Photo: Diego M. Radzinschi/ALM

Jenner & Block on Tuesday shot back at claims by its landlord in Chicago that it owes nearly $3.8 million in unpaid rent, saying the plaintiff actually owes the firm more than $840,000 in credit on its rent.

In a 40-page answer filed in Cook County Circuit Court, the Chicago-based law firm alleged that its lease with the plaintiff, an affiliate of the real estate investment management firm known as Heitman, has abatement provisions that cover unforeseen events like the ongoing COVID-19 pandemic.

"Years ago, we negotiated a lease that provides flexibility for circumstances like this one when our workforce works from home because we are unable to use our Chicago office space as intended," said David Bradford, the acting chair of Jenner's litigation department and one of the attorneys representing the firm in this lawsuit. "We are meeting our obligations under our lease agreement."

Jenner asserted that the landlord is the one who owes money in this situation. Once the abatement provisions and other credits are applied, Hart 353 North Clark LLC owes the firm "a residual credit of over $840,000 after paying all rent due through June 30, 2020," the law firm asserted in its filing.

Jenner's counterclaims come as law firms across the country are feeling the financial pressures of the pandemic. In an effort to relieve some of that pressure, law firms have been reaching out to their landlords for some sort of rent relief. The filings between Jenner and Heitman's affiliate indicate that those negotiations have hit a stumbling block.

According to its lawsuit, Jenner is an anchor tenant of 353 North Clark St., which opened in 2009 in the River North neighborhood, which is across the river from the downtown Loop area, where several government buildings are located, including state and federal courthouses.

The firm's lease began in 2009 and will expire in 2024. Over that period of time, the firm said it is obligated to pay more than $185 million in base rent plus reimbursement for real estate taxes and other costs. Jenner said it has 579 individuals working on nine floors, consisting of 270,000 square feet; the law firm can also sublease other floors in the building.

The firm said it has not used at least 89% of its space since March 16 after it reduced the number of people working in its Chicago office to a "skeleton crew" of 12.

Jenner's co-managing partner, Randy Mehrberg, has asserted that the firm is in a very strong financial position and that "this dispute is exclusively about the enforcement of that provision in the lease." A spokeswoman also said earlier this month the firm is paying rent at its other office locations in London, Los Angeles, New York and Washington, D.C.

Jenner's overall revenue grew by 1.5% to $448 million in 2019, reversing four years of sliding revenues. In March, Thomas Perrelli, a former associate U.S. attorney general and a co-chairman of Jenner & Block's government controversies and public policy litigation practice, became the firm's newest chairman.

The firm has been on a hiring spree of sorts. In late April, Jenner announced the July 1 return of Andrew Weissmann, a top member of Robert Mueller's special counsel team; he will co-chair the firm's investigations, compliance and defense practice. In May, the firm brought on Jennifer Amerkhail, a former Federal Energy Regulation Commission lawyer. And in June, the firm poached David Pressman, the former U.S. ambassador to the United Nations, from Boies Schiller Flexner, and David Robbins from Crowell & Moring.

Hart 353 North Clark is being represented by John Riccione and other attorneys from Taft Stettinius & Hollister. They did not respond to a request for comment as of press time.

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