Proskauer Rose LLP

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Proskauer Rose LLP

1585 Broadway
New York, New York 10036
U.S.A.
Telephone: (212) 969-3000
Fax: (212) 969-2900
Web site: http://www.proskauer.com

Private Partnership
Founded: 1878 as Rose & Putzel
Employees: 1,100
Gross Billings: $250 million (2000 est.)
NAIC: 541110 Offices of Lawyers

Proskauer Rose LLP is among the largest American law firms and one of the top ten based in New York City, offering a wide variety of legal services to major clients throughout the United States and the world. Unlike some of New York’s elite firms, it cannot rely on traditional ties to old money or the big investment banks that are a source of fat fees. Instead, Proskauer Rose has grown and profited by serving corporations in such down-to-earth areas as labor and employment law. It also is one of the few major firms with a healthcare practice and is active in sports management, representing the interests of owners of professional sports franchises. The firm also has wide experience in such areas as corporate finance, mergers and acquisitions, real estate transactions, bankruptcy and reorganizations, taxation, litigation and dispute resolution, and intellectual property.

A Century of Law Practice: 1878–1978

William R. Rose, founder of the firm that became Proskauer Rose, was born in New York City in 1854 and was admitted to the bar in 1875. In 1878, he and his friend Gideon Putzel founded the firm of Rose & Putzel. Until 1908, the partners were largely engaged in a personal, family, and real estate practice catering to Jewish families. Clients included businessmen engaged in such fields as textiles, breweries and distilleries, and cigars and cigarettes. Probably the most important early client was Henry Siegel, who established the large Siegel- Cooper department store at 620 Sixth Avenue in Manhattan.

Putzel died in 1907 and was succeeded as partner by Benjamin Paskusz, who had joined the firm in 1898. After he dropped the ’ ’z’ ’ from his name, the firm became Rose & Paskus. Rose’s son Alfred L. Rose joined the firm in 1911, when it had four other lawyers besides the partners. Rose & Paskus was general counsel to Gimbel Brothers, proprietors of the Herald Square alternative to Macy’s department store, and to members of the Gimbel family. It also represented such noted theatrical producers of the era as Abraham Erlanger and Charles Frohman. The adoption of the federal income tax in 1913 gave Rose & Paskus a new line of business in which Paskus excelled. By 1915, the firm had clients in all major U.S. cities and also in a number of European cities. May Department Stores Co. became a regular client in 1920.

By 1923, both partners of Rose & Paskus were deteriorating in health. Rose’s son, who became a partner in 1919, helped pick up the slack and recruited a close friend, Norman Goetz, who joined the firm as a partner in 1925. In-house lawyers Lawrence Coit, Sylvan Gotschal, and Walter Mendelsohn were also made partners in 1926. The younger Rose became a specialist in real estate, corporate, and probate law. Mendelsohn, who died in 1995 at the age of 98, was cited in his New York Times obituary as “a driving force in virtually every facet of the firm’s growth. A trust, estates and corporations specialist, he was credited with everything from creating the firm’s structure of departments in the 1920s to establishing branch offices in the 1970s.”

In 1930, a much more public figure, Joseph M. Proskauer, joined the firm, which now became Proskauer, Rose & Paskus. A Democratic party stalwart and friend of former governor Al Smith, Proskauer was a state appeals-court judge before retiring from the bench to resume the practice of law. Active in civic and charitable organizations (and later in raising funds for the new state of Israel), Proskauer presumably recruited clients from his large roster of acquaintances. An experienced trial lawyer, he represented in court such large firms as Bethlehem Steel Co., Cities Services Co., National City Bank, Loew’s Inc., Radio Corporation of America, Union Carbide & Carbon Co., and Universal Pictures. He defended banks and stockbrokers in several cases involving their liabilities and Warner Brothers Pictures Corp. and other companies against shareholder suits. He also served as counsel to public utilities that were opposing government actions deemed to unfavorably affect their interests. In addition, Proskauer successfully represented, on appeal, the aunt of Gloria Vanderbilt, who won custody of her niece from the girl’s mother in a celebrity case of the 1930s.

The firm was renamed Proskauer, Rose, Goetz & Mendelsohn in 1942. Proskauer died in 1971, Goetz in 1972, and Rose in 1981. Proskauer, Rose, Goetz & Mendelsohn gained a new partner in 1954, when George M. Shapiro, counsel to Governor Thomas E. Dewey, left government service. Shapiro had played an important role in drafting such significant legislation as the establishment of the state’s university system, the New York City Transit Authority, and the Waterfront Commission. Charles D. Breitel was Shapiro’s original boss in Albany. After serving as Dewey’s counsel, he became chief judge of New York and, in 1978, facing mandatory retirement at the age of 70, also joined Proskauer, Rose, Goetz & Mendelsohn. In the same year a federal judge, Marvin E. Franklen, rejoined the firm as a managing partner.

Expansion in the 1980s

Proskauer, Rose, Goetz & Mendelsohn opened a Los Angeles office in 1979, and by 1988 this office was staffed with 30 lawyers. By 1989, there was also a San Francisco office. In 1988, the firm recruited Arnold Burns, second-in-command at the U.S. Department of Justice, to head its Washington office. This office doubled in size within a year. In New York, Proskauser Rose Goetz & Mendelsohn (the commas appear to have been dropped by then) hired 15 lawyers in 1987 from Schwartz Klink & Schreiber, a firm which was dissolved. Nine of these lawyers were in litigation; the others were in corporate, securities, tax, and real estate law. At least seven Botein Hays & Sklar lawyers joined the firm when their own firm closed its doors at the end of 1989 because of a loss of business during the recession. In 1990, Proskauer Rose Goetz & Mendelsohn affiliated itself with a Paris-based firm, Dubarry, Gaston-Dreyfus, Leveque, Le Douarin, Servan-Schreiber, so that each could represent the other’s foreign clients in court. Proskauer Rose had now grown to about 400 lawyers, compared to about 250 in 1987.

One of the clients of Proskauer Rose Goetz & Mendelsohn was the National Basketball Association. David J. Stern, a rising star in the firm who in 1974—at the age of 32—became its youngest partner ever, helped arrange the 1976 merger with the American Basketball Association that put an end to the rivalry between the established professional league and its feisty, but undercapitalized, rival. Stern left the firm to join the NBA in 1978 and became its commissioner in 1984. Gary Bettman, also a Proskauer Rose Goetz & Mendelsohn lawyer, joined the NBA as Stern’s assistant in 1981 and became the first commissioner of the National Hockey League in 1993. Randy Levine, another of the firm’s lawyers, was major league baseball’s chief negotiator for the five-year agreement with the players’ union signed in 1996. Another Proskauer Rose client was Madison Square Garden, the venue for many New York sporting events. Proskauer Rose was credited by some observers with saving the 1998–99 NBA season in hard bargaining with the players. In 2000, the firm scored another success when its client Robert Wood Johnson IV made a successful bid to purchase the New York Jets of the National Football League.

Proskauer Rose Goetz & Mendelsohn’s presence in sports management was only one facet of its prominence in labor and employment practice, “an area of law,” according to Matthew Goldstein of Crain’s New York Business, ’ ’that many of Manhattan’s largest firms have historically considered too grubby.” Its clients in this field were solidly in management’s corner. ’ ’We are on the opposite side of almost everything,” a founding partner of a pro-union law firm active in labor and employment practice told Goldstein. In 1991, Proskauer Rose, Goetz & Mendelsohn entered another “grubby” field when it brought in Ronald Storette and Lowell Gettman to head a new practice in immigration and naturalization law.

Proskauer Rose in the 1990s

Proskauer Rose Goetz & Mendelsohn moved from its Park Avenue headquarters in 1990 to a new 43-story office building at 1585 Broadway, between West 47th and 48th streets. This made the firm a pioneer in the still raunchy Times Square area, but its options were limited because it wanted a lot of space with the ability to accommodate state-of-the-art wiring and computer fixtures. Taking a 20-year lease, the firm occupied 11 stories and 365,000 square feet of the building but found itself the sole tenant as recession put a crimp on business activity in the city and drove the building’s developer into bankruptcy. Citing such conditions as an incomplete facade, unfinished paving, unreliable elevators, and unwashed windows, the firm began withholding rent in the fall of 1991. For a time it took over the building maintenance, but it was able to yield that role after Morgan Stanley Group, Inc. bought the building. Morgan Stanley made the building its worldwide headquarters in 1995 but remained its only other tenant, although by 2000 the Times Square area had attracted many other legal, financial, and information services firms. Proskauer Rose Goetz & Mendelsohn opened branch offices in Paris and Boca Raton, Florida, during the mid-1990s. However, it closed its 16-lawyer San Francisco office in 1995.

Key Dates:

1878:: William R. Rose and Gideon Putzel found the firm of Rose & Putzel.
1930:: Judge Joseph M. Proskauer becomes a partner in the firm.
1976:: Partner David J. Stern helps arrange the merger of two pro basketball leagues.
1988:: Justice Department official Arnold Burns becomes head of the Washington office.
1990:: The firm moves to new headquarters near Times Square.
2001:: Proskauer Rose ranks eighth in size among New York-area law firms.

When another of the city’s leading law firms, Shea & Gould, broke up in early 1994, Proskauer, Rose, Goetz & Mendelsohn added 20 of the firm’s lawyers. Five of them joined as partners: Shea & Gould corporate department head Arnold S. Jacobs, former litigation head Leon Gold, real estate specialist Lawrence J. Lipson, corporate lawyer Allen R. Williams, and litigator Richard M. Goldstein. They and the other 15 were said to have brought substantial business with them. Lipson, who became co-chair of the firm’s real estate practice, reportedly brought in $6 million worth of fees in 1997 alone. In 1995, John Gross, formerly head of insurance litigation practice for Anderson Kill & Olick, joined the firm to assume its practice in that field. He brought four associates with him.

The firm, which became simply Proskauer Rose in 1997, had close ties to New York City Mayor Rudolph Giuliani in the 1990s. Gross and Burns were friends of Giuliani dating back from his tenure as a federal prosecutor in the 1980s. Gross was treasurer of the mayor’s campaign committee in 1989, 1993, and 1997. Levine became a deputy mayor in his administration, and Proskauer Rose partner Saul Cohen was one of his leading fundraisers and became president of the Rudolph Giuliani Center for Urban Affairs when he left office at the end of 2001. The firm was outside counsel to the city’s office of labor relations, a position that dated back to the administration of Mayor Edward Koch (1977–89).

Proskauer Rose established a new-media practice, called iPractice, and in 1999 decided to cut its normal $450-an-hour fee for new-media and Internet policy. It expressed a willingness to take stock in a company instead of fees, an unprecedented action for the firm. “We have targeted this particular industry because of the potential it has for our corporation practice,” Alan Jaffe, Proskauer Rose’s chairman, told Goldstein, “and because we feel it is an industry that is indigenous to New York City.” Proskauer Rose’s clients in this field included two local Internet companies, 24/7 Media Inc. and iTurf Inc. “I know some of our clients we are doing work for are not going to make it,” Arnold Levine, the chairman of iPractice, told Goldstein. “But we’re hoping that there will be clients whose success more than outweighs those that don’t make it.”

Proskauer Rose also was expanding in neighboring New Jersey. In 1998, the firm had only three lawyers working in the state, housed in a small office in Clifton since 1989. By late 1999, there were 15 lawyers doing business from a brand new office building in downtown Newark. Earlier in the year, Proskauer Rose had added a group of eight labor lawyers from a New Jersey firm, including one who brought with him Prudential Insurance Co. of America, a major new client for the firm.

Proskauer Rose was ranked eighth among New York-area law firms in 2001, according to Crain’s New York Business, with 457 lawyers, of whom 116 were partners. Unlike most of these firms, it had no banking and commerce practice, but also unlike most of them, it had a healthcare practice, with 17 attorneys. The firm had only nine female and minority partners in 1997, ranking 55th among 77 national firms in a survey on working conditions for women. The firm was employing, in early 2002, 550 lawyers in Boca Raton, Los Angeles, Newark, Paris, and Washington. Its clients included companies in many industries, including chemicals, entertainment, financial services, healthcare, hospitality, information technology, insurance, internet, manufacturing, media and communications, pharmaceuticals, real estate investment, sports, and transportation.

Principal Competitors

Cravath, Swane & Moore; Davis Polk & Wardwell; Paul, Weiss, Rifkind,Wharton & Garrison; Shearman & Sterling; Simpson, Thacher and Bartlett; Skadden Arps, Slate, Meagher & Flom; Sullivan & Cromwell; Weil Gotschal and Manges.