Our weekly Leading the Way Q&A series features Podhurst Orseck partners Steven Marks and Peter Prieto.
Editor’s note: Welcome to “Leading the Way,” a weekly Q&A with South Florida law firm leaders about how they’re navigating novel challenges presented by the COVID-19 pandemic. Thanks for reading! We’d love your feedback, so please send thoughts and tips to Dan Roe at droe@alm.com.
Podhurst Orseck partners Steven Marks and Peter Prieto have maintained their firm’s status as an elite trial boutique through a string of major lawsuits. In the past few years, Prieto obtained more than $340 million for customers of Volkswagen and Ford who bought cars with faulty Takata air bags, and Marks won $866 million in damages for the families of 43 Brazilian soccer players killed in a 2016 plane crash. Those victories garnered press and the attention of potential clients. They also made the litigators quite a lot of money: A Miami federal judge awarded Prieto $75 million in attorneys’ fees in the Ford multidistrict litigation.
The past two years have been markedly different for the trial lawyers as COVID-19 shut down jury trials and took away the leverage they had over defendants. There’s a big payday on the other side of the firm’s significant inventory, said Prieto, but they’ve had to make adjustments in the meantime.
Expenses took a haircut. Commercial litigation picked up. Hope sprung from declining infection rates last fall. Then omicron hit and jury trials paused again.
In an interview, Prieto and Marks discussed the changes they made to keep the storied trial firm profitable and ready to handle the heaps of lawsuits that await their day in court.
What are the biggest challenges you face as firm leaders going into 2021?
Marks: It was a challenging 2021, in particular, without the pressure of trial dates. We need a trial date to bring cases to a conclusion, through resolution or a trial verdict. Insurers are very much aware trials are not going to be available to litigants. It’s in their best interest to delay, and that has occurred.
On the other hand, we were very careful to focus on getting cases trial-ready so that once [trials] resume we’d be in a position to get trials heard as soon as possible in 2022.
The start of the year was a bit of a disappointment. Omicron asserted itself, positivity rates were high throughout the U.S., and we had to close our office for the month of January because unfortunately a lot of our people have gotten COVID. We thought it prudent and in the best interest of our staff and employees to work remotely through the end of January. Since vaccine rates are very high in our office, we feel comfortable reopening in February, and we have high hopes that courts will resume with in-person trials in early 2022.
How did you weather the inability to bring cases to a conclusion financially?
Marks: We’ve been fortunate over the years and we’ve been very successful, so we were able to endure a year of difficulty without any real financial burdens. I think one of the beneficial things we’ve learned from COVID is that we can effectively manage and handle cases and move them forward through technology, which does not require in-person depositions or court hearings. So from that standpoint, costs have been drastically reduced, especially since we had so much international travel in our aviation business. I used to travel several times a month to Europe or London or South America or Russia or Asia; those expenses have now been eliminated.
Prieto: We’ve been efficient and smart and, by necessity, our costs have gone way down. Not just airfare: hotels, dinner or lunch at a restaurant. I think for our firm and for most firms those expenses are way down.
Marks: One other thing I’ll add is we had a very difficult time getting mediations scheduled and having real success because we were lacking the pressure. In the latter part of 2021, because I think most insurers and defense lawyers realized that trials were likely to start in the spring, and our cases were prepared and trial-ready, they began engaging in meaningful settlement discussions. For example, just in January and February, I have six mediations postured in a way that hopefully will lead to some resolution. That didn’t occur in 2021.
How has the lack of case resolutions impacted your contingency fees?
Marks: Certainly my fees have been deferred, Peter’s practice is the same way. He needs trials, mass tort settlements occur when there’s leverage. Those fees only occur after a common benefit is obtained. I think both of our practices fall in the same category, so yes, I’m hopeful that this year and next year will make up for last year.
Prieto: I think what’s very positive for our firm is the inventory that we have built up over the last three to five years. Once that inventory gets closed or resolved, we are going to have a couple of banner years in the very near future.
Are you budgeting for any investments in the firm for 2022?
Marks: Fortunately, we had just upgraded our technology in 2020, so it was easy to weather the storm in 2021 and beyond. I don’t think we’re likely to hire many people because generally, we have been a firm that is very selective and limited in the number of hires. We always believe in quality over quantity. I’d be surprised if we hired more than one or two attorneys in the coming years. If it’s the right person, we’re always open to the right kind of hire.
Prieto: Once COVID becomes a reality of life or subsides, I really do think at some point everybody needs to reassess how much space a law firm needs given that some employees are part time or full time and may want or demand to work remotely. It’ll be interesting because if you visit some of the larger cities, whether in Miami or New York, in places where you have large organizations with banks and law firms, you see a lot less traffic than you would otherwise pre-pandemic. In terms of technology, I think most firms, including ours, are pretty advanced, but space will be an interesting issue firms are going to have to address.
What does that look like for your firm?
Marks: I don’t see us downsizing at all.
Why not?
Marks: We have always strived to have a family environment. We pride ourselves on having close relationships with everybody in the office, not a hierarchy between partners, associates, and staff. In order to keep that core value of the Podhurst tradition, you need to have personal interaction. You can’t do it remotely—that’s from a personal standpoint, not so much the profession. That’s been the saddest part of this pandemic, at least to me.
What type of training do your associates need that benefited you as a young attorney?
Prieto: That’s a good question. At least initially, it was a little sad that the associates coming into our firm, or any firm, didn’t have the normal experience of seeing and meeting people right away. I think that tended to sort of go away last year before the surge of omicron, but the younger lawyers are much better at technology and adapting to technology than the more-senior lawyers. I think they’ve adapted very, very well. I really don’t think it’s impacted them as much.
Marks: What’s going to be interesting is: The kids who have had a year or two of remote learning going back into the workforce or getting into the workforce in the future are going to want a more hybrid type of work environment because they’ve lived it. So that might be an interesting angle for you: What’s going to happen to those second- and third-year law students when they come out? Are they going to be looking, like so many workers in the general workforce, for remote opportunities?
Would you offer that flexibility?
Marks: We are trying to get back to the old normal where we have personal interaction. We are an office environment for a lot of tangible and intangible reasons.
Prieto: We have been, however, pretty flexible with lawyers and staff. For example, if they need to work remotely for whatever reason—a family member is not feeling well, an A/C repairman needs to come—we’ve been very flexible with employees, including staff, in those kinds of circumstances. I think we want everybody back, as Steve knows, because it does breed a lot of camaraderie and enhances our firm’s culture, but we will remain flexible when someone wants to work remote.
Marks: We had two attorneys, one temporarily in New York for over a year and another who, because of family reasons, wanted to return to Washington, D.C. We were able to adjust to that situation. We are very flexible when it comes to family situations where people have young children and need flexible hours. We can accommodate them if they work from home for an extended period of time; we’re not rigid in any way.
What’s the most important lesson you’ve learned as firm leaders during the pandemic?
Prieto: To me, the most valuable thing has been how we have easily adapted because of COVID, and I for one have been incredibly surprised by how loyal, supportive, and adaptive our staff has been.
Marks: Peter absolutely characterized it best. We have built goodwill within our entire firm, we have long-term employees that have been with us for decades. We don’t have any type of turnover when it comes to staff and other personnel. It has really been a family effort to struggle together in these difficult times as we have enjoyed decades of very good times.
Copyright 2022. ALM Media Properties, LLC. All rights reserved.
