Stone Age Lawyer : Diamonds Are a 47th Street Attorney’s Best Friend

On a recent Thursday, Larry Newman stood in front of the inconspicuous entrance of a dirty gray building on 47th Street, in the very center of the pushing and shoving and honking of New York’s Diamond District. He looked sleek and pulled together as he stood to the side of the mess of passersby, talking with his office on his cell phone. His slicked-back salt-and-pepper hair matched the sheen of his trim gray suit. He was waiting to go to lunch at the Diamond Dealers Club, the members-only organization for 47th Street’s most established diamond dealers.

Mr. Newman, who is 54, has made a business of taking care of the legal affairs of 47th Street’s diamond and jewelry dealers. He is a solo practitioner, and this bustling street of neon-lit storefronts filled with a melting pot of human traffic is his turf.

Just a few blocks away from diamond aristocrats like Tiffany and Harry Winston, 47th Street is nonetheless a world apart from blue-blood rituals and white-satin ribbons. It is an insular and loosely regulated world, made up of an eclectic mix of dealers, manufacturers and retailers trafficking in several billion dollars’ worth of diamonds, gold, gems and every configuration of jewelry. In that world, when something goes wrong, there are only a few lawyers in New York who know how to take care of things, and Mr. Newman has become one of them.

On this day he is waiting to have lunch with one of 47th Street’s big shots, an Israeli who runs one of the biggest diamond businesses on the street (he deals only in expensive, high-end product) and who plays an important role in the influential Diamond Dealers Club administration. He asked that his name and his company’s name not be published. Mr. Newman’s host greeted him upstairs, in the bland, office-like interior of the club. The dealer is both a client and a friend, as are most of Mr. Newman’s jewelry clients. He is affable and chatty, and had just received good news in his family–news that he told Mr. Newman immediately, as soon as the lawyer had exchanged his I.D. for a visitor’s tag and passed the security turnstiles at the club entrance.

Lawyer and dealer made their way through a large room, lined on either side with tables and high-powered lamps, and past two wall clocks showing the time in Antwerp and Ramat Gan, two of the world’s other major diamond centers. It was quiet, with only half a dozen dealers sitting at the tables examining stones under the lamps.

On trading days, the room is filled with businesspeople from all over the world–Japanese, Belgians, Russians, Indians–transacting business. Only club members are admitted; and except for a few people wearing green visitor’s tags, all of the members were men, and most were Hasidic Jews in long coats, curls and black hats. As they walked toward the restaurant, Mr. Newman’s host was leaning in close to tell him a joke about a dealer’s wife’s lover and a rabbi, but was interrupted frequently by the mazel tov ‘s and handshakes of other members. Mr. Newman stopped and greeted several other of his clients. When his host finally reached his grinning punch line, Mr. Newman shook his head, smiling–always these jokes!–and squeezed his arm. There were more interrupted jokes and sotto voce industry gossip over mushroom barley soup and salad in the club’s scrappy diner-style restaurant.

“There are a lot of intricacies in the jewelry and diamond business. There’s more concealed than revealed,” said Elan Manham, an insurance broker for jewelry dealers and Mr. Newman’s longtime friend and colleague. “You have to be of such a caliber and personality that they confide in you. If you get a Wall Street lawyer here, with a bowtie and suspenders–it’s not going to work. Larry has built himself a very solid reputation among the various communities, the Indians and Persians and Israelis. They feel comfortable trusting him and telling him the good and the bad, everything.”

The 47th Street industry is one of family businesses and ethnic communities, and Mr. Newman has represented members of most of them. Deals within a community are often done with a promise as the only collateral, and documentation can vary from informal to non-existent. “There are intricacies with how these individuals run their books,” Mr. Newman explained vaguely, if diplomatically. “A lot of the jewelry industry is on a handshake, and they’re very tough businessmen.” Dealers and their salesman often travel great distances–to shows and stores in Hong Kong, Antwerp, Memphis, Miami, Los Angeles, with cases of million-dollar lines of jewelry, carried by hand or openly exposed in booths. Deals tend most often to be cash-based. “Hits,” as a robbery or burglary or other forms of disappeared jewelry are called, occur frequently.

Indeed, the bulk of Mr. Newman’s jewelry-industry work involves representing plaintiffs’ claims against recalcitrant insurance companies, who are on the lookout for all-too-frequent fraudulent hits. He told the story of one of his recent cases.

“This New York company had this young salesman from India. He’d graduated university in Bombay. He’d come here. He wanted to learn about the business. This was a relative of [my client’s]. They sent him out with a line,” Mr. Newman began.

The inexperienced salesman made an appointment at a retailer’s store in Los Angeles, “which a lot of people don’t do,” Mr. Newman pointed out, “they just show up.” He made significant sales, which they were going to finalize the next day because it was late, and walked out with the case of jewelry in hand.

“They were waiting for him in the alley,” Mr. Newman said calmly. “They put a gun to his head.” The salesman ended up being robbed of $800,000 worth of jewelry. Mr. Newman ultimately collected full payment from the insurer, but initially the company resisted, claiming there was no way to prove that the case contained that amount of jewelry, that there were no witnesses and they needed to examine all of the dealer’s inventory and records.

But for all its apparent informality, a company like that one, Mr. Newman estimated, does about $19 million of business a year. “There are places that process hundreds of millions of dollars of diamonds a year, very unassuming buildings with incredible security,” said Mike Gorlick, an insurance defense lawyer. Another partner in the same firm as Mr. Gorlick, Daniel Friedman, who has often argued opposite Mr. Newman, agreed that the amount of business these firms do is astounding, especially given the unconventional way in which so many of them are run.

“As far as inventory goes, $1 million is absolutely nothing. That’s chump change. That’s talking diamonds–that’s a pocketful,” Mr. Friedman said. “You’re frequently dealing in seven digits.”

One of Mr. Newman’s regular challenges in the courtroom is to explain to a sometimes incredulous jury the nature of the way business is done among his clients.

“People have a bad perception of jewelry and diamond people,” Mr. Newman said matter-of-factly. “It’s difficult to make a jury understand that I could be walking around with a wallet the size of your notebook with a million dollars in it. Or that I could have a case of jewelry with $600,000 or $700,000 worth of jewelry in it, and not have my hands on it. But it’s like anything else–if you deal with something every day, it’s your commodity. How else could that industry function if you walked around with three bodyguards?”

Often, discretion is a safeguard. “Part of what protects them is their anonymity,” Dennis D’Antonio, 47th Street’s other big plaintiff’s lawyer and Mr. Newman’s polite rival, noted. Dealers might prefer to carry a million dollars of jewelry in their pocket rather than have it transported by armored car. “That just draws attention to yourself,” Mr. D’Antonio said. “If it’s in my pocket and no one knows it’s there, then that’s safer.”

But people–lawyers and juries both–tend to look askance at such informal practices. To the outside world, carrying around a million dollars’ worth of anything looks suspicious. It looks crazy. It’s Mr. Newman’s job to humanize his clients in the eyes of the jury, to tell their stories and to make all these unspoken conventions of handshakes and secrecy and cash payments seem normal.

A lot of times, in the case of a hit–for which, most often, there are no witnesses–the case comes down to the credibility of the client. “He knows his clients well,” Mr. Friedman said about Mr. Newman’s courtroom tactics. “He’s pretty good at evaluating how his client is going to affect the jury. He tries very hard to personalize his clients–many are immigrants, or even political refugees. He is quick to point that out, to build a little sympathy.”

Mr. Newman, however, would rather play the mediator than the litigator. In an industry built on trust, Mr. Newman is often called upon to repair breaches, clarify issues, solve problems, before the issue ever gets to court. In the shtetl -like workings of 47th Street, he is a kind of village elder, doling out solutions to tricky situations that can involve hard feelings and raw nerves.

“Larry is not one of these attorneys who is combative–he doesn’t prefer to go to court,” said Mr. Manham, the insurance broker. “He’s more of a practical kind of attorney. It’s easy to work with him and try to find an amicable solution–that’s his forte.” Approachable and friendly, Mr. Newman would prefer if everyone left happy. Many of these happy jewelry clients have also turned to him for other legal needs, employing him as a kind of general counsel and personal adviser, on everything from divorce to family disputes.

It has taken Mr. Newman nearly 20 years to become this well-integrated in 47th Street’s obscure world. Ironically, he began his career with one of New York’s least obscure and most loudmouthed lawyers, Harry Lipsig. He started at Mr. Lipsig’s famous negligence firm in 1974, when he graduated from St. John’s Law School. It was through a client of the firm that Mr. Newman got his first diamond case.

“I had this French client. He lived in Paris, a Tunisian gentleman named Jacques Portugais. At the time the Mitterand regime came in, he and his compatriots were concerned about what was going to happen in terms of their money and businesses, so they sent over their children to go into various businesses here in the U.S. One was diamonds, one was apparel, one was computers, one was perfume. I was their lawyer.”

Mr. Newman went out on his own in 1977, practiced in Queens for two years–he’d grown up in Kew Gardens–and then moved to Manhattan and added a few partners. In 1984 he went solo, and has been practicing alone ever since. His offices in the Goldbar building next to Grand Central Terminal are new and spacious, with a great deal of uncluttered black surfaces, voluptuous green plants and a conference table with black leather swivel chairs. He said that about 65 percent of his work is representing jewelry dealers, but he also cultivates a sizable medical malpractice and personal-injury practice.

As far as 47th Street was concerned, however, Mr. Newman is their man. As he left the Diamond Dealers Club and walked back down the street toward Sixth Avenue, he greeted several men passing by: clients, acquaintances. One young man with a Don Johnson shadow, who stood in front of a store chatting with a few others, seemed especially pleased to see the lawyer.

“Mr. Newman! Ahh! Mr. Newman!” he called out, interrupting his conversation.

He wore a black sweater tucked into his belted pants, a gold chain and, with one hand holding a cigarette and a cell phone, he reached out the other to give the lawyer a lengthy handshake. With a slight bow, he expressed profuse regret that he had missed Mr. Newman’s call the day before. Mr. Newman smiled broadly, chucked him under the chin and said that it was okay, that they would be in touch, and kept walking. Stone Age Lawyer : Diamonds Are a 47th Street Attorney’s Best Friend