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RAMSTACK: Plunge also hits lawyers

By Tom Ramstack | Monday, September 22, 2008

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Above the Law COLUMN:

As stock-market investors watch their investments plunge from financial firm failures, lawyers are worrying about their job security.

Financial firms are major employers for lawyers.

"The impact on the credit market means less deal flow, which means less income flow," said Justin Bernold, director of legal recruiting firm Lateral Link. "Associates [lawyers] are beginning to see more turmoil in the financial market trickling down into their careers."

Lateral Link surveyed about 830 lawyers and law students nationwide about how the Wall Street meltdown of the past two weeks will affect them.

About 42 percent of lawyers say collapsing financial markets are likely to damage their careers, according to the survey.

The results varied between regions. In New York, 55 percent of lawyers said their careers would be hurt, but only 37 percent were worried in Washington.

Some of the New York refugees are knocking on the doors of Washington law firms, according to Lateral Link.

"I think a lot of folks are just looking nationally wherever they can," Mr. Bernold said. "D.C. is one of the first places they would look because it's relatively close, relatively easy to waive in and a large legal market." "Waiving in" refers to getting a court's permission to practice law in a different state or jurisdiction.

For some firms, the Wall Street meltdown creates merely a shift in priorities. The portion of their business that deals in contracts and securities might be falling, but their bankruptcy business is picking up. They also expect to handle more litigation from investors anxious to sue over their dropping stock and bond values.