Need for Bankruptcy Attorneys Escalates
The domino effect of the subprime mess has resulted in a growing need for attorneys specializing in litigation, securities, restructuring, real estate,and bankruptcy. In fact a recent report in Legal Times states, “A litigation army is massing at major law firms to fight the wave of investigations, class actions, and bankruptcies that are expected in the coming months “and years” in the wake of the subprime-mortgage mess.”
As a result, executive recruiting firm, A.E. Feldman, says a number of law firms are expanding their ranks and bankruptcy attorneys are poised to gain from the trend.
Law firms seeking to bulk up their bankruptcy practices are following the money. Legal Times says the legal fees generated for firms helping to clean up the mess could reach into the hundreds of millions. The report goes so far as to suggest that billable hours in subprime litigation will surpass those accumulated during the accounting scandals of recent years.
A recent report in the New York Times cites a study conducted by UCLA Law Professor, Lynn M. LoPucki. Tracking 26 corporate bankruptcies, LoPucki found that fees have jumped by 12% per year since 2003. The report also contends that Professor LoPucki sees more of the same ahead.
Bottom line: the subprime debacle adds up to more business for attorneys. Legal Times quotes Jamie Wareham of Paul Hastings as saying, “We’d bet the number of lawyers we have working on subprime will double before June. We can’t see this clearing from a litigation standpoint in less than 48 months. And we’re nowhere near full boil.
So far this year there is a growing trend among partners to make lateral moves for better opportunities at some of the US’ biggest law firms, according to the National Law Journal. The report notes that moves in bankruptcy law are particularly active.
Richard Moche of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC says, “Fallout from the collapse of the subprime market is becoming increasingly widespread and the reverberations will continue to be felt for some time.”
