Financial industry attorneys who in the past may have opted for in-house positions at a company like Bear Stearns Cos. Inc. for lifestyle and work environment benefits are now turning to the job security offered by law firms.
Many refugees from Bear Stearns have landed at law firms, including Bingham McCutchen; Venable; Weil, Gotshal & Manges; K&L Gates; and Katten Muchin Rosenman. With Lehman Bros. Holdings Inc. filing for bankruptcy and Merrill Lynch & Co. being swallowed by Bank of America, there's likely to be more attorneys in the field looking for safe jobs in what has become a volatile industry sector.
While schedule flexibility, shorter days and lack of billable hour pressure offered by in-house positions may have been more attractive to some financial service industry lawyers in the past, job security and cash compensation are now gaining ground in the cost-benefit analysis, some former Bear Stearns lawyers said. Law firms are not taking a direct hit from the difficulties roiling the industry, and they can offset the impact through increased bankruptcy and litigation work, they explained.
"It's like a port in the storm right now," said one former Bear Stearns attorney who has landed at a law firm and asked not to be identified.
JP Morgan Chase acquired Bear Stearns in a $2-a-share fire sale in March.
Some of the 200 or so Bear Stearns attorneys have stayed on with JP Morgan while others have left for law firms or new companies.
Gary Distell, the former lead equity group attorney at Bear Stearns, went to Katten; David Strumeyer, who formerly headed the legal and compliance department, shifted to Weil Gotshal to become the firm's executive director; Julie Richard became a partner at Venable; and Kenneth Kopelman and Gerald Russello landed at Bingham.
"Being at a law firm and being paid in cash is somewhat attractive," said Distell with a chuckle. Like other top attorneys at Bear Stearns, he was compensated partly with stock and stock options that plummeted in value as part of the merger.
Industry contacts with potential clients and experience as a client in the recent tumultuous market are key reasons that the Bear Stearns attorneys were attractive to law firms, Distell said. Venable's Richard echoed that sentiment, saying her connections to departing Bear Stearns professionals who may now set up their own funds was an attribute that made up for her not having a book of business to offer the law firm. Richard is glad she passed up an opportunity earlier this year to move to Lehman.
"There's definitely something to be said for the security in the current market dislocation," Richard said.
Some former Bear Stearns lawyers choose to stay in-house and moved to other financial service companies, including the former Bear Stearns general counsel, Michael Solender, who is now the chief legal officer at Washington Mutual Inc., also known as Wamu. Still, those positions will be drying up as more companies come to terms with their difficult financial straits. Many of the banks aren't hiring, said Brian Davis, a Major, Lindsey & Africa managing director and legal recruiter in New York.
"It's going to be more difficult for the Lehman people," Davis said.
Many Merrill lawyers are likely to be absorbed into Bank of America because the acquirer was seeking the investment management and banking expertise that those attorneys have, Davis said. Other Merrill lawyers with skills similar to existing Bank of America attorneys will probably be let go, he said.
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Attorneys Seek Law Firms as Safe Ports From the Wall Street Storm
The National Law Journal
September 22, 2008
