Like a Good Neighbor
Stephen Cozen has built an empire helping insurance companies sort out the damage
Published in 2007 Pennsylvania Super Lawyers magazine
on May 25, 2007
Updated on August 17, 2015
The intersection of 17th and Brown streets in Philadelphia is … well, it’s north Philly—a tough place. But there are kids in that neighborhood, kids who need a safe place to play, and one particular building there means a lot to them. It’s the house that Steve Cozen built.
Known as the Samuel D. Cozen PAL Center, it’s a place where the thump of basketballs against hardwood is accompanied by the click of computer keyboards in classrooms. After school and in the summer, kids pour in to play and learn. Yet the building wasn’t always so nice. For years it was an abandoned neighborhood eyesore. To bring it to life, Cozen donated his own time, resources and money; he, along with some friends, raised $850,000 to resurrect it as one of the city’s finest Police Athletic League centers. He named it for his father, a renowned basketball coach at Overbrook High School and Drexel University, who motivated and mentored Wilt Chamberlain, among others.
Cozen is used to building things that last. In 1970, he started a four-lawyer insurance litigation practice in Philadelphia, Cozen O’Connor, which today has 1,200 employees and offices in 22 cities, including London. Along the way he has been involved in some of the biggest insurance cases in the world, including the explosion of Pan Am Flight 103 over Lockerbie, Scotland; the Three Mile Island nuclear plant incident; and the fire at One Meridian Plaza in Philadelphia. That fire, in 1991, illustrates classic Cozen: He helped resolve what could have been a decade of litigation in four years, settling some $1.5 billion in claims for less than $100 million—“and my clients contributed very, very little to that,” he says. He also won $120 million back for his clients—which included developer Ron Rubin—from other defendants.
“We couldn’t have been represented any better,” says Rubin, chairman/CEO of the Pennsylvania Real Estate Investment Trust. “When we needed him, he was there.”
Says Cozen’s longtime partner Pat O’Connor: “There were so many moving parts. We were a defendant and we were a plaintiff and there were millions of dollars at stake and dozens of parties. To this day it is one of the most marvelous sets of trial and resolution skills I have ever seen. He took multitasking to a new level and brought it all to a successful conclusion.”
Cozen was also there for his clients after 9/11. The afternoon of the attacks, the board of directors of the Chubb Corporation—one of the largest insurers of those occupying the Twin Towers—asked itself some serious issues. How difficult would it be to cover the losses? Would its reinsurers stand up and fulfill their commitments? Could the war risk exclusions apply, meaning the company wouldn’t have to pay? What were the implications for business interruption coverage? Adding to the tension: The world was waiting to see what major insurers like Chubb would do. Any weakness in their response could increase the fear in the U.S. and roil the world’s financial markets. At the center of this debate was John J. Degnan, former attorney general of New Jersey and vice chairman of Chubb. Degnan had worked with Cozen before. It didn’t take him long to pick up the phone.
“At that point it’s clear to me that we were facing 72 hours of the most important decisions of our careers,” says Degnan. “The president is on TV calling it an act of war, and we had to act quickly. Who do we call? Cozen.
“There were 25 smart people in the boardroom debating, and we stayed on the line with him all day that day and all day the next day. He stopped everything to help us. It was the biggest loss the company was ever going to face—and he was the go-to guy.”
Following Cozen’s advice, Chubb announced it would not apply for war risk exclusions. It was the first major insurer to make this decision, which set the tone for the rest of the industry. Other insurance companies fell in line.
Born in south Philly and raised in Wynnefield, Cozen earned a history degree at the University of Pennsylvania while playing basketball for legendary coach “Jack” McCloskey, who went on to become general manager of the Detroit Pistons. After he graduated from Penn, Cozen married his wife, Sandy, whom he had known since age 8 (they have three daughters and seven grandchildren). Then it was on to Penn’s law school, where a professor named Leo Levin hit the ignition switch.
“He loved the law and he made it come alive,” says Cozen. “He made it exciting and real. It wasn’t some amorphous, conceptual thing. He showed you how it affected people’s lives and how the principles of the law are so precious to our society.”
While in law school, he became interested in insurance work because of his uncle, Sydney C. Orlofsky, a Philly attorney who specialized in that practice area. Cozen helped Orlofsky with briefs; when Baltimore Colts owner Carroll Rosenbloom was accused of insurance fraud in a fire at his Margate, N.J., home, Cozen proved Rosenbloom’s innocence. Rosenbloom, who died in 1979, was so grateful he paid for the remainder of Cozen’s law school education, including room and board, through a fellowship from the Baltimore Colts Foundation.
Cozen’s next big break came when he helped secure a $6 million verdict in a 1965 fire that destroyed the Philadelphia headquarters of Connelly Containers. The fire started when a railroad repairman in western Pennsylvania accidentally dropped the hot end of a welding rod onto bags of cornstarch in one of the cars. The blaze smoldered for days before igniting when a worker at the Connolly plant in Bala Cynwyd opened the door to the car, feeding it oxygen. Cozen and lead counsel Frank Marshall sued the railroad on behalf of Connolly, and won after proving it was possible for the fire to gestate for days while the car made its way to the Connolly building. At the time it was the largest such award in state history.
In 1967, Cozen made a friend who would turn out to be a big player in Philly: Edward M. Snider, former owner of the Philadelphia Flyers and chairman of Comcast Spectacor, which oversees the operation of the Wachovia Spectrum, among other buildings. When part of the Spectrum’s roof blew off, the city closed the building, forcing the Flyers to play their last eight home games on the road. Then the architects refused to pay the claim for the roof repairs. This left Snider in a precarious position.
“I had no money left,” Snider says. “It was a tough time. Steve was still working for his uncle, and my survival was at stake. It was not the most pleasant of circumstances, but I got the money.”
He got a friend as well as an attorney.
“It’s guys like Steve who make this city great,” says Snider. “He is our lawyer.”
Cozen met O’Connor when they faced each other in court in 1973. Although the case settled, to this day you can start an argument by putting them in the same room and asking who won. But Cozen was so impressed that when he considered going out on his own, he called O’Connor.
For his part, O’Connor cheerfully grumbles about the outcome of that case—but he has no regrets about his decision to partner with Cozen.
“I said it then and say it now—he is the most impressive lawyer I have ever come across,” says O’Connor. “He is passionate about everything he does. No one outworks Steve on anything. He is an extremely competitive person in the best sense of the word. I marvel at his energy and that he can balance all of this with his successful family life. There are very few people who come along in a lifetime like Steve.”
By the end of the 1970s, Cozen O’Connor had an entire division devoted to handling the insurance end of disasters. Cozen spent the better part of several years traveling, handling high-profile cases in Kansas City with the Hyatt skywalk collapse and then in Vegas with the MGM Grand fire, as well as Three Mile Island, which is closer to home. Cozen was trying cases 35 weeks per year and running the firm with O’Connor, sometimes putting in 18 hours a day.
“I was going around the country doing one piece of catastrophic litigation after the other,” says Cozen. “It was very taxing and very exciting. I was getting to do what I liked at the highest possible level.”
Cozen O’Connor today has 525 lawyers. The numbers are impressive: the firm grossed about $230 million last year. Each year it recovers some $200 million for its insurance clients. It continually ranks high in terms of revenues, profits and compensation per lawyer. Maybe just as impressive: In some 37 years of operation, only about two dozen senior lawyers have left or been recruited away.
“That’s attributable to the culture of the firm,” Cozen says.
“What makes Steve extraordinary is not just hard work,” says Barry Schwartz, a former partner at Philly’s Wolf, Block Schorr & Solis-Cohen, and now general counsel for MacAndrews & Forbes, a New York-based holding company and a Cozen O’Connor client. “He has terrific judgment. I look for my lawyers to have more than just an understanding of the legal process and Steve’s got it.”
Phil Weinberg, general counsel at Comcast Spectacor, says it’s easy to figure out why Cozen’s firm has grown so much. “I think it’s directly attributable to the force of his personality,” he says. “There’s no fluff there. He is really a substantive guy.”
As with so many others, the seeds of the friendship and respect between Weinberg and Cozen were sown during a dispute. In the mid-1990s Comcast Spectacor was involved in a disagreement regarding the building of concession stands. Cozen arbitrated the case. “I’m not sure we were totally satisfied with it, but he made justice and we moved on,” says Weinberg. “I was impressed with his innate sense of the business issues and his ability to see through the legal posturing and get to the common-sense answer. That has always been Steve’s hallmark as a lawyer.”
In 2001, Cozen stepped down as the firm’s CEO but stayed on as chairman. He remains busy as a strategist and appellate advocate. When he’s not focused on his philanthropic efforts, that is.
Cozen devotes energy, time and money not just to the Samuel D. Cozen PAL Center but also to the Kimmel Center for the Performing Arts, the Federation of Jewish Agencies, the National Museum of American Jewish History, and the University of Pennsylvania’s Institute for Law and Economics and its Law School Board of Overseers. In 2002, he was elected to the reconstituted board of directors for the Shoah Foundation and was awarded the Anti-Defamation League’s highest honor, the 25th Annual Americanism Award.
“I’ve been privileged to work with a tremendous number of great lawyers, including my partner Pat O’Connor, and many of them have made tremendous contributions to the practice of law,” he says. “But I can’t imagine any contribution that can be greater than giving back to the community and helping to improve the lives of people.”
Like the ones at 17th and Brown.