donspartners generally get loans from banks at the beginning of the year to pay overhead — rent, associate salaries, etc. As the year goes on, they (hopefully) collect massive fees from clients, paying off the loans (and paying themselves out). Apparently, this is how your local ice cream truck driver — or maybe cupcake truck driver — operates his business as well.
Obviously, the model doesn’t work when banks aren’t willing to lend. But today Am Law reports that JPMorgan is poised to step up its law firm lending practice. The move could result in additional lines of credit open to law firms:
JPMorgan Chase is beefing up its profile in lending to the legal industry. The bank has hired the former head of Citigroup’s law firm group.
Lester Pataki, who led the legal industry specialty group in Citi’s private bank arm, is joining JPMorgan as the national practice leader and chairman of its law firm group, the bank announced Monday. JPMorgan says it hopes to capitalize on Pataki’s strategic skills to help it boost its presence in the area.
Isn’t JPMorgan one of the banks that is doing relatively okay? You can almost hear management committees all across the law firm landscape saying “Gimmie, gimmie, gimmie.”
More details after the jump.