Dear Clients, Colleagues, and Friends:
During these unprecedented, challenging times with the omicron variant of the coronavirus pandemic affecting our personal and business lives, we want to convey our prayers and good wishes for your health and well-being.
As this year ends, we wanted to share our thoughts on the state of the New York economy because our representation of Manhattan-based businesses gives us an insider’s view of the local economy.
The tight labor market has led to a sharp increase in wages and benefits across the labor spectrum. The labor market for technology executives and other professionals is fiercely competitive with substantial increases in compensation compared to before the advent of the coronavirus pandemic. As a result of the surge in the executive labor market, we have seen an increase in our corporate clients asking for counsel on executive retention strategies.
Just as executive employees have seen an increase in compensation, non-executive employees in the hospitality sector and construction industry in New York have seen substantial increases in wages after years of stagnant growth. Anecdotally, technology companies are having difficulty retaining C-suite talent as competitors poach talent; restaurants are having trouble staffing; and construction laborers have the pick of projects. Manhattan businesses are facing operational challenges in staffing and the obtainment of basic goods caused by the pandemic. A truly Manhattan-centric example of the supply chain disruption caused by the global production shutdown in the wake of the pandemic is the recent cream cheese shortage that sent local bagel shops and bakeries into a frenzy to locate what is generally a staple item.
The spike in employee compensation during a labor shortage is taking a toll on businesses in New York. The operational challenges posed by the pandemic is fostering business ingenuity, however. Franchise fast food restaurants have increasingly deployed computerized ordering systems to phase out the human element in taking customers’ orders to reduce staffing costs; small businesses dependent on delivery have rebelled against excessive delivery surcharges from third-parties’ platforms by marketing directly to customers and withdrawing from participation on delivery systems; and an array of businesses have transitioned workforces to remote work to save on rent and other fixed costs. Once the omicron surge subsides, New York businesses that have leaned out operations are poised to normalize business early in the New Year.
The legal industry continues to be affected by the pandemic. Nearly all our federal and state court cases are still conducted virtually. Our recent victory in federal court in the obtainment of a preliminary injunction to stop retaliation on behalf of a constituency of employees of a construction company is one of the few times in 2021 where the evidentiary hearing was conducted in the courthouse. The statistics on new case filings in two of our key practice areas of employment law litigation and bankruptcy litigation provide interesting data points to explain the economic phenomena of the pandemic.
While the filing of new lawsuits in the employment sector has normalized to pre-pandemic filings, the number of corporate bankruptcies has fallen to historic lows. The disruption of law firms’ operations in the immediate aftermath of the pandemic caused a downturn in filing of new cases based on non-payment of wages. Once law firms were able to function remotely post-pandemic, the number of employment cases steadily ticked up to about pre-pandemic levels as sidelined employees sought legal counsel about sudden layoffs. As for corporate bankruptcies, the flood of liquidity in the capital markets has stemmed the filing of corporate bankruptcies in 2021. These days, our corporate bankruptcy work deals with the representation of creditors in legacy bankruptcy cases filed pre-pandemic, the purchase of assets out of receivership, and out-of-court debt restructurings. The slowdown in bankruptcies has worked to the advantage of some of our smaller business clients as banks are now more eager to complete workouts because of delays in the state court foreclosures. Before year-end, we completed two favorable workouts that could not have been accomplished pre-pandemic.
The general feeling amongst our clients across a spectrum of business sectors is optimistic because, before the recent surge, business had started to normalize when office workers, tourists and tenants had started coming back. From our vantage point as a law firm in New York City, the general busyness of law firms is a strong indication that the local economy is rebounding and primed for a comeback in 2022. Hopefully, as the recent surge recedes, businesses will continue to experience a revitalization of business early in the New Year.
Given the challenges over the last year, we are especially pleased to share with you some highlights for Levin-Epstein & Associates, P.C. in 2021. Several of the firm’s cases were featured in the New York Law Journal’s column titled Decision of Interest, covering significant, precedent-setting legal cases, and the firm was featured in the New York Post for our work on behalf of a management defendant in an employment case.
Our commercial contingency practice successfully resolved several plaintiffs’-side cases that dealt with complex commercial issues. The favorable results obtained in these commercial contingency cases against top-tier law firms demonstrate our firm’s capability and wherewithal to support contingency cases. To the extent that you or any of your colleagues have cases where a contingency arrangement makes financial sense, please contact us to assess the potential for a mutually productive collaborative relationship regarding referral arrangements with participation fees for commercial contingency cases and plaintiffs’-side employment cases.
We want to thank you for contributing to our continued success. You know us, you know our experience, and you know the quality of our work. We would be most grateful to be retained in these areas, among others:
Litigation before trial or appellate courts or administrative bodies, especially matters involving real estate, partnership disputes, and creditors' rights;
- Litigation avoidance - the crucial effort to negotiate agreements to resolve disputes before they cross the threshold of the courthouse;
- Domestic and international arbitration and mediations;
- Bankruptcy litigation and creditors' rights work, including avoidance actions, preference actions, discharge and dischargeability actions;
- Employment litigation in all aspects of employment law, including issues involving restrictive covenants and trade secrets, wage-and-hour issues, Fair Labor Standards Act issues, and breach of contract issues;
- Business divorce litigation, including contested stock valuations, derivative actions and other disputes between owners of closely held business corporations;
- Counseling and strategic planning that defy easy categorization, requiring a deep understanding of the pertinent legal issues and also of the business (and sometimes personal) considerations that must be taken into account to reach a favorable outcome; and
- Representing investors, restauranteurs, restaurant management companies, and chefs in New York City's hospitality sector.
With heartfelt good wishes for a healthy, happy and productive year, we remain,