Long term I believe this is going to be very bad for New York corporate attorneys. Hell, my firm technically just lost two clients (Bear and Lehman) and will lose more has the larger banks consolidate. As one poster on dealbreaker wrote: "Are the days of models/bottles over?"

Maybe . . .

very incomplete reporting. willkie is involved in the Lehman situation; sidley is involved in the merril lynch work; i hear kirkland might be representing some of lehman's creditors... we want more info.

8:27 - Where are you reading that?

WLRK is untouchable.

ML is a big client of Sidley Austin, in fact it might be Sidley's biggest client. Can we expect that firm to get shaken up a bit?

Isn't Skaggen Arps involved iin any of this?

@6: Yes. The combined entity will get rid of redundancies, and that includes law firms. First problem for us lawyers: Less competition in the marketplace because of fewer players = fewer billable hours = smaller revenues. Second problem: BofA and Merrill (generally) went to different law firms for similar tasks, now they will just use one. Now, I said similar tasks because both banks use a large number of firms depending on what type of transaction is involved. But either way, firms that deal with them currently will get hurt after the merger.

ML is Sidley's oldest and biggest client...i have no reason to believe that Sidley will lose all their ML business as a result of this, but the uncertainty has to have the Sidley guys worrying...

Does anyone have a link to the first day filings for Lehman?

@3...source of this?

Lat/Mystal please further report on this - cast of characters by COB today is what the people/readers want to see.

And yeah...Skadden is nowhere in any of this?

9:01(1) -- I don't think they have filed yet. Look at the press release:

http://dealbreaker.com/2008/09/lehman-announces-bankruptcy-fi.php

agree with 11...virtual silence so far is pretty weak

blawgers need to work the occasional weekend, too...

9:04--one of the WSJ articles abotu the nakruptcy seemed to indicate that they had been filed (listing the biggest creditors, total assets, etc). But maybe the writer was given a draft in advance.

Yeah - ATL was terrible in the legal coverage of this compared to DB...Carney rules...Elie is a total failure...fatboy must've been gorging on big macs and sleeping.

11, 13 - The post covers the major info: who is representing the principals. That is where the $$$ is.

Nobody cares who is legal counsel to the board of directors or the financial advisers. That is boring.

re Sidley and ML: thought id let you know that Bank of America is also a Sidley client... no worries.

ATL has been behind in its reporting of this story/angle. It should have posted something on Fri. or over the weekend about this, especially because it wasn't a secret about these firms representation LEH/MER/BOA. Everyone knew Weil was working on the LEH bankruptcy filing before talks fell apart over the weekend (as a backup, BSC had its bankruptcy filling ready just in case things fell apart back then as well). Yet another example of how crappy this site has become.

Actually, ATL beat both Law.com and the WSJ Law Blog on this. Neither of those sites has anything up yet about this.

Anyway, if you don't like ATL, don't read it. I am sure the site will do just fine without you.

WE MISS YOU LAT

This post IS by Lat - look at the byline.

How does a company sell itself to another company? Spare me that "Are you retarded" since I don't practice corporate law....

agree w/ 20.

Notice how it was Lat who posted this and not Ellie...what was he doing...getting ready to post more about Madden 2009...good job guy.

9:16 - What do you mean exactly?

The CEOs (and their financial and legal advisors) meet and reach an agreement on terms. The deal gets approved by the boards of directors and the shareholders of the companies.

@22: Basically, it's a stock deal, meaning that BofA is going to issue X number of shares to the Merrill shareholders for each share they own of Merrill stock. At the end of the day, all Merill shareholders will no longer own Merrill shares and will instead own BofA's shares. Merrill's shares will then probably be cancelled and Merrill will no longer exist as a separate entity. So, after the share exchange, all of the assets of Merrill will now be owned by the BofA shareholders, and thus owned by BofA.

Does that make sense? If not, ask more questions and I'll try to answer.

Thanks #24, I thought that was the essence of it.

@19, doesn't matter if it 'beat' other blogs on this -- it's still not exactly the freshest news at this point. Not sure why you're so defensive about it. Obviously there are areas where a blog could improve and ATL's lack of coverage last wk/this wknd of the legal angle in this mess has to be pointed out.

How will the NY-Centric firms (WLRK, Cravath) get hit by this as compared to the interational (Cleary, White & Case)?

Thanks #25 too! I am really impressed by the civility and helpfulness of some people on this blog!

come back for good, lat!

No problem 29. I think the horror of this whole weekend has put everyone into a slight bit of shock, so our normal smartass selves are taking a leave of absence . . .

This is really bad.

And to 28, I don't think WLRK or Cravath will have too much to worry about. Their smaller size and lean staffing will help them out. The internationals will be aided (obviously) by international transactions. But, in reality, even in internationals deals, the New York i-banks are generally the ones putting up the money. You do have exceptions for international banks like BNP Paribus, Macquarie, etc., but the US based banks are the real heavy hitters. At the end of the day, this will affect all markets, I believe, so there will probably be a general corporate slowdown worldwide.

Just my 2 cents though. I could be (and somewhat hope) that I'm wrong.

I wonder if firms doing OCI right now will try to further reduce class sizes. Glad I already have a couple of offers in hand.

32 - they can rescind at any time -- hurry up!!!!

32 - not to be snarky, but that offer is obviously better than nothing, but it obviously can be rescinded at any moment... just congratulations, but don't jinx yourself.

33/34...uh, if a firm is about to rescind offers but you beat them to it, are you sure that it is a place you want to work? especially if you are like 32 and have a couple of offers...

32-34 - it'd be funny to be recruiter today getting all of these rushed acceptances over the phone.... call early, don't leave messages, just keep dialing

29 - Are you being sarcastic? The commenters here are so rude, in my experience.....

17: Every Am Law 100 firm represents B of A.

How will this affect litigators overall? More or less work?

Evidently #25 just sat in on his first M&A class!! Way to go.

@40: I'm a corporate attorney, not a law student. Just trying to be helpful.

- 25

To echo some of the statements already posted, this is really bad for these law firms long term. Next year, when we look back on revenues for this year, it might be good for Weil that their lawyers got to work around the clock for a few months on Lehman's bankruptcy, but they (and probably the other firms listed) are losing a huge institutional client that delivers constant business.

weil is going to get around 300mil from this bankruptcy litigation.

This is so far from a silver lining, it's not even funny. The only upside is that this throws off massive hours in the short-term to a handful of firms.

The law firms that depended on Lehman, ML, and now AIG willl have to replace the work or scale back their ranks. Laterals (who see the writing on the wall or get the axe) will flood the market. These are laterals from top shops, so it will hurt laterals from lesser firms. Shakier markets mean less money for all other deals and belt-tightening all around. And belt-tightening leads to RIFs in law firms and corporate offices. And law students don't have much to look forward to either for a few years. Think '02-'03, but much worse.

This is bad all the way around. I hope the a-holes who profited off of all of this before the collapse got a lot out of it. F you very much.

Does anyone have experience working for BoA as underwriter's counsel? I hope they keep the ML capital markets teams basically intact...

Does anyone have experience working for BoA as underwriter's counsel? I hope they keep the ML capital markets teams basically intact...

@45: I work with BofA on a daily basis as underwriters counsel (and with Merrill). No idea what's going to happen with all of this. I'm more than a little bit nervous.

Obama, obviously didn't take economics in college.
http://news.yahoo.com/s/ap/20080915/ap_on_el_pr/obama;_ylt=AovL12h39qPyELRgTWWmPn6yFz4D

47: it's 45. I hear you. We went through this with Bear, and the shake up was pretty severe. My guess is that maybe BoA will keep more ML people around since they don't have as extensive an underwriting practice as JPM had before the Bear bailout. But maybe that's just because I've never worked with BoA. What do you think?

this is good idea

I am willing to bet that this crisis was entirely created by the part time night program at GULC. Damn you GULC!!!

@12: U.S. Bankruptcy Court in the Southern District of New York by Lehman Brothers Holdings Inc., Case No 08-13555

3: yes, Charlotte offices that do a lot of BoA business Moore & Van Allen and McGuireWoods have been pretty involved on its side of the deal

This isn't just an end to LEH and MER (and AIG in a few days).

This is an end to the entire go-go Wall Street era. I'm not sure people are appreciating the degree to which the finance system is being shook up. This will be a longlasting contraction in work, and it's going to be of a very major magnitude as well.

The first major RIF is going to be the size of this year's summer class.

thank the lord i did my callbacks early. i have a feeling the acceptance rate is going to plummet for the remaining interviewees.

parent files and subs keep operating?? some insight from bankruptcy lawyers please. thanks

I don't think these events will hurt the legal market as much as people here suggest. The few law firms that really relied on ML and LH for business will suffer.

However, BoA becomes a larger client and the business LH conducted will now belong to other shops. Plus, I wouldn't understate the short-term gain in business in bankruptcy or litigation.

I'm feeling luckier than ever to have a tech background and going into IP litigation. Suck it humanities majors going into corporate law!

Awww. CharloTTTe had to work on a weekend. That must have been tough,

Being a litigator/bankruptcy attorney right now is going to pay off.

@ 57 - You weren't around for the tech bust, were you?

This is much worse than the tech bust, because the entire system is getting taken out, and we're not even done with this. There is going to be a new normal as the United States deleverages its financial system, and that is going to come with a contraction and slow growth after that, that is going to hit corporate America where they live moreso than any other previous downturn.

There is no silver lining here - that's like saying there's a silver lining when your house burns down and kills your family, because at least you will be busy dealing with funeral arrangements and you won't have to worry about taking the kids to school anymore.

Short version is, this will mean a major slowdown in deal work, significant lawyer layoffs and a completely changed financial landscape. Do you think that anyone would have tipped LEH to fail as of 1/1/2008? No. This means that the worst is yet to come, and when AIG and Wachovia, WaMu and a bunch of other consumer banks fail a good portion of our economy may be well and truly fucked.

56 - Lehman is filing for reorganization (ch. 11), not liquidation (ch. 7). It's still functioning.

I think the "silver lining" approach is a short-sighted way of looking at this. When companies in an industry merge or go under, it does hurt attorneys and firms; for example, after all the telecom companies merged or went under, there was a lot less work, a lot fewer firms involved, and a lot of unemployed or underemployed telecom attorneys. Sure bankruptcy and employment work and litigation might be hot for the attorneys now, but it won't be much help in the future when they cease to exist.

where the hell is Skadden?

There will be a continued flight to quality by this now smaller field of NY players. So, S&C, WLRK, CS&M and the other elites will be fine (with lower PPPs, to be sure). Downstream firms... not so much. This is bad news for corporate lawyers. Agree- worse than '02.

57 - you're way off. M&A deal flow is down 50% this year from last, and last year was a piss poor year as well. IPOs are down 82% from a piss poor year last year. You can be 10 steps removed from LEH or ML (or AIG, or Bear, or whoever) and still feel the huge slow down that the market contraction is causing. Hitting hours is going to be hard enough. Even if you do, getting any sort of bonus, when law firm revenue - even at decently insulated firms - is down over prior year, is going to be pretty damn challenging.

This is the worst melt down since the early 90s. Makes the tech bubble look like a mere hick up.

This is where the marginal players get killed. STB, K&E Cravath and Wachtell will not be dramatically impacted because they have institutional relationships (as opposed to personal relationships) with their clients.

Firms like Paul Hastings, Pillsbury Winthrop, or Winston Strawn who might be the "back-up" firm for a couple of MD's at these firms will be crushed.

Say what you will about Cadwalader but they got out in front of this disaster and might survive.

What have the aforementioned firms done to survive?

Lay-off a few associates and hope it all blows over?

It's far too late for that strategy now.

66- who are the other elites?

66- who are the other elites?

57 here,

What I meant was that legal business won't decline as much as if LH and ML still managed to survive (as opposed to being wiped off the map as they are now). Certainly legal business will decline, and its part of a larger trend, but I think LH and ML's disappearance are causing an undue frenzy (unless you work at law firms which heavily rely on LH and ML for business)

I hope this means the firms are making enough money to keep our bonuses at last year's levels!

Anyone have any insight here?

43 - no way. this is a liquidating 11 with all the valuable assets being sold off within the next three/five months. the committee will take over any litigation claims on the back end. i'd guesstimate weil gets a , high eight figure fee.

who gets the committee counsel gig? milbank?

What I don't understand about Sidley is how did a historically Chicago firm that generally represents traditional corporate America clients come to represent ML, which is a NY centric investment bank.

74, Sidley won the beauty contest when ML fired Skadden a few years back.

why would anyone go for Sidley over Skadden, especially when it comes to finance and investment banking?

It's not going to stop at just LH and ML. AIG and others may wind up dissapearing too. I agree with 68, sure the elite firms like Cravath and S&C will be fine, but what about everyone else...

#75 is making no sense. ML is Sidley's oldest and largest client, which means their relationship must have been established long before "a few years ago"

I believe Sidley Austin merged with Brown & Wood, and ML happened to be Brown & Wood's "oldest and largest" client. Correct me if I'm wrong.

78, ML came with Brown & Wood, and since then the representation has expanded, see 75.

Why didn't anyone hire Davis Polk? Why no Polk luvin?

"There will be a continued flight to quality by this now smaller field of NY players. So, S&C, WLRK, CS&M and the other elites will be fine (with lower PPPs, to be sure). Downstream firms... not so much. This is bad news for corporate lawyers. Agree- worse than '02."

I'm in the middle of this, and the above is 100% right. Go read the book "The Winner Take all Society." This is where S&C and Cravath and WLRK take over and the TTTs die hard. The top firms have strong inst'l relationships and will be fine (eg, S&C w/ Goldman Sachs, which isn't doing pretty well). And the firms with strong int'l exposure will excel especially (Skadden, S&C, DPW).

This is actually a good oppty for law students who can get CSM, S&C, DPW, Skadden, etc. These firms aren't going anywhere, and might, ironcially, do BETTER in bad times than in good, b/c now they're not competing w/ all the TTTs like Cadwalader.

76,

Sidley has (had?) a very strong finance practice. Just look at the league tables for issuance of debt. It shouldn't surprise you that ML would pick Sidley over Skadden.

i was actually under the impression that the ML connection came through Sidley, but either way, its a bedrock of Sidleys formidable corporate practice.

i am really curious to see how this impacts sidley- its a very financially stable place, and they have some wildly successful years, so I dont think anyone over at Sidley should be too concerned- but still, this has to hurt.

unless of course the new ML/BofA mass retains Sidley, which is completely plausible.

Which firms are best positioned to ride this out? I'll throw out a couple:

1. Quinn. No corporate practice=no downturn. I'm guessing they will surpass CS&M in PPP soon.

2. Kirkland. Strongest practices are restructuring and litigation. Never had a CDO/CMBS practice (to my knowledge), and corporate will pick up some work doing bankruptcy deals.

Who else?

#84: Sidley "wildly successful"?? Are you kidding? Compared to who? DLA? For some perspective, CSM/S&C have 2x the RPL and 2.5x the PPP of Sidley. Events like this are meant to weed out firms like Sidley in NYC.

It's true that this sucks for Sidley and Milbank. But anyone working there should take a deep breath. It isn't, as it may seem, the end of the world for these firms.

Re: Sidley. I'm under the impression that whatever benefit Sidley got from ML as its client has already run its course. In other words, this deal does nothing to change the status quo (i.e., structured finance is already dead).

85 - unless Quinn is doing contingency work, they're not overtaking CS&M or any $3MM+ ppp firm. High end corporate work driven by long-standing institutional relationships mean premium billing. Litigation keeps the lights on, but it's not paying for helicopter rides to your house in Montauk.

#88:　I think Sidley does way more than just structured finance work for ML.

Everyone's a winner Nixon Peabody and Schlomo!

89:

-Yes, Quinn does contigency work
-Quinn posted PPP over 3MM in 2007 (not sure what counts as a "partner" though . . .)
-At least for a while, I'm not so sure that premium billing for corporate will be as "premium" as it has in the past

Why is Dealbreaker such a better site than ATL? Better design. Better writing. Better commentariat. Better in every way.

Why does the legal profession exclusively attract such uncreative, entitled assclowns? By all accounts, Dealbreaker has a much smaller readership than ATL. And yet, what they lack in quantity, in quality they've cornered the market.

If karma is kicking their ass over risky investing, the legal profession is about to get sucked into the seventh circle of hell.

Quinn is a boutique, right? Just like Wiley Rain and WLRK? The question is how poorly the elite full-service NY firms do in this mess.

Everyone's a winner at Dealbreaker!

93 - You mean no-talent assclowns. But hell, we will all be working at Initech soon anyway.

90,

My essential point still stands, I think. I'm guessing the business Sidley typically receives from ML has already slowed and probably would have remained slow for the foreseeable future. You can't kill a dead horse.

Milbank and Sidley are FUCKED! They seriously may not survive this...

NY to 190!

Lets not forget that Quinn just got hammered in the Barbie/Bratz case. They won, but their fees were probably 5 times the judgment. That is not exactly going to help their reputation.

Why Milbank?

Why Milbank?

85 is right on about Quinn and Kirkland being well positioned. Kirkland has an added advantage by also being extremely strong in IP. I would reverse the order of those two firms given the diversity of practice areas at Kirkland (plus they are one of the elite PE shops in the country which will serve them well when the economy turns around), but the general point is well taken.

Yes, as someone who is supposed to start at Milbank in a month, I'd appreciate some insight into whether or not I may not have to buy the new clothes I was about to buy.

Weil's corporate practice now has $630 million in 363 sales to manage over the next year. Things will not be slow there.

BoA just announced that they are going to buy Milbank. I think Sutherland Assbill is advising on the deal with the Van Winkle Firm consulting on the deal as well.

That would be funny; BoA starts to buy law firms now, too.

MDPs, look 'em up.

Actually, it was White & Case that took ML from Skadden, and Sidley got it after their merger.

Anyone know how this would affect a firm like Cahil? I never see much news on them, but they're as tied into a lot of this business as anyone else. Are they one of the small players thats gonna get boned up or are they strong enough in what they do that they'll ride it out?

I stepped in some skadden once. Took forever to get out.

111: the sting of your skadden ding will dissipate with time.

I saw an earlier post said "Skaagen," not "Skadden." Isn't that the right spelling?

113 -- wrong on both counts. its Scatten and they love it in Germany.

105 -- you mean 630 BILLION in 363 sales. Cancel weekend plans.

104 -- I would definitely hold off on buying any new clothes if I were you.

Seriously, can someone fill us in on why particularly Milbank is in trouble?

117 -- ALL the firms are in trouble. The majority of BIGLAW billings have come from the i-banks. When they go away (and they all will in one way or another), the biggest source of revenue for firms will vanish.

Only the very strong will survive this. We are about to enter a VERY dark time.

109: Dumbass. Sidley merged with Brown & Root. White & Case is a separate firm and still alive and well.

"All" the NY-based firms. A lot of the non-NY biglaw firms don't rely as heavily on work from i-banks.

Then Skadden should be ok; they don't do i-banking.

Yay Weil!

I hear Wachtell is handling this pro bono.

True, Sidley is/was ML's first choice for underwriters counsel i its deals. Now ML will be owned by BoA. But I don't think the individual bankers involved will switch lawyers.
BoA just doesnt have the kind of investment banking volume ML does. (If it did, why would it want to buy ML instead of watching it fail?) The investment banking deals will still be done (mostly) by the same ML bankers. These bankers don't just use sidley, they use specific sidley partners. They aren't going to want to get used to new legal teams on their deals.
I agree, wall street work is slow now and will stay that way for the foreseeable future. But sidley's relationship with ML didn't vanish. It just changed its name to BoA.

124: BoA was a much larger player in i-banking than ML. How else could it accomadate all of ML's bankers? In any event, BoA likely won' t let its new bankers continue to use Sidley.

Does Cadwalader have any work left, now that Bear and Lehman are gone?

CWT is building a decent IP practice. Not that it will account for the lost revenues in cap mkts.

Guys, this is the end for biglaw as we know it. There will be massive layoffs in the next couple years, at least 100,000+ attorneys. Most of the smaller players will not exist when this is over with. Some schools will no longer have any oci programs. Market salaries will soon take a nose dive, probably going under $100,000 by the end of 2010. Times will be tough ahead.

Then again, I'm just a law student who has no background in finance and just made all of that up. THE END IS NIGH!

128=L2L

128- Nice troll.

125's first assertion is clearly wrong. A quick look at last year's league tables will confirm this fact in a second. In fact, reports indicate that it was only a year ago when BofA's chairman indicated he had all but given up on i-banking. See here: http://dealbook.blogs.nytimes.com/2008/09/15/purchase-of-merrill-fulfills-quest-for-bofa/

I can't speak to 125's second assertion, but it wouldn't surprise me if it is as baseless as the first one.

re: sidley being "wildly successful." Im not the one who posted that earlier, but i dont think he was comparing Sidley to the S&C/CSM crowd.

I think the point is that Sidley has done fairly well (in terms of revenue, awards, work, etc.) and is stable enough to ride out this storm- even if ML abandons them, which I have to agree, is HIGHLY unlikely. it makes no sense that the BofA folks would force ML people who are very happy with their sidley representation to switch

110 - the loss of AIG which supplies what seems like half of CGR's litigation billings would be a substantial blow.

Not sure how the corporate work woudl shake out. BoA has always been a big client so that might work out in their favor. Of course the market for high yield finance is in the toilet so when you specialize in that it's going to be hard.

Re: #84: Sidley "wildly successful"?? Are you kidding? Compared to who? DLA? For some perspective, CSM/S&C have 2x the RPL and 2.5x the PPP of Sidley. Events like this are meant to weed out firms like Sidley in NYC.

And that's the only way you measure the success of a firm? And this matters to you how, because you're a partner at either CSM or S&C? If you're an associate at either of these firms do you really care about how much money you're generating for your firm as long as your salary is the same as another attorney who works hundreds of hours less than you? For that matter, if you're like 98% of associates who will never make parter, do you really care about how much the partners at your firm make? Do you brag about these stats at dinner parties or something?

Thousands of people are out of work as a result of this disaster and you're talking about "weeding out" firms that employ thousands in their own right. You're a vulture...real classy.

110; it's too early to tell to what extent these recent events will hurt a firm like Cahill in a different manner than the other wall street shops. But one way or the other, there will be some rough times ahead.

86: I'd say that 134 hit the nail on the head, but just in case he or she wasn't speaking your language...

By your limited definition, Brobeck was "wildly successful." CWT is STILL wildly successful, despite the fact that associates consistently complain(ed) about life there and the fact that the axe had to fall on dozens of associates this year.

Perhaps "wildly" is not an accurate term to describe some firms' success. Sidley, for instance, is simply not a "wild" place. It doesn't borrow to pay its bills, nor is it very leveraged in terms of partners to associates (and yes, that means PPP's are half that of the other big NY offices and half that of its main peer in Chi). It's no secret that ML was the biggest single source of revenue for Brown & Wood; since the merger, it's represented a much smaller (though not insignificant) percentage of revenue. And as many commenters have already noted, ML will continue in some form (plus, Sidley, as do many top firms besides those featured in this story, does work for BofA).

The entire financial system is changing dramatically. These will continue to be turbulent times for most law firms, but those with broad practices, good reputations and careful management will be fine.

In the meantime, as noted by 134, can we please try to be at least remotely decent human beings on here, bearing in mind the fact that thousands of hardworking people are losing their jobs? Pretty please, 86, try not to give the public more reasons to hate lawyers, and don't make me regret having become one.

131, I think 125 was just talking about office space. Em's clearly right, however, that there's no way BofA is letting their brokeers use Sidley.

Correction: Harvey Miller is THE Dean of the Bankruptcy Bar and Weil Gotshal is the go to firm in a crisis

Your advice, please: I got summer offers from Weil, S&C, Debevoise, and K&E in New York; and Skadden and Sidley in Chicago. If Chicago firms aren't tied as closely to investment banks, would I be better off going to one of those over S&C? Or should I go with prestige and choose S&C, and hope that Goldman Sachs stays afloat?

139: yes, you should head to Chicago. They could use a bright summer associate like you. Keep up with the news, will you. GS/MS turned into bank holding companies, i.e., direct access to Fed Reserve. With them going down, you might as well head to the caves, with a bunch of canned food and a gun that you got as a present from your girlfriend's father when you proposed to her. Prestige has nothing to do with anything -- it's just quality work. But a bunch of it is done in Chicago, for . . . I don't know, TTT clients.