There was still hope on Wall St yesterday that the US government’s $700bn financial sector bailout would eventually make it through the House of Representatives. The expectation is that a revised plan will be adopted, one way or another.
“I was just over at one of our private equity clients who said it’s something that has to happen,” says Lovells’ New York managing partner Dave Alberts. “Whether or not it’s a good idea remains to be seen, but there are no other ideas out there.”
Until the bailout is resurrected, the feeling common to lawyers in New York was shock as they watched the New York Stock Exchange tumble.
One, who has an excuse to be celebrating today as the firm he heads turns a year old, said the mood after the bailout was rejected was “very depressed and negative”.
Steve Davis, chairman of Dewey & LeBoeuf, was in good form after a year of relatively successful integration at his behemoth of a firm drew to a close. But, like everybody else, he was verging on the stunned after the events of the past few weeks were capped by the rejection of the bailout.
“Certainly from the perspective of most people, the view was something dramatic needed to be done to re-stabilise the markets,” Davis said. “The whole sector is just under enormous stress.”
Whether or not there will be a profound impact on the legal profession is still unclear.
“The bailout is just the first piece of the aftermath,” argues Friedrich Blase, a consultant with Kerma Partners. “How then will the game play out? There will be significant structural change. Everyone – every firm – will have to adapt their conduct.”
In the short term the effects have already been mixed. Some firms have seen a sharp uptick in bankruptcy work. Others are busier than ever on litigation, while a handful has won top tier work on the headline deals.
As Blase puts it, “this crisis has sorted out the men from the boys and will continue to do so. The best work has been really going to the top-tier firms. The rest have been lucky to pick up a few crumbs.”
How it will balance out, the long and short of it, nobody at this point can say.
Latest Wall St news
– 29-Sep-2008 Freshfields partner to head Bank of England legal team
– 29-Sep-2008 Firms set up financial crisis response groups
– 29-Sep-2008 Stibbe lands Fortis govenment role
– 29-Sep-2008 Davis Polk, Skadden, Sullivan in Citi’s Wachovia buy
– 29-Sep-2008 City trio bag roles on Bradford & Bingley rescue
– 26-Sep-2008 Sullivan’s Cohen grabs role on WaMu’s demise
– 26-Sep-2008 Freshfields joins Nomura deal
– 25-Sep-2008 Linklaters expands PwC team stateside
– 25-Sep-2008 Linklaters, Cleary Gottlieb get fourth Wall St mandates
– 24-Sep-2008 Sullivan and Munger Tolles step up for Buffett Goldman deal
– 24-Sep-2008 Simmons scores first Lehman hedge fund claim
– 23-Sep-2008 Cleary, Ropes & Gray on latest Lehman sale
– 23-Sep-2008 Ashurst advises CarVal on Lehman’s £100m salary lifeline
– 23-Sep-2008 Skadden Arps gets Nomura mandate in Lehman Asia buyout
Previous Wall St woes
– 30-Sep-2008: Byrne in the USA
And then there were more. The Linklaters team advising PricewaterhouseCoopers on Lehman Brothers’ bankruptcy just keeps on growing. As revealed last week, the firm has already put a mega 20-partner, 60-associate team on the matter in London. Now the magic circle firm is pulling out the stops on this side of the Atlantic…
– 25-Sep-2008: Foul-weather friends
Sullivan & Cromwell chairman Rodgin Cohen has deservedly garnered headline after headline in recent weeks. With almost four decades of experience, Cohen has won roles on deals that have kept him – and his firm – firmly at the centre of dealing with the US financial turbulence….
– 19-Sep-2008: The Queen’s City
There may be a financial crisis on Wall St, but there are new opportunities aplenty in North Carolina. In Charlotte, America’s second biggest financial centre and the home of both Bank of America and Wachovia, a whole bunch of firms are unnervingly upbeat while Wall Street collapses….
– 18-Sep-2008: The heat and the cool
It isn’t just financial institutions that are feeling the heat on Wall Street this week. The collapse of Lehman, the acquisition of Merrill Lynch and the effective nationalisation of AIG has left dozens of lawyers facing life without their once lucrative client relationships…
– 17-Sep-2008: A&O emerges
Day three of the Wall Street crisis, and the major legal players are emerging. As my colleague Julia Berris in New York noted yesterday, Wachtell and Weil Gotshal have snagged some of the biggest roles on the US end…
– 15-Sep-2008: The Lehman fallout
Oh, the ups and downs of finance lawyers. Three months ago Linklaters’ banking group was filled with gloom after JPMorgan dumped it from every mandate you’ve ever heard of…