Wheels of justice drive mini-economy in Wilmington
Tim Pawliczek assembles sandwiches in the kitchen of Cavanaugh’s, the Market Street lunch restaurant he’s owned for 24 years. He hurriedly fills orders for the eat-in crowd and neatly packages the varied orders that will be ferried out to one of the 90 different law firms in a 10-block area.
Pawliczek said he goes through more than 500 pounds of fresh deli meat every week; the legal community accounts for roughly 70 percent of his business.
Cavanaugh’s is just one of many Wilmington-based businesses dependent on a vibrant legal district to drive a mini-economy. From picking up dry cleaning or coffee, to shopping for work-wear items from entreDonovan, hundreds of legal professionals financially infuse the retail scene before they’ve ever stepped foot in a courtroom.
“It’s easy to say that Wilmington is made up of big corporations and tall buildings, but it’s not really the case,” said Ted Gavin, a bankruptcy consultant at financial advisory and restructuring firm Gavin/Solmonese. “It’s small businesses that thrive and depend on the community that thrives and depends on the bankruptcy practice.”
New Castle County is home to 2,027 private attorneys, according to Kathy Howard, a Supreme Court clerk. In the state of Delaware there are 174 corporate and 443 government attorneys.
The Delaware Court of Chancery and intellectual property litigation comprise the other most active two-thirds of Wilmington’s legal community, working from office space that ranges from high rises with river views to boutique spaces that dot the north end of King Street.
In the midst of this legal bustle are businesses like entreDonovan, a ready-to-wear and custom clothing boutique that opened a storefront on Delaware Avenue last year.
“We decided to open in the downtown area because we saw it was filled with law firms and banks,” said Founder and Managing Member Linda Farquhar, who said she nixed the possibility of a Greenville location in favor of one that would put her directly in the path of her clients. “There’s no kind of appropriate women’s apparel store like it here.”
Farquhar estimates that 30 percent of her business is generated by the legal community. “They’ve been a lifeblood for us,” she said.
Some businesses, like courier services Parcels Inc. and Discovery DSL, exist almost entirely to meet the needs of their legal-eagle neighbors. One of the first to know about legal filings for U.S. Bankruptcy Court, Parcels, according to Gavin, has the unique ability to make the Wilmington bankruptcy circle “jump to life.”
They also shred documents, outfit war rooms, and provide trial support, copy and printing support, and document technology, as well as their long-standing courier services. Vito DiMaio is the executive president at Parcels Inc., which he said has evolved with the technology demands of the court system.
“We’ve been diving deeper and getting more involved in these litigations,” said DiMaio, of his team of 130 employees. “It has gotten busier.
“Maybe 20 years ago, if there was a patent case going on, maybe we would run documents around town, where as now we’re much further up the chain,” said DiMaio. “We forensically collecting data from work stations and apply data analytics so attorneys can look at that information.”
DiMaio said the legal business varies from week to week but his company tries to be flexible. “We don’t know if we’ll be called three times or 30 times a week by a certain firm,” he said. “It’s very fast-paced and we have zero room for error because we’re dealing with the top firms in the world.”
Some of those war rooms – temporary legal headquarters for out-of-town attorneys – are rented by the day or for several weeks at the Doubletree by Hilton Hotel on King Street or at LuxiaSuites on North Orange Street.
“The legal market is such a huge part of both trial-team groups and nightly stays for pretrial conferences,” said Stacey Hudak, corporate sales and marketing manager at Luxia. “Any time of the year there are always trials going on.”
Luxia offers an onsite war room/legal center: a large space outfitted with tables, desks, mini-offices, and an Internet connection.
Expansive bandwidth to accommodate the massive documentation is integral, according to Julie Shaw, director of sales and marketing at DoubleTree, which offers two separate “law centers” at its hotel – each 3,000 square feet.
“These legal teams have multimillion-dollar cases, and they need to make that work space as functional as possible.” Shaw said the legal centers depend on the business of the court. A simple rescheduling can have a domino effect.
“We rely on what happens in court. You have everything from restaurants to even dry cleaning companies affected. It’s amazing what they do for our little Wilmington economy.” That’s particularly true for the national practices that draw law firms from all over the country.
Energy Future Holdings Corporation is the largest bond default case in history currently pending in Delaware Court of Bankruptcy. According to news reports last year, more than three courtrooms were packed with lawyers in first-day hearings last spring.
Gavin was one of them. “It’s absolutely a mega-case,” said Gavin, who represents the unsecured note holders on the regulated side. The Texas-based utilities giant filed for Chapter 11 last spring, and the case is expected to continue through the end of this year.
With bankruptcy cases sometimes involving multiple parties and each side having two or three attorneys, Gavin said that second-day hearings can actually last months, generating additional economic activity in Wilmington. There were 433 Chapter 11 cases filed in 2014.
For out-of-town legal teams, the impact on Wilmington is immediate.
“You fly in all of the players for the depositions and the lenders and whoever has to show up. They get here the night before to meet and do paperwork,” said Gavin. “They stay in a hotel and have strategy meetings, they cater lunch from somewhere local, and that’s just the first day.
“You see 20 lawyers get off at the train and they trudge up to the court house and along the way they buy things – at the gift shop in the Amtrak station and coffee at Starbucks.”
Patent infringement attorney Adam Poff agreed. “You can have 10 to 15 people involved in a case, from lawyers, support staff, witnesses, and client representation,” said Poff, who added that there were 740 patent infringement cases filed in Delaware last year. “Once they’re in town, every meal is catered. We’ve had 20 lunches from Sugarfoot come in each day.”
Brew HaHa! Manager Christopher Parrish said he estimates at least 40 percent of his clients are from the legal community. The store has had a presence on Market Street since 1997, and Parrish said his team caters 10 to 20-person lunches two to three times a week.
Restaurant owner Pawliczek called the legal community the bread and butter of much of the city. “A lot of people don’t even realize the impact the legal district has on this town,” he said.