Law firms report frenetic activity as year begins

There’s a saying among lawyers, perhaps as a way to motivate them through law school or the brutal hours they work as a newbie: “There are two times when lawyers do well. They do good in good times and great in bad times.” 

Law firms in Northern Colorado seem to be reflecting that, even if it’s hard to tell now which is which. 

“Our practices are crazy busy,” said John Gaddis, a longtime partner of Lyons Gaddis, a law firm out of Longmont and Louisville. 

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Times are great in the area, with record-setting real estate, a bulletproof economy and businesses flocking to the entire Front Range region. But times are also bad, for first-time homebuyers, employers short on workers (aka almost everyone) and, of course, because of the pandemic. All of that is keeping attorneys hopping, Gaddis said. 

“There’s a LOT of pent-up activity that people want to engage in,” Gaddis said. “People have been waiting to get divorced, make transactions and acquisitions and figure out what will happen with the tax laws, and people just haven’t been able to do it until now.” 

Real estate, and all that comes with that, is keeping everyone busy, and that, naturally, means lawyers are busy as well. George Berg Jr., a founding partner with Berg Hill Greenleaf Ruscitti of Boulder, Denver, Cheyenne, Wyoming and Irvine, California, said real estate is the number-one activity in his firm. Lawyers typically help with development projects such as subdivisions and commercial and office properties as well as disagreements over them. The explosion in land, water and home prices also means others are hoping to cash in and retire. 

“The legal profession mirrors the economy,” Berg said. “We’re busier than we’ve ever been. Real estate supports the other growth areas, and anytime you have aggressive strategies by the players, you’re going to run into situations where problems arise that you didn’t anticipate, and that results in disputes.” 

And remember, real life keeps happening, such as disasters and fires, that affect the real estate market.

“Commercial and residential construction was already facing significant challenges with massive demand, increasing prices and supply chain struggles and labor shortages,” said Cameron Grant, a real estate attorney with Lyons Gaddis, “and then our region lost more than 1,000 homes in a single afternoon.”

The development crunch means the limited number of shares of Colorado-Big Thompson water are drying up, with cities owning 75% and shares creeping up to $65,000 in value each, pricing out what are supposed to be moderate housing subdivisions. That has cities and developers looking for alternate sources of water, such as Greeley’s massive aquifer Terry Ranch project near the Wyoming border. That raises questions, and questions mean lawyers, said Jeff Kahn, an attorney with 40 years of practicing water law at Lyons Gaddis. 

“There’s a Western saying: ‘Take my whiskey and take my wife, but don’t you dare touch my water,’” Kahn said. “The need for new sources of water means there are areas that haven’t had water exported before. There are new jurisdictions, new areas and new regulations that have made it difficult to move water out of counties.” 

The boom may not last forever, or even until the end of the year, said Michael Payne, a partner with Coen, Payton and Payne in Greeley, because of the anticipated rise in interest rates to curb inflation. 

“I expect a flurry of lending activity in the first half of 2022 while people try to take final advantage of historically low interest rates,” Payne said. “In the second half, when cheap money starts to dry up, I anticipate that we’ll start to see more loans become delinquent. That may result in some increased bankruptcy filings by the fourth quarter.” 

COVID-19 will continue to hit all sectors of business hard, from staffing to productivity to disputes over masks and vaccines. It should also lead to more mergers and acquisitions this year, Payne said. 

“The COVID years have given lots of people time to reassess their careers and goals,” he said. “Those who are flush with cash and who have decided to take some new risks will be in the market to take advantage of acquisitions made available by those who are struggling or who have decided they need a wholesale lifestyle change.” 

The pandemic, or perhaps the politics or the general mood of the country, seems to have stirred people up, said Jeffrey Rose, a litigation attorney with Lyons Gaddis. 

“The level of conflict in cases is substantially higher than I’ve ever seen,” Rose said “People aren’t pumping the brakes when they probably should be pumping the brakes. They’re spending $300,000 on attorney fees that might get you $100,000.”

The level of disputes remains the same, Rose said, but people want to take them much further, where five years ago they would have tried to work something out. 

“I think a lot of people just don’t have their usual outlets,” he said. “There’s a lot of pent-up frustrations. I’ve never seen this in my career.”