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When three private equity groups arranged to buy HD Supply Inc., early this past summer, the deal looked like simply another in a long chain of blockbusters. Then subprime loan defaults shot up, banks tightened their lending policies and the credit markets ran dry. With the real estate market already in a tumble, the long-term prospects of HD Supply, a division of The Home Depot Inc., that caters to building contractors, were uncertain. The deal, like dozens of others signed before the credit market shut down, was stuck in limbo. For lawyers at Debevoise & Plimpton who represented the consortium of buyers, the work they would have done after the close — and time they would have billed — was suddenly in doubt.

Even scarier for Debevoise, and for all firms with big private equity practices, was the fact that no new deals were popping up to take the place of those that were stuck. Those fears are shared by lawyers who work on mortgage-backed securities, a market that has completely shut down.

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