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Schulte Roth & Zabel has filed suit against its New York landlord, seeking at least $10 million, becoming the latest firm to dispute its office rent obligations during the pandemic, the American Lawyer reported. Schulte is seeking rent abatement from its landlord at 919 Third Ave., an SL Green property in Midtown. The case is similar to Simpson Thacher & Bartlett and Jenner & Block’s litigation this year against their landlords. The law firm disputes have continued to percolate in the legal industry, as the pandemic and shutdown orders have forced firms to operate remotely. But the landlord’s attorney at Fried, Frank, Harris, Shriver & Jacobson strongly disputes Schulte’s argument — along with the broader argument made by other firms. “While this lawsuit is legally without merit, the attempt by Schulte Roth & Zabel and other well-heeled, white-shoe firms to take advantage of the pandemic and not live up to their financial commitments at a time when the vast majority of New Yorkers continue to meet their obligations poses a very serious threat to New York City and its economy,” said Janice Mac Avoy, a Fried Frank partner. Schulte, represented by Foley & Lardner, is suing Metropolitan 919 3rd Avenue LLC, as the successor to 919 Third Ave. Associates in Manhattan Supreme Court. Schulte said it has had an office at 919 Third Ave. since 2000. Schulte’s suit cites sections of the lease that point to “unavoidable delays” in occupying the space. Schulte argues the “lease is clear” that where the firm has been forced to vacate its offices “by laws or government mandates” in response to a national emergency for more than 15 business days, the firm is entitled to rent abatement while Schulte cannot occupy its offices “for the ordinary conduct of its business.”

As a growing number of law firms look to contract with third-party vendors to outsource business operations, a $128 million lawsuit filed by LeClairRyan’s bankruptcy trustee against UnitedLex makes it clear that the risks to both sides can be high when a firm is already on thin ice, the American Lawyer reported. LeClairRyan’s trustee alleged in a suit filed in Virginia bankruptcy court on Tuesday that the terms of the deal with UnitedLex, which resulted in the creation of a joint venture to handle support services, served only to push the cash-strapped firm “further into insolvency.” Now UnitedLex itself faces substantial liability for allegedly sucking money out of the firm, at the expense of LeClairRyan’s other creditors. In June 2018, the two entities unveiled the launch of ULX Partners LLC, a joint venture that was intended to allow LeClairRyan and other law firms to outsource back-office operations and receive equity stakes in the new company. “If we don’t reach 10,000 employees in the next five years, then I’m not doing something right,” UnitedLex founder Dan Reed told The American Lawyer at the time. “Some people would view that as heretical, but it’s not.” But little over a year later, in August 2019, LeClairRyan announced its dissolution, following months of partner defections that had begun before the UnitedLex deal. The firm filed for bankruptcy five weeks later. And as its fate became increasingly apparent over the course of that summer, UnitedLex had nothing to say about the status of ULX.