A very funny post from the Wired GC
The Wired GC can now report the results of a 3 month long investigation into governmental support for major law firms.
Discussions at the highest levels of the new administration have resulted in a working plan. It has been slow going due to the requirement that no lawyers work on it.
While still subject to change, the broad outlines can now be revealed:
1. Driven by a need to keep the legal industry from imploding. Since so many large firms are needed to document other bailouts, the government wants to bail them out first.
2. All firms can’t become 100% bankruptcy or Madoff litigation houses. There will likely be some M&A deal flow later in 2010, and there’s talk of an IPO or two in early 2011.
3. Alternative fee arrangements are still a wildcard. The government has been told in no uncertain terms that many firms would rather fold than go away from hourly billing. But a recent government offer to fund the pensions of equity partners is garnering strong interest from certain firms.
4. Some “shotgun” marriages may be in the offing. A few link ups of national and international firms could be required by the government as a condition of bailout funding. Early in the process, it looked like some UK firms would be in the lead, lately it’s not as clear. Also, a lot of the best names have been taken, and the headlong rush to confusing acronyms seems to have played itself out.
5. Equity partners will have to share the pain. The government is requiring some senior-level sacrifice. It’s not certain that any managing partners will have to step down. But at least one major firm has told its 7-series BMW drivers that they will have to roll back to a 5-series (for their second car). Any requirement to “Buy American” has been a non-starter.
6. Some additional restructuring of firms will be required. Partners without clients are getting a tad nervous. Here are some telltale signs for the slow-on-the-uptake: (a) you are given a really hot assignment as “activities chair” for the next firm retreat; (b) people are coming into your office and taking measurements; (c) your emails to the managing partner are being returned as “undeliverable”; and (d) your code for the Xerox machine says “3 copies left.”
7. A plan in search of a name. While this train seems to be leaving the station, there is no legal industry bailout moniker yet etched in stone. Two leading alternatives, according to our sources: (a) Lawyers Annuity Protection Directive (Operated Governmentally); and (b) Partner Assets Recovery Scheme (National Income Protection).
The negotiations are very fluid, and concerns about possible public reaction to yet another government-funded bailout could still derail these plans. Still, one new government appointee told us on deep background: “We just can’t let the lawyers down. They’ve been there for us forever.”
Very appropriate given today's date.