Pennsylvania/New Jersey - Law Firms Cozen O'Connor: Building On A Successful Philadelphia Base

Friday, July 1, 2005 - 01:00

Editor: Is rapid expansion unique to your firm or is it an indicator of a trend where other Philadelphia firms are becoming more nationally focused?

O'Connor: I think it is really both. We have expanded in cities around America and into Toronto because our clients wanted us to. We had existing cases in those areas and when we moved into those areas with offices, that business grew and prospered. The New York midtown expansion was different. There we tried to grow our non-insurance practice area, which is doing very well in the Delaware Valley. Because New York City is one of the nation's great centers of commerce, we added about 40 commercial lawyers in midtown. That has been a home run for us.

The Toronto initiative has been an expansion of our national insurance practice, where we are one of the dominant players in America. Ultimately, we intend to take our model of insurance litigation, both from the subrogation and insurance defense perspectives, throughout Canada as we did in the U.S. As one of the most vibrant cities in Canada, Toronto was a natural starting point. We were fortunate to have a good, highly respected firm in Poss & Halfnight,who agreed to join us in this endeavor.

Our next move will be into the Southeast where we intend to take our insurance practice into Florida and Latin America. We will have an office in the Miami area before the year is out. We are not just trying to increase our numbers for the sake of numbers. We are seeking new profit centers for the firm. So far we have been successful.

Editor: I understand you have brought in an IP practice.

O'Connor: Several years ago we were able to attract some topflight talent in trademark, copyright and patent. We have more than 20 professionals in that area. They are doing extremely well with work that comes from California, Seattle, and throughout the middle-Atlantic region. It is a broad-based, successful practice, and we hope to grow that carefully with the right people. The addition of an IP practice means there is not one area of the law where we do not have competent professionals assisting our clients.

Editor: Some say that Philadelphia-based law firms have been challenged because they sit between New York and DC, two major centers of commerce. What are your thoughts on that?

O'Connor: I do not agree with this. Philadelphia is the fifth or sixth largest major metropolitan area in the United States. It is a major center of commerce in its own right.

In 1995, we had no lawyers doing non-insurance or commerce-related work. Today, we have close to 100 lawyers in the Delaware Valley doing work involving commerce and regulation.

Recent newspaper reports have indicated there is a major influx of jobs into this area. It is a tremendous area in which to do business and raise families. Although we have plans to expand elsewhere in the country, we are never going to abandon Philadelphia. We think there is enough work here for our firm to be successful. Philadelphia's central location allows us easy access to our other offices in the New York-Washington corridor.

Editor: We have seen a good business growth in Philadelphia in life sciences. How has that impacted law firms in Philadelphia?

O'Connor: Philadelphia was recently ranked the nation's third largest sector for the life sciences industry. That brings with it a huge need for great professional services that are provided by law firms in Philadelphia. Our patent and trademark group particularly specializes in life sciences. Most of our growth in the IP area stems from life science business. We also do a great deal of venture capital work through Michael Heller, chair of our Emerging Business & Venture Capital Department. He has also dealt in the life science industry. Philadelphia is probably the center for life sciences in the country. Given our expertise in the IP and the venture capital and private equity space, we see a strong role for Cozen O'Connor going forward.

Editor: What are some of the new opportunities for bringing new business into Philadelphia?

O'Connor: The city has been offering a lot of tax incentives, which have had both good and bad results. Philadelphia has to be careful to keep the great companies in this area who do not receive incentives. Cozen O'Connor is one of the largest employers in the city of Philadelphia with over 600 employees working in our Philadelphia office. We intend to remain in Philadelphia because it is a great city. But offering incentives just to some and not all can be a dangerous trend. Philadelphia needs a more efficient government that is friendlier to the businesses that seek to grow jobs and hire the people who make the Delaware Valley great. That is what we should be focusing our energies on.

Editor: How do you find the legal climate for business in Philadelphia?

O'Connor: If you compare the cost of services provided by Philadelphia law firms to businesses in the Delaware Valley to the rates charged by Washington or New York City firms, it is the best bargain in the country. Businesses that use Philadelphia-based law firms clearly understand that they get the best legal advice for a fair price. If I were a business and needed full service law firms, I would be looking to Philadelphia rather than New York.

Editor: How is the court system?

O'Connor: The court systems in the Delaware Valley are many and varied. The Philadelphia Common Pleas system is getting better. There is a business court in the city that has dedicated judges that understand business issues. The courts in nearby Delaware, Chester, Bucks, and Montgomery counties have good judges who currently do not face a tremendous backlog of cases. I think the federal system here in Philadelphia is as good as any in the country. James Giles, Chief Judge of the Eastern District of Pennsylvania, and Antony Sirrica, Chief Judge of the 3rd Circuit, are among the finest jurists in the U.S. Their excellence reaches down to the judges who serve with them.

Editor: Is there an emphasis on pro bono work at Cozen O'Connor?

O'Connor: When I became CEO, Cozen led the charge to reach out to those who cannot afford good legal services. We expect our 560 lawyers to each do a minimum of 50 hours per year. Recently I got involved in the defense of a murder case in Allentown. The accused is a man who could not afford counsel. These kinds of cases emphasize the need for pro bono efforts.

Editor: What legal challenges do you think businesses are concerned about nationally?

O'Connor: Businesses face increased costs from excessive legislation and regulation to correct perceived corporate ills, what I like to call the (New York Attorney General Eliot) Spitzer Syndrome. The Sarbanes-Oxley Act, although it has achieved some good results, in my judgment is overkill. It has added millions of dollars in legal expenses to the business community, which in my judgment is unnecessary. The same applies to Eliot Spitzer. He has corrected some terrible wrongs, but many innocent businesses that did not need regulation have had to spend a lot more on legal advice as the result of his efforts. We need to be more rational in our oversight of business activities so our companies can grow.

Editor: How do the challenges affect the role of corporate counsel?

O'Connor: Corporate counsel have to regulate their expense budgets, but at the same time maintain legal quality. Some should re-examine their existing relationships, as Morgan Stanley did because entrenchment may not be the best move for a corporation. As a law firm, we are constantly looking for new and better ways to do business, and companies should be doing the same to meet their legal needs.

Editor: What can in-house counsel do to get greater value from their outside counsel?

O'Connor: They have to understand the people at their law firms who are representing them. They need to make sure the philosophy of their law firm agrees with the corporate philosophy of the company. I have personal relationships with our clients. I feel free at any time to pick up the phone and discuss issues with clients to keep them fully in the loop. I also have face-to-face meetings with clients on a biweekly or monthly basis to keep them up to date on what our problems are and what good things are happening in the case at hand.

Editor: What should we expect from your firm in the future?

O'Connor: We are opportunistic, with a vision and a strategy. We will continue to look at great lawyers, great firms, and great practice groups from other law firms who agree with who we are and where we are going. In addition to a planned move into the Southeast, we are looking to grow in the Southwest as well. We also envision measured growth in Canada. In Europe, we are going to make sure our London office is on firmer footing. We only have a half dozen professionals working there, and we are looking at the possibility of adding staff. Eventually we will replicate what we are doing in New York because London is a center of commerce. We do see a globalization of law firm practice. The future probably includes more mergers between American and European firms, and we do not plan to be left out in the cold when that happens.

Editor: It seems as though you maintain quality control across the board.

O'Connor: We certainly do. My son is a member of a major firm in New York, and he gets little feedback on the quality of his work. They simply give you more work if you are good and less work if you are bad. At Cozen O'Connor, it is a constant learning process. When we see things that are not done the way a Cozen O'Connor lawyer should do it, the lawyer is told there is a better way and how to do it. When lawyers do great work, they are told they have done a superb legal job and their analysis was right on the money. We are constantly looking at the efficiency of the work product. If we see that too much time was spent on an issue, we do not charge the client for that work. We are constantly looking at what is best for the client and determining who in our firm can best deliver the product for that client.

Patrick J. O'Connor is President and CEO of Cozen O'Connor, a full-service firm with nearly 550 attorneys practicing in 23 offices. The firm has 21 offices located across the United States and international offices in London and Toronto. In 2004, Cozen O'Connor was the largest firm in the City of Philadelphia.

Please call the interviewee at (215) 665-2000 with questions about this interview.