The Estrin Report

"Lawyers ready for a boom in bankruptcy"

Yeah, good news for lawyers & financial advisers maybe; other people not so much:

"Business bankruptcy filings are down by 45 percent and corporate debt default rates remain near all-time lows. Yet bankruptcy pros are buzzing with anticipation.

"While they don't have crystal balls, call them cynical and firm believers in business cycles. Lawyers, consultants and financial advisers who work with troubled companies are getting ready for the next surge in business, which some predict may come as soon as the end of this year.

"'My experience over the last 20 years is that what goes up, must come down,' said Jeff Marwil, a Chicago attorney who last month left Jenner & Block to join Winston & Strawn's larger bankruptcy practice. 'Change is inevitable.'

[snip]

"To prepare, some big law firms have bolstered their bankruptcy practices by cherry-picking prominent attorneys from other firms. Marwil is one of four attorneys Winston & Strawn recruited. Kirkland & Ellis lured an attorney from rival Weil, Gotshal & Manges in New York. Top-drawer New York firm Paul, Hastings Janofsky & Walker opened its Chicago office with two bankruptcy attorneys from Jones Day."

"Bankruptcy Boutique's Lawyers Depart for Larger Firms"

Possible words of warning for people working in bankruptcy law firms, boutique or not:

"If it's tough to be tiny, it's even tougher to be small and specializing in insolvency.

"San Francisco bankruptcy boutique McNutt & Litteneker began shedding attorneys in the summer of 2005 in tandem with a drop in business. The firm several years ago had 10 full-time lawyers -- eight of whom were associates. Last month's departure of its three remaining associates have name partners Scott McNutt and Rebecca Litteneker not just running the show -- they are the show.

[snip]

"Lawyers in the bankruptcy field say it is a rare boutique that is growing -- or even holding steady -- today. Even at large firms, bankruptcy specialists have retooled to handle other types of work until the next upturn. Notorious for running counter to the general economy, the bankruptcy practice booms in recession and wanes when business is strong."

"Paralegal Faces Trial"

Oh, no, definitely not good news:

"A July 6 trial date has been set for a Fort Smith paralegal accused of giving legal advice while not licensed to practice law.

"A complaint filed in U.S. Bankruptcy Court by attorney Jim Hollis of the U.S. Trustee’s Office in Little Rock alleges that Mary Angela Barnett, a paralegal employed at the Sexton and Sanders law firm in Fort Smith, gave legal advice to Richard Wayne Graham and Tommie Anne Graham while serving as their bankruptcy petition preparer. The Grahams filed a Chapter 7 bankruptcy case in October.

"A bankruptcy petition preparer is defined as a person other than a lawyer who prepares a bankruptcy document for filing for a fee. Federal law states that a bankruptcy petition preparer cannot give legal advice.

[snip]

"Barnett has shown a 'clear and consistent pattern' of violating the law in this case and several other cases in which she prepared bankruptcy documents, the complaint alleges."