In a major development for the real estate industry in New York City, Stroock & Stroock & Lavan, one of the city's most prominent real estate law firms, is set to dissolve following a staff exodus. According to reports from Bloomberg Law and The American Lawyer, the writing was on the wall for Stroock after failed merger talks with Pillsbury Winthrop Shaw & Pittman.

The troubles for Stroock began over a year ago when more than 40 bankruptcy lawyers departed for Paul Hastings. This departure greatly impacted the firm's non-real estate practices. In a further blow, around 30 partners from the real estate practice are now expected to move to Hogan Lovells.

In an attempt to salvage their business, Stroock engaged in merger discussions with several other law firms, namely Steptoe & Johnson, McGuireWoods, Squire Patton Boggs, and Nixon Peabody. However, these talks ultimately proved unsuccessful, primarily due to complications arising from Stroock's pension obligations.

The dissolution of Stroock & Stroock & Lavan not only affects the firm itself but also has ramifications for the broader real estate industry in New York City. The Real Deal's recent ranking of law firms based on the dollar amount of property transactions recorded from August to July placed Stroock at number eight, with 26 deals totaling $726 million.

Aside from handling property sales, Stroock had further connections within the industry. The law firm was on retainer for the Real Estate Board of New York (REBNY), and one of their partners, Trevor Adler, was involved in judging the trade group's Retail Deal of the Year Awards in 2022. Another partner, Claude Szyfer, represented REBNY in a recent dispute involving Compass and its recruiting practices.

The collapse of Stroock & Stroock & Lavan will also impact the Manhattan office market, which is currently experiencing high vacancy rates. The law firm occupies a substantial 193,000 square feet at 180 Maiden Lane, near the South Street Seaport, according to the Commercial Observer.

As Stroock faces its impending dissolution, the future of its staff and their clients remains uncertain. The real estate industry in New York City will undoubtedly feel the void left by the departure of a long-standing and influential player in the field.