December 8, 2020
Today we are speaking with Laura Drossman, an experienced real estate and business lawyer from San Francisco.
So you were recently appointed to the Executive Committee of the Real Property Law Section of the California Lawyers Association. What are you looking forward to the most in this role?
Continuing legal education is crucial to effective counseling in California. As a solo practitioner, I have kept myself informed by writing articles and presenting MCLE seminars with a practical bent. As a Committee member, I’m hoping to encourage more attorneys to share their knowledge and do the same.
Can you please tell us about your law practice? What areas of law do you practice? What sorts of clients do you represent?
My practice focuses on (i) commercial leasing, (ii) real property transactions and (iii) small business transactional work. My leasing clientele is largely comprised of startups, emerging growth companies and SMBs, while my business law clientele are more mom-and-pop. I also work on residential sales, sometimes as an attorney, other times as a broker. Having some variety in deal flow and a diverse clientele affords me the opportunity to flex different practice muscles and keeps me sharp and engaged.
In what ways has commercial leasing been impacted by COVID-19 in the Bay Area? What challenges are you seeing in this area of the law, for tenants and landlords? What opportunities do you see?
It’s a hot mess. The market turned from fire to ice, and is only now starting to thaw. Remote and flex workplace trends have been accelerated, causing confusion as to the nature and timeline for return of demand for space. The subleasing market is flooded and there are still very few transactions at play, so market rates are challenging to compute.
Tenant and landlord relations are at a low. Landlords have largely limited rent relief to tenants suffering substantial losses, mainly in the retail sector. Even then, usually the relief comes in the form of a deferral, not an abatement. Many office tenants were fortunate in their ability to seamlessly pivot to remote operations, but they are frustrated they are forced to pay record high rents for space they are not using, and by landlords’ refusal to share in the losses.
On the retail side of things, the challenges are even more dire. Retailers and restauranteurs in the Bay Area were already operating on razor-thin margins prior to COVID-19, many of them personally liable for lease obligations. Between extended shelter in place orders, city folk fleeing to the burbs and deferred rent piling up month after month, many business owners can see it no longer makes economic sense to continue operating. But if they guaranteed the lease personally, they are indentured to their landlords and so may have no choice. Some landlords are trying to help, but others simply lack empathy, as they view property as a revenue stream, while their tenants are emotionally attached to the businesses they have spent their lives creating.
Workouts abound but new deal flow is still slow, as both sides try and anticipate when and where the market will hit bottom, and what demand will look like on the other side. There are ample opportunities to come for office and retail tenants looking to get cheap, turnkey space.
What has been the most challenging part of practicing law through the covid-19 pandemic?
I do not have easy or appealing solutions to offer tenants seeking relief or exit from their leases. Rather, I frequently bear bad news – that the lease and the law are stacked against them, and they are still obligated to pay rent.
But the year was also highly engaging. Non-stop strategic advisory calls replaced deal flow. Commercial leasing was became center stage, providing opportunities to better educate clients on contract mechanics. I talked about Force Majeure 5,000 times, and studied what I then considered obscure legal theories like frustration of purpose. I bonded with my leasing colleagues on biweekly meetings where we share information to gain collective understanding of what the “new market” looks like.
It appears you lived in New York for some time and are licensed to practice law in California and New York. Can you tell us more about that? How and when did you transition from New York to California?
I grew up in New Jersey, went to NYU for undergrad, and returned to practice law after Tulane Law School and a Bankruptcy Court clerkship in New Orleans. I grew my sea legs as a lawyer in the city, but life in New Orleans admittedly softened me up to appreciate a slower paced life, and got me curious about life beyond the Tri-State Area. I actually practiced in Denver at Kutak Rock for three years until moving to San Francisco, somewhat on a whim.
Practicing in both states is great and it has proven quite useful. Not infrequently clients will start in one city, and then need assistance with launching in the other, so I can advise them on both deals. Also, negotiating with old school New York lawyers feels almost familial to a displaced East Coaster like me.
If you could go back five years, what advice would you give your younger self?
Drop the doubt. I had a serious case of imposter syndrome for a while but at some point you have to step back and celebrate your accomplishments.
What made you want to choose law as a career?
I was studying film and television writing at NYU, and had a bunch of seemingly random jobs that lead me to law school. I worked as an auxiliary police officer for the NYPD (largely to use as the base for a comedic screenplay), an assistant to a handwriting identification expert (more on that below), and a personal assistant for a crime writer and journalist. When I went to law school, I was convinced I’d either work in law enforcement, as a TV exec or write for Law & Order.
What other jobs did you had prior to becoming an attorney? Which of these jobs was the most interesting? Why?
In high school I worked for my parents selling ladies undergarments at their retail store in New Jersey. Selling underwear is bound to have its funny moments (surely part of what led me to film school), but my parents were quite astute – underwear is recession-proof as they come.
It appears one of your first jobs while in college was working as a Handwriting Identification Assistant, helping to identify fraudulent handwriting? That sounds very interesting. Can you tell us more about that job?
Ruth Brayer is a pre-eminent questioned document examiner that provides forensic analysis and expert witness testimony in fraud cases. She also is highly skilled in graphology, so knew we would get along great – she hired me based on a handwritten cover letter. As her assistant, I helped her create evidentiary reports and edited parts of her guidebook to questioned document examination practice. Ruth is still at the top of her game, and has sharp instincts for attracting business and building relationships. She showed me that a business of one can be just as professional as a larger operation.
What part of your law practice excites you the most?
On one hand, I really enjoy exercising soft skills – talking through difficult issues with clients to help them identify their goals and strategize to find solutions. That said, I really do love running fast and furious deals – my good friend and former law partner admit, we’re addicted to docs!
What are your hobbies outside of practicing law?
This past year I’ve been remodeling an old Eichler home in Lucas Valley, which has helped keep the creativity flowing while sheltering in place.
What is your favorite trip/vacation you have taken and why?
Japan, 2018. I could not get enough of the stunning natural beauty, top-notch design aesthetic, unbeatable food, and endless karaoke.
Interview by Shawn Dhillon, Esq. – e-News Editor