Candace Carlyon

By Stephanie Tavares

Friday, Jan. 9, 2009 | 2 a.m.

Candace Carlyon is a co-founder and name partner of boutique bankruptcy law firm Shea & Carlyon.

She is also a 9th Circuit Court of Appeals lawyer representative for Nevada, a Nevada Supreme Court settlement judge and a judge pro tempore for the 8th Judicial District Court’s short trial program.

She is one of the top bankruptcy lawyers in the state, representing secured lenders (mostly banks) in state, federal and U.S. Bankruptcy Court.

It is a practice she fell in love with as a summer law clerk with her first case and one that, these days, consumes nearly all her working hours.

Her seat at the table of some of the state’s largest bankruptcy cases gives her unique insight into the state of the Las Vegas economy.

Tell me more about Shea & Carlyon and your practice.

We have three partners, four associates and two of counsel, who aren’t housed here but do work for us on an as-needed basis.

One of the things about being so small is we’re able to make accommodations for people who want to work part time or off-site and have those resources they can bring to us so we can take advantage of something other than a traditional full-time schedule. So that’s been nice.

I used to tell my children when they were smaller that I turn people upside down and shake them until money falls out of their pockets.

Why did you choose to start your own firm? Why not work for a corporate law giant?

We kept hitting our heads on the ceiling. We worked with a larger firm, and it was a wonderful place to grow up professionally. But when you reach a certain point and have a certain vision, you want to make it happen. My partner and I reached that point, so 13 years ago we set off on our own.

It ended up being a fairly sudden move. We rented offices from another attorney who had to clear out ... what was being used for storage. He had some very, very used furniture he let us use. Lisa Treadway, my assistant, ended up working on a green folding table and chair until we could get a desk for her.

It was very exciting, but not what most people imagine as what it would be like opening their own firm.

Your firm has stayed in the downtown area. Why did you do that, and do you have plans to move into any other office parks in other parts of town?

No, we’re staying downtown. We’re two blocks from Bankruptcy Court and four or five blocks from state court and that’s fantastic for us — it’s fantastic for our clients, they don’t have to pay for us to drive from 30 minutes away when we go to court for them.

My partners live on the west side and I live on the east side, so this is just perfectly inconvenient (laughing) for both of us. We love the downtown area, and it’s just been great for us.

How much of your work is in court?

The judges always say they just see the tip of the iceberg, and I think that’s about right. Maybe 10 percent of the time you’re actually in court and 90 percent of the time you’re drafting, researching and talking to clients. Especially the commercial bankruptcy practice, because the best representation you can give to someone is to work something out so the business issues get solved rather than having to hash them out before a judge and having the judge make a decision.

A judge typically can only say yes or no, and there are a lot of creative and mutually beneficial solutions to business problems. To me that’s the exciting part of doing what I do: making businesses work, having people still be employed and the doors stay open. And most of that work happens outside the courtroom.

Do you use alternative dispute resolution and mediation?

There’s been a tremendous increase in that aspect of the practice of law.

I got tapped early on by my former boss, Justice Cliff Young, who has just retired from the Nevada Supreme Court, to participate in the Nevada Supreme Court’s mediation program, so I actually have acted as a mediator for some very large cases. And I believe I’ve been 100 percent successful in settling those actions when I’ve been the mediator.

Both the state court and the Bankruptcy Court also have programs where you can do a mediation before a judge, which is very effective. We’ve been able to take advantage of that with our clients.

I always tell our clients that doing a settlement conference is such a small cost for such a big potential. Because if you can settle a case early on, you save so much in fees and so much time and attention that your business needs. And no one will make you settle, so in going to a settlement conference you don’t risk something happening without your consent. It’s a great direction the practice has taken.

There’s also a program in state court that I like a lot: the short trial program.

Judge Tim Williams originated this program before he became a judge and it permits professionals to become judges for one-day trials and many of the cases that go under the program are smaller cases, because they’re appeals from the mandatory arbitration program, cases under $16,000. But any case can go with the consent of both parties. So any case can be assigned to the short trial program.

Typically that gets you to trial in about six months. All of the exhibits are agreed on in advance. You don’t need the experts to come and testify unless you want to, so the appraisal or the medical records can just come in if both parties agree they’re authentic. Each side has four hours to present its case and you use a device like a chess timer to count time. And every case concludes within a day.

It’s also great for the public because (the program does) jury trials as well as bench trials. So when you serve as a juror for the short trial program you get to serve on a jury, but you know you’re going to be done that day, which is just tremendous.

One of the judges says she believes that every American desperately wants to serve their country by sitting on a jury — just not today. And it’s true. I’ve been summoned for jury duty three times in the last six years, and I want to do it and I’m proud to do it, but it’s so inconvenient. So this is a convenient way for people to be able to sit on a jury. I’m a big fan of that program.

UNLV has a program at the Boyd School of Law that teaches alternative dispute resolution. How important is it for law students to get exposure to that?

For anyone going into the law it’s tremendously important to get that kind of exposure.

I had a torts professor in law school and he was a much older gentleman from Tennessee who used to give us practice tips.

And he told us the story about one of his clients who came in to him and said, “I want you to sue my neighbor. I want you to get writ, I want you to file an injunction, I want you to file something today. I want you to slap her with a subpoena and I want it done now.”

And he (the lawyer) said, “Why don’t you tell me what the problem is.”

And the client said, “Well, every morning she comes out of her house and down the back path and into my yard and uses my outhouse. And I have told her not to do that. And I’m sick and tired of it. And I’ve warned her and warned her and I want you to sue her. And I want you to do it now.”

And the lawyer said, “Well, I could do that. I could file a lawsuit and seek a temporary restraining order and an injunction and go to trial and that would cost you some money or you could go next door to the hardware store and, for about $1.65, you can get a deadbolt and put it on your outhouse.”

He said the client came back the next day and said, “You should have seen her, she’s going down the path, she can’t open the door, it was the funniest thing I’ve ever seen.”

That was 22 years ago and it just hit me. That’s what I love: When you see the solution that makes sense and it doesn’t involve people spending hundreds of thousands of dollars for attorneys and time to get to the right answer. Law students are just starting to realize that’s the direction the practice is going. And I think it’s a great thing for the profession.

Are clients more receptive to alternative dispute resolution now, given the dour economic situation?

Absolutely. I think that there’s a realization — my practice involves borrowers and lenders. And there’s both the good and the bad. There’s more division because when people are against the wall they tend to want to push, so you have a rash of borrowers who, when you ask for the money, want to sue you for having the audacity to ask them to keep their promise.

But at the same time you have lenders that are stretched as well. Everyone is in the same boat.

So you have lenders who are realizing that it’s much better to work things out when it’s possible. The problem is that in this environment it’s often not possible. Lenders, generally right now, if you can make the interest payments, if you can pay the taxes, if you can try to market the property, they don’t want to foreclose. But there are a lot of loans where the owners don’t even want to do that. They want to cut their losses and get out.

A lot of out-of-state firms have come into Nevada, starting right about the time you started your firm. How have they affected your practice and have they changed the way the law is practiced in Nevada?

I don’t think it’s changed the way we’ve practiced law. It was interesting when Jim (partner James Shea) and I started out on our own, we got so many calls from people who wanted us to join them and either come into town or have us be their bankruptcy department. And some of the offers were very exciting and very tempting, from people we had a lot of admiration for. But we talked about it and said we just don’t want to get back into the boat we just exited. We have a vision for what we want to create.

But there are a lot of mergers and a lot of big firms coming into town. And it only makes sense. We’re a big market.

We’re a few years behind Phoenix in population, but we don’t have, as they do, 100-lawyer and 200-lawyer firms in huge downtown high-rise buildings. We have the Strip with the high-rise buildings. So the economy is different, but one day the people in the states surrounding us woke up and said, “Hey, that’s a big economy. We should jump in there.”

Some of the firms that have come to town are just extraordinarily great firms and that tends to raise the quality of the practice, which I think is a wonderful thing. But some of them also come into town and they don’t last. And I think they find, just as large companies of any kind, that even though Las Vegas is now a very large and fast growing city, by population and economy, it’s also a small town at its heart.

Most of the professionals who I know have relationships that date back. And they’re both personal as well as professional relationships. And you don’t get that if you’re a big company with voice mail. I think a lot of businesses that come into town, not just law firms, don’t appreciate how important it is to have those relationships.

You mentioned that when you first set out on your own you turned down offers to merge. Do you see your firm merging with a regional or national firm in the future?

I love what we’ve created here. I mean, we have a very high-end clientele, but a very family-like atmosphere and that’s hard to maintain with a large firm. I’m not ruling it out that we would never look at that, particularly as Jim and I approach retirement. But we enjoy what we do and if it’s not broken, don’t fix it. I just don’t see us taking a step like that right now.

How important is that corporate culture here?

It’s very important to us. That’s why we made the change so many years ago. We had achieved the level of work and the level of financial success, but there was something missing. We were able to start from scratch and create a firm that tries to take into account those intangibles.

We have a program by which any partner can become a full and equal partner. And you don’t see that in a lot of established firms.

It’s good and bad. We hired our first associate and she said, “Do you have medical insurance?” Jim and I already had medical insurance through our spouses. So we said, “No, but that’s a great idea, you’re in charge of medical insurance.” We had another lawyer join us and he asked if we had dental insurance and we said, “No, but now you’re in charge of dental insurance.”

And that’s just kind of how we’ve grown. We have the flexibility to have the programs our people want. We have the ability to go out and play air hockey sometimes, but we still do top-level work and take care of our clients.

Is it difficult to get those more administrative things taken care of in a small law firm?

It is. When you start out it’s like groping your way in the dark, because we had not run a business. We started out with a cigar box instead of a checking account and moved on from there.

But it was great learning the business from the bottom to the top. And to a large extent we could see what our colleagues were doing and what we did and didn’t like about it.

We may not look exactly like anybody else, but we get to do what we want and create what we want.

The administrative tasks are both wonderful and terrible. It’s great to have the ability to get any kind of pen that anybody needs to do their job, but it’s a burden on us because we do more administrative work than we would if we worked for a large firm.

I have the pleasure of having an office administrator who just does a great job of shifting that load and brings a lot of insight. But we still keep our hands in.

There has been a lot of debate in recent years about bringing chancery courts to Nevada as well as whether to expand the business courts. Do you have an opinion on that debate or whether there are changes you’d like to see within the judicial structure?

I love the fact that we have the business court in state court. I think it’s been very successful.

Our business court judges right now, Judge Mark Denton and Judge Elizabeth Gonzalez, are exceptional judges.

I hope that program expands because it has been more fully utilized to the point where those judges are so overworked. I feel bad for them.

If you want to set a trial in front of Judge Gonzalez, you’re looking at a couple of years down the road. That’s a difficult thing when you have a court set aside for handling disputes that are inherently of a large commercial, and therefore important and urgent, nature.

But they work so hard to make that happen. So I’m hopeful they will expand the business court to include more judges. I know that from the practitioner’s side, we utilize business court a lot more than we did just a few years ago.

You have been involved in a lot of high-profile bankruptcy reorganizations. How has your practice changed over the years?

We represent almost exclusively lenders. We did more representation of the businesses in bankruptcy and creditors committees years ago than we do now.

A lot of that is because at some point you almost have to chose teams. You get more conflicts as you try to represent a borrower when you have 20 clients that are lenders.

But there’s a lot of excitement to representing a debtor in bankruptcy, especially casino cases. The fun part about being a commercial bankruptcy attorney is learning the businesses. I have to learn what makes a casino run or a radio station or an oil and gasoline distributor, a franchisee, a restaurant. And I love that aspect of the practice. That’s really what drew me to it.

And you see more of that, you’re more involved with the business and the businesspeople when you represent the business that’s in bankruptcy than when you represent the lender.

So that’s been a change. But we’re very comfortable, our clients are just exceptional people as well as businesses, so we’re very happy with where we are.

Have you seen an uptick in business in the last year?

(Laughter) It seems like my 11-year-old is always saying, “You work too hard.”

Yes, we’re very busy. We’ve added two attorneys, we’re looking to add more attorneys, and it’s a good time to find people.

We’re doing a lot of litigation, a lot more of our practice is in litigation. So we’re looking for litigators, which is timely because a lot of firms are laying off litigators. So that’s been nice for us.

But I used to make jokes about how I hated this good economy and I hope it ends soon. And now I just want to take it all back. I never imagined seeing things as bad as they are now. It’s hitting everyone. It’s a sad time for the country. It’s very challenging.

Law schools are still turning out graduates and a lot of students are looking more closely at bankruptcy because of the economic downturn. Do you have any advice for law students about finding a practice area they love?

I always think you should do what you like. It’s one of those things like the U.S. Supreme Court’s definition of pornography: You know it when you see it.

When I did work as a law clerk, I was fortunate enough to work for a large firm and have projects in a number of different areas: copyright law, entertainment law, business law and bankruptcy.

And I went into a meeting where a gentleman who had founded a family business with several men’s clothing stores had a meeting with the attorneys for all his creditors, and they were explaining that he was going to need to cut back his business and get rid of a family member that wasn’t performing and meet goals so they could restructure the debt. He basically said, “I refuse to do that.” And we said we’re going to file an involuntary petition in five minutes. We have the papers down at the courthouse.

And he thought about it and what he’d built, and he realized that what they were saying made sense.

Fundamentally, in my business, everyone has the same interest — which is the company making money. And they came to an agreement and the door stayed open and the employees kept their jobs and I just knew at that moment that was what I wanted to do. And I think the different people have that flash in different businesses.

I don’t think enough law students know enough to know what they want to do. They think they want to do international law or criminal law. But a lot of times the reality is different. So my advice would be to get as much experience in as many diverse areas as you can.

The Boyd program has a lot of internships available and that’s great. It’s great to experience as much as you can and to keep an open mind.

Do you have a summer internship program?

Yes. The size of the program depends on the year and it depends on the people. We usually have one law clerk at a time, but we have had as many as three at a time. We have the flexibility to hire somebody when the right person walks through the door.

We do recruiting at Boyd both on and off campus, and sometimes you see a person and you make the space for them. But we don’t hire someone just to hire someone.

I’ve heard that corporate bankruptcy in Nevada is cyclic. How is this round different from previous cycles?

Well, most cycles you don’t have the line that goes so far underneath the ground. We’ve had other cycles where we’ve had construction issues and we’d see a little ripple in the construction industry. Or we’d have a little cycle that involved some retail issues and there would be a little ripple.

Well, now we have the perfect storm. What started out as an inflation in housing prices led to the foreclosures that impacted construction. Retail suffered a crisis, so that impacts very heavily employment. People don’t have money, people don’t have jobs and that impacts tourism. Other than my business, I really can’t think of an area that hasn’t been negatively impacted — the airline crisis, the auto crisis. It all goes back to the same thing: People either don’t have the money to spend or are fearful of spending the money because of the uncertainty. And it’s going to take a change in people’s outlook to reverse that cycle. We still have a lot of bad news in the pipeline.

It’s like the snake digesting the rat and we’re just at the head. These foreclosures take four months in Nevada from start to finish, at the least. If there’s a bankruptcy, it could take a year or more. Then once the bank has the property they have to sell the property and that could take another year. From start to finish per bad loan it’s usually about a two-year process.

Well, we still have a lot of these things that are still in the foreclosure stage. So we’ve got 18 months on the other side at best before the rat is digested. I’m thinking we’re going to be in this for the next couple of years.

Has the tightening of the credit markets affected how deals are done? Is it more difficult to restructure?

The commercial markets in this country have been so much like the house market five years ago. Four years ago people were making loans based on some perception of value as opposed to cash flow. And it’s exactly the same thing that happened with individuals and houses. People bought houses and got loans on the basis that they’d be worth more next year rather than on the basis of “If I sign this loan agreement on these terms, I’m going to be able to make the payments out of my salary.”

We had so many loans that kept refinancing when they matured and refinancing when they matured and at higher rates and at some point the music stopped and that’s what has happened.

So of course it’s impacted the markets. There isn’t all that free money going around that is being loaned even though there’s no demonstrated ability to repay. And that’s the mistake the market made that has created this very distressing correction.

Have the bankruptcy reform laws had any effect on your practice and the market for bankruptcy law?

From my standpoint, one of the provisions of the Bankruptcy Reform Act is that there’s a provision that requires attorneys who represent certain individuals in bankruptcies to have some disclosures in all their public statements to the effect that “we help people file for bankruptcy, we are a debt relief agency.” And since we don’t do that, we can’t make that statement. And since we can’t make that statement, we can’t represent those people.

So basically what it’s done for us is stopped us from representing individuals. We just don’t do that anymore.

In terms of the market there has been a much greater impact. There are so many cases being filed and they are sad cases. I mean, it’s not just cases where someone has a gambling problem or someone had a medical problem, it’s everyone. It’s so many more people where the stories, as tragic as they are, become commonplace, almost.

The Bankruptcy Courts are so overburdened. They may have a 100-page calendar on the days when they hear motions on individual cases. And I don’t know how the judges are managing. We have fantastic judges, but it’s too much work for anyone.

A judge told me just the other day that they’ve been closing 1,000 cases a month, which is a huge number. We only have four bankruptcy judges in the state. But filings are 1,500 cases a month. And you just can’t keep up.

I’m hoping with a new Democratic administration we get the judges that we need. Especially if they take steps toward reforming the law with regard to bankruptcy and home mortgages, because people just need that relief.

Does the firm do any pro bono work? And is that possible with the nature of your practice?

We do and one of the programs that Judge (Linda) Riegle was instrumental in creating is a program where a bankruptcy attorney is present in Bankruptcy Court on days when individual cases are heard. And if someone doesn’t have an attorney, they can meet with that attorney — not as their counsel, but as a resource. And we’ve actually been able to fund the Clark County Pro Bono Project so that they have a full-time attorney with that slot. Before that, we would volunteer to take a morning in a particular court room to just be there and consult with folks who needed to talk to an attorney. And if that means we refer them to the project so they can actually get counsel to continue the matter, that’s what they did. But sometimes they just need to understand what their options might be.

Now, since we have that attorney, those opportunities arise mostly when that person is on vacation. But I’ve been able to continue to do that in that capacity, which I like a lot.

And then we do other projects including a professional training organization for new attorneys — it involves new attorneys, midpractice attorneys and more experienced attorneys. And you match those people up in a group and they present a hopefully entertaining program on that topic. And so it’s a great way for students out of law school who haven’t had the time practicing to get involved without having a client and doing that realistic in-depth presentation. And you get to work with judges and you get to work with people that as a young attorney you might not get to meet otherwise. I like that a lot.

And then we participate in various charitable organizations. And that’s another great thing about our office. We just do that as a team. (Early in December), we adopted a family through (Candlelighters Childhood Cancer Foundation) and took presents out to them. The family actually lost a child last year to cancer. So we went out and got the Transformers and the Dora the Explorer bicycle and we took it over there and met the children, and it was just wonderful.

What are your long-term goals for yourself and the firm?

About five years ago I had a friend that was attending a goal-setting workshop and I started thinking about it, and I said, “You know, I’ve accomplished all my goals — professionally and personally I’ve done what I set out to do.”

You get to a certain point and you want to spend time with your family, you want to give back to the community and that’s important to us.

Any aspirations to become a judge?

I feel that pull. If the opportunity became available I think it is something I think I’d be interested in. But I’m also getting to a point where I’m 46 and a bankruptcy judgeship is a 14-year commitment and at some point I’d like to be able to just spend time with my husband and see the world more than two weeks at a time. So we’ll see what God has in store for us.

I know your practice is very busy right now, but when you’re not working, what do you enjoy?

My family. As all professional women do, you try to convince yourself that the quality of the time you spend with your children makes up for a lack in quantity. We play Boggle and we cook together, and it’s a nice thing to spend time with the family, to take walks. I like to travel, I like to cook, I like to entertain. I have a number of professional organizations I’m involved in that take my time.

The thing I added to my life this last year is yoga. It’s something I’ve always liked to do when I get the chance. But I found out that Blue Sky Yoga on Charleston has yoga at lunchtime during the week. So I started going and then several people from the office started going. So we’ll try to go at least once a week and do yoga together and come back and try to rinse off in the sink. It’s been great. It’s been a nice grounding experience and getting a little exercise. In fact, it’s been so much fun that for my birthday the office got me a Wii Fit, which is here in the office. When we don’t have time to go to yoga we try to do a little stepping and a little yoga here in my office. It’s fun. Except it tracks your progress and harasses you a bit when you haven’t worked out for a while. You get nagged by the television.

Stephanie Tavares covers utilities and law for In Business Las Vegas and its sister publication, the Las Vegas Sun. She can be reached at 259-4059 or at [email protected].