BigLaw Masses Troops in Subprime Feeding Frenzy
A growing tsunami of investigations, class actions and bankruptcies resulting from the U.S. mortgage meltdown has created a business boom in some BigLaw practice areas.
“Skadden, Arps, Slate, Meagher & Flom alone says it has roughly 100 lawyers across the firm working on subprime-mortgage fallout for clients such as Wells Fargo,” reports the Legal Times (sub. req.) in an article reprinted by New York Lawyer (reg. req.). Significant attorney forces have also been assembled at Kirkpatrick & Lockhart Preston Gates Ellis (which has a team of about 50 lawyers working on subprime matters) and O’Melveny & Myers (about 40).
Numerous law firms including Greenberg Traurig, Mayer Brown, Morrison & Foerster, Perkins Coie, and Pillsbury Winthrop Shaw Pittman have also established new practice areas to handle cases related to the subprime debacle.
“This is going to continue at a pretty feverish pace,” says partner Michael Missal of K&L Preston Gates, concerning the bankruptcy investigation he is conducting of subprime lender New Century Financial Corp. Like the junk-bond meltdown of the late 1980s, he predicts, the subprime tsunami is “going to take two to three years of pretty intense activity to work out.”
As discussed in recent ABAJournal.com posts, at least one lawyer has predicted that subprime mortgage litigation resulting from questionable, and even downright fraudulent, lending practices could be “bigger than Enron.” The explosion of work has prompted some elite law firms, including at least one in London’s “magic circle,” to accept cases against banks and other financial institutions that have traditionally been taboo.