Posted Sep 15, 2008 08:55 pm CDT
Turmoil on Wall Street has brought major business to a few well-known law firms, as Lehman Brothers sought bankruptcy protection and Merrill Lynch & Co. agreed to be purchased by Bank of America in developments that hit the news over the weekend. And, for those in the right practice areas, there’s no shortage of legal work.
But for many lawyers it’s a scary situation, as companies and law firms alike brace themselves to deal with a financial market that already is obviously struggling and many fear may not yet have hit rock bottom, according to the Am Law Daily.
“What they’re all saying is, ‘Who do you think is next?’ And as long as people have that mentality, they’re still not going to move [on transactional work] because they think it’s going to be cheaper later,” says Alan Pomerantz, the partner in charge of Orrick, Herrington & Sutcliffe’s New York real estate practice group. Previously, he chaired the global property and finance practice group at Weil, Gotshal & Manges for more than a decade.
“It’s going to kill lawyers. It already has,” he tells the law blog in a interview reported in question-and-answer format. These aren’t just his own views, either, he says, but those of everyone he has lunch with, or meets for a drink.
What he describes as an “incredibly shrinking market” means that corporate lawyers who lose their jobs now will have great difficulty finding replacement work. And the ax is more likely to fall on fledgling associates than partners, Pomerantz says. “If I was a law student or summer associate right now, I would be very nervous.”
While this is not the worst situation he’s seen in more than 35 years of work, it’s frightening because so much is unknown. In past crises, it was possible to put lenders together in a room and talk about possible solutions in a restructuring case, he says. But now, Pomerantz says, no one truly understands what is going on, and how much leverage is at stake. So estimating the risk involved simply isn’t possible.
ABAJournal.com: “How a Lehman Bankruptcy May Unfold With Weil Gotshal’s Help”
ABAJournal.com: “Wachtell and Shearman Advised on Bank of America Deal”
ABAJournal.com: “Will 2008 Be Law Firms’ Worst Year Since Early 1990s?”
ABAJournal.com: “Axing Associates Now Could Mean Problems Later, Expert Says”