Law Firm Credit Crunch

Law firms are dipping deeper into credit lines and seeking to line up new credit as they anticipate tougher financial times in 2008.

Citi Private Bank, which has relationships with about 150 law firms, finds they are using about 25 more of their credit lines than they did during 2007's boom times, reports the AmLaw Daily. And, says Jeffrey Grossman of Wachovia Wealth Management, firms that previously never touched lines of credit now are eager to make sure they are available if needed.

There are three reasons for the credit crunch, the article says: salary increases in 2007, a slowdown in payment by corporate clients hoarding cash, and less work, including a substantial reduction in deal-related matters.