After Madoff Scandal, More Clients Ask Law Firms to Manage Their Money
The Bernard Madoff scandal is apparently good news for several New England law firms that manage investments for their wealthy clients.
Several Boston law firms are being tapped to manage investments by an increasing number of clients who are wary of placing their money with brokers or financial institutions, the Boston Globe reports. The story says that Boston has a long history of law firms investing money for clients, unlike other parts of the country where it is more unusual.
Just four Boston firms—Choate Hall & Stewart, Mintz Levin Cohn Ferris Glovsky & Popeo, Nutter McClennan & Fish, and WilmerHale—manage around $6 billion in assets, the story says.
Choate Hall & Stewart’s wealth management business brought in more than $100 million in new investments last year, more than triple the amount in previous years. About 10 percent of the firm’s annual revenue comes from its investment business. WilmerHale’s investment business, Silver Bridge, attracted an additional $400 million last year.
Todd Millay, the nonlawyer who oversees $2.2 billion in assets for 400 of Choate Hall’s clients, told the Globe that he once turned down an investment that promised sky-high returns. The money manager behind the fund turned out to be Madoff, who was arrested three weeks later.
One law firm, though, has shown up on a list of Madoff victims. Mintz Levin, which manages about $1 billion in assets through its investment arm, is on the list because of an existing investment inherited by a client, Mintz Levin president Bob Glovsky told the Globe. The firm never advised investors to put their money with what turned out to be Madoff Ponzi schemes, he said, although it does put money in riskier products such as hedge funds that some law firms avoid.
