas offices, which now employs a full-time attorney, will
double or triple its staff within the next six months.
"Nevada is a mirror image of California," said Miller. "It's
just uncanny how the developers are making the same mistakes that were made
in the building boom in the 1980s in California. We often see the same builders
from California in Nevada, and there are less stringent building codes and
requirements than in California."
Miller has garnered his Nevada business via word of mouth and public
relations efforts. For example, his firm has produced articles and conducted
seminars about construction defect law for the Community Association Institute,
an organization of property managers, homeowner associations and others
involved in the construction industry.
Miller acknowledges that some Nevada lawyers have been heard to grouse
about those they consider California carpetbaggers. But for the most part,
he said, the Nevada bar has put out the welcome mat. "The attorneys
are saying 'Here's someone who can help raise the level of interest and
intelligence about these cases."
That's not what Jamie Chrisman, a Las Vegas attorney who represents developers
is saying. He and his firm are involved in 23 construction-related law suits,
all but one of which has a California connection.
His case load has quadrupled within the last two years, but he maintains
that the majority of the matters are "not genuine."
"There are some good claims. But I've noticed so many more marginal
claims, things that are not structural defects or do not have a large impact,"
he said. "There are little things, like cracked stucco. We've even
had cases alleging defective construction because the paint on the wood
trim was peeling. We're in a desert, for gosh sakes. The paint is exposed
to severe weather, sun and sand storms."
Chrisman has noticed a growing number of California lawyers staging seminars,
picnics and other activities to solicit business from homeowner groups in
and around Las Vegas.
"There was one with a big circus tent, a barbecue and a seminar
discussing how horrible the homes were in the development," he said.
Chrisman and other Nevada attorneys expressed concern that the influx of
California lawyers threatens the close-knit and generally amiable character
of the local bar.
"Compared with Los Angeles, most lawyers in Nevada know each other,"
said Brown. "In Reno, you know almost every attorney. Las Vegas is
bigger, but it's a very small legal community. There's a close, collegial
law practice."
Added Chrisman: "The Nevada atmosphere and attitude is far different,
more genteel and professional. With the California lawyers, everything is
more antagonistic."
Some Nevada attorneys and other residents are taking steps to repel the
California legal invasion and increase the number of home-grown lawyers.
After years of unsuccessful attempts to establish a law school, the University
of Nevada Board of Regents las year agreed to ask the state Legislature
to allocate funds for a law school at the Las Vegas campus.
The regents have already raised about $7 million in private funding for
a law school. If the Legislature appropriates additional funds, the law
school is expected to open in 1998.
(A private, non-ABA-accredited law school operated in Reno in the 1980s,
but it has been closed for almost a decade.)
"There's been significant demand, particularly in southern Nevada,
for a law school," said Tom Flagg, a university spokesman. "The
population has grown to more than a million people. A lot of Nevadans like
going to lawyers with an education based in Nevada law. Having a law school
in Las Vegas will be an advantage to the local community. It will establish
a law library, train law clerks and provide continuing education programs
for the state."
Of course, it will also enable natives like Brown to attend law school
and practice in their home state.
"I was born in Nevada," he said. "My father was born in
Nevada. I still consider myself a Nevadan that's just happened to spend
the majority of the last few year there. For me, practicing in Nevada is
like going home."
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