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]

* Does the Supreme Court's Stoneridge decision give the "getaway drivers" of securities fraud a free pass? [OverHedged]

* Apparently Green Bay fans really like the Packers. [SI.com]

* Miss Loyola 2L? Meet Kirsten Wolf. [WSJ Law Blog]

* Did Barack Obama receive an illegal endorsement? [TaxProf Blog]

* Speaking of Obama, his minister had this to say about Bill Clinton: "He did the same thing to us that he did to Monica Lewinsky." Can someone please remove the cigar from the national vajayjay? [Baltimore Sun]

* Gov. Romney wins Michigan. [CNN]

* Sen. Clinton faces challenge from "uncommitted." [CNN]

* NV Supreme Court overturns decision allowing Rep. Kucinich to debate. [MSNBC]

* Criminal prosecutions of Blackwater security guards would not be easy. [New York Times]

* Did CIA lawyers and officials implicitly sign off on the destruction of interrogation tapes? [Washington Post]

* Austrian court rules animal rights group can't have custody of chimp; appeal will be to the European Court of Human Rights. [AP]

* DOJ to investigate Tejada? [New York Times]

* Collected news coverage about yesterday's Stoneridge decision. [How Appealing (linkwrap)]

Earlier this hour, the Supreme Court handed down its eagerly anticipated ruling in the Stoneridge case. See collected links below, to posts by Lyle Denniston at SCOTUSblog and Ashby Jones at the WSJ Law Blog. The opinion itself is available here (PDF).

Lyle Denniston writes:

The Supreme Court, in one of the most important securities law rulings in years, decided Tuesday that fraud claims are not allowed against third parties that did not directly mislead investors but were business partnes with those who did. The 5-3 ruling came in Stoneridge Investment Partners v. Scientific-Atlanta (06-43).

Investors, the Court said, may only sue those who issued statements or otherwise took direct action that the investors had relied upon in buying or selling stock — whether that involved public statements, omissions of key facts, manipulative trading, or conduct that was itself deceptive. One impact of the decision is likely to be the scuttling of a massive $40 billion lawsuit against financial institutions growing out of the Enron scandal.

This news will be welcomed by many in the business community. But is it bad news for business litigators? Defending dubious securities fraud lawsuits may not be very sexy. But over the years, doing battle with the Milberg Weisses of the world has kept many a large law firm busy -- and profitable.

With transactional work drying up, is the Supreme Court's business-law revolution, cutting down on litigation against corporate America, coming at a bad time for Biglaw as a business?

Court limits securities fraud lawsuits [SCOTUSblog]
Stoneridge is in! Supremes Rein in Investor Suits [WSJ Law Blog]