We mentioned yesterday that Simpson Thacher has been chosen to advise the government on the massive $700 billion bailout plan. They were chosen on Friday and are already racking up billable hours on it.
Six other firms were approached by the Treasury, but only two expressed interest. Zach Lowe at the American Lawyer reports:
Cleary Gottlieb Steen & Hamilton confirmed Tuesday that it was one of the six firms the Treasury Department considered as candidates for a role as lead adviser on the $700 billion bailout plan.
Only two of those six firms pursued the work that eventually went to Simpson Thacher & Bartlett.
Four of the six law firms have confirmed that the Treasury reached out to them: Simpson, Cleary, Davis, Polk & Wardwell, and Wachtell, Lipton, Rosen & Katz. The two others, including the firm the Treasury turned down, remain unidentified. Two of the most likely candidates — Sullivan & Cromwell and Latham & Watkins — would not comment on the matter. A third, Shearman & Sterling, has not responded to messages.
Lowe tracked down a lawyer at one of the firms that rebuffed the Treasury. The lawyer admitted it was “prime work,” but that they feared not being able to represent “regular clients on the program.” In the cost-benefit analysis, the potential billable hours to financial services companies clamoring for bailout money must outweigh the government possibilities.
But Simpson Thacher is not sweating it:
Richard Beattie, chairman of Simpson Thacher, says the Treasury did not put any pressure on the firm to drop clients and that the firm is not concerned about losing business.
“They did not say that,” Beattie says. “It’s ridiculous. We represent JPMorgan Chase and would not give up a client like that.”
AmLaw reports that Simpson’s other financial clients include Washington Mutual (now part of JPMorgan Chase), Lehman Brothers, and AIG. Given that list, we can see why the government is the more attractive client at the moment.
Cleary Confirms It Rejected Lead Adviser Role on Federal Bailout Plan [American Lawyer]
Simpson Thacher Wins Treasury Sweepstakes, Four Firms Decline [American Lawyer]