Bankruptcy Law Gaining Steam
The ripple effect of the subprime meltdown has resulted in increased demand for attorneys specializing in litigation, securities, restructuring, real estate, and bankruptcy. Executive recruiting firm, A.E. Feldman, says a number of law firms are expanding their ranks and bankruptcy attorneys are becoming hot commodities.
Everyone, it seems, is preparing for a coming wave of new bankruptcy filings, according to a recent report in the New York Times. The report states that J. Gregory Milmoe, head of the restructuring department at Skadden Arps, is expecting the firm’s department to grow to 120 attorneys worldwide next year, a level not seen since 2002.
Responding to growing demand from clients seeking guidance on the legal ramifications associated with the subprime mess, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. recently announced the formation of a dedicated Subprime Practice Group. Patterson Belknap has also started a subprime counseling practice.
“Fallout from the collapse of the subprime market is becoming increasingly widespread and the reverberations will continue to be felt for some time,” said Richard Moche of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. in a recent press release. ”Already, the firm has seen a growing demand from businesses and individuals seeking advice related to a range of complex issues stemming from the situation — from investigations by government authorities to claims against directors and officers to bankruptcy,” Moche adds.
McNutt & Litteneker had downsized from 10 lawyers in 2005 to just its two name partners by early this year, according to The Reporter. Since April, however, the firm has hired four new lawyers. The report also states that McNutt says the firm is getting three times more calls than last year about Chapter 11 from distressed midsize companies.
The bankruptcy practice is notoriously cyclical, but according to Robert Denney’s 19th annual “What’s Hot and What’s Not in the Legal Profession,” Bankruptcy law could be hot again by spring. ”The cycle is swinging back,” Denney says.
Firms seeking to bulk up their bankruptcy practices are simply following the money, says the NYT. The report cites a study conducted by UCLA Law Professor, Lynn M. LoPucki. Tracking 26 corporate bankruptcies, LoPucki found that fees increased by 12% per year since 2003. The report also contends that Professor LoPucki sees more of the same ahead.
