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Imagine how many billable hours it took attorneys to draft a contract between AIG (NYSE: AIG) and the U.S. government for the latter to loan the insurance company as much as $123 billion. Now the firm has government officials looking though its closets for excess compensation and ski trip expenses. There have to be several attorneys at every board meeting to make sure that the directors don't do anything to get themselves sued.
Law firms that used to handle dozens of M&A transactions may be doing poorly, but the bailout is a bonanza for others. At least forty banks are likely to take investments from the government. Every one of those will require contract drafting and negotiation on terms and conditions.
Law firms even have a name for the business of advising clients on the credit crisis. They call it the "task force" approach. Drop a bunch of lawyers in to handle an acute problem
According to Bloomberg, "H. Rodgin Cohen, 64, chairman of New York's Sullivan & Cromwell, is personally leading hundreds of attorneys from his firm representing seven financial firms, including JPMorgan Chase & Co (NYSE: JPM), Goldman Sachs Group Inc.(NYSE: GS), Lehman Brothers Holdings Inc. and the mortgage firm Fannie Mae.
Each of those attorneys is probably billing time at an average of $500 an hour. Partner time is going for much more.
Every disaster has a winner. In this case, it is attorneys.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
10-27-2008 @ 3:51PM
David said...
I truly believe that the way to get us out of this deficit is to pour money into things like highways and whatnot. Perhaps even these new fangled contraptions called zeppelins. Check out this site and their revolutionary ideas http://www.petergreenberg.com/2008/10/27/tired-of-airplanes-how-about-a-zeppelin/
This idea is not new, its a great idea but not a new one. The answers are not these huge revolutionary things but things that already exist but need tweaking.
Another thing that would help our economy is to increase exports. Its simple math more money coming in is good. Why pay farmers not to farm? Thats a socialist idea not a capitalist idea. We are not capitalist nor do we truly believe in free trade. This means we have a mixed economy and that essentially means we are socialist...that however is an entire other can of worms.