Nationwide Layoff Watch: McKee Nelson Says Further Cuts Are 'Unlikely'
An interesting article in today's New York Times -- by Lynnley Browning, author of the earlier Biglaw perks piece -- focuses on the subprime mortgage mess and current investigations into the adequacy of disclosures to investors.
Investigators are focused on Wall Street, but lawyers involved in the securitization process may also face scrutiny. Government investigation is the last thing these struggling law firms need, as they try to retool in the face of a grim outlook for structured finance and real estate work.
The article focuses on McKee Nelson:
McKee Nelson burst onto the scene in 1999 and quickly grabbed lucrative Wall Street work from long-established rivals. William F. Nelson, one of its co-founders, said the firm, which is known for its sophisticated tax work, did not employ any special legal maneuvers to outflank its competitors. “There’s no secret, magic elixir that we sprinkled,” Mr. Nelson said.In any case, the mortgage turmoil is now hitting the highly regarded McKee Nelson hard. The firm recently pared its structured finance department to 80 lawyers from about 115 through buyouts, sabbaticals and transfers to other departments. More cuts are unlikely, a spokeswoman said.
So that's good news. And the firm is trying to take lemons and make the proverbial lemonade:
[A]fter profiting from the mortgage boom, McKee Nelson is now positioning itself to profit from the bust by riding the coming wave of lawsuits. In January, the firm flew its partners and their spouses to Charleston, S.C., aboard four Delta commuter jets, to map out its strategy.“We’re heavily committed to doing more litigation,” Mr. Nelson said. The firm hopes to represent investment banks, hedge funds and other financial companies, as well as their executives, in a variety of litigation, he said.
And maybe law firms, too, as lawsuits and investigations proliferate? See, e.g., Cadwalader, facing a $70 million lawsuit arising out of a securitization deal gone bad.
Small Law Firm’s Big Role in Bundling Mortgages [New York Times]
(6) Comments
So they're basically going to move all their structured lawyers to litigation? Or they're going to let their structured lawyers hang out and browse ATL while their litigation lawyers bill 4000 hours/year?
“We’re heavily committed to doing more litigation,” Mr. Nelson said. The firm hopes to represent investment banks, hedge funds and other financial companies, as well as their executives, in a variety of litigation, he said.
Hmmm. Sounds like they are rearranging the deck furniture on the Titanic.
10:14: you're talking about the washington office. they don't even do tax litigation in NY. NY houses the "business litigation" department, where they do a ton of securities work. the department was started by a bunch of partners that all left king and spaulding together (and before that cadwalader). the business lit dept in NY is in a very strong position to carry the firm... indeed, they have been hiring like mad lately.
10:14 - you are a moron. Do your homework. MN's lit practice in NY is focused on securities litigation. They have 30 plus attorneys representing the I-banks in litigation on the types of deals their SF people put together.
What is interesting about this article is this firm has no qualms saying they profited off of the run-up to the credit crunch, and are now poised to profit off of the clean-up it necessitates. I wouldn't call it "rearranging deck chairs on the titantic," they more accurate description would be to causing a car wreck and then calling your own tow truck company to clear the scene.
I am a 3L who interviewed at McKee Nelson in NY as a 2L and was told that one of the great things about their firm is that they don't have conflicts with any potential clients because they don't sue anybody except the government
10:40: I suspect the focus of the current mess will be defending all the hedge funds and investment banks.