Big Law: Which Firms May Miss Bear Business

[WSJ_law_blog]

The planned sale of Bear to JPM knocks a major client from the legal marketplace. But let’s begin on a positive note. Some of Bear’s lawyers and connections to law firms may migrate to J.P. Morgan, say attorneys, who note that J.P. Morgan now uses law firms with historical ties to other banks previously acquired by JPM. And most top law firms, attorneys says, do a better job than in years past of spreading their work around, so that they are not overly exposed should one client go under.

Still, attorneys say, law firms often suffer a net loss when their clients merge or become acquired. “My assumption is that many of the folks handing out legal business at Bear Stearns may not be doing so in the future,” says James Jones, a consultant at Hildebrandt and a former managing partner of Arnold & Porter. “If I were a firm that had done a lot of work with Bear Stearns, I’d be concerned.”

So which firms might lose out in the Bear meltdown?

Latham & Watkins

In a 2005 profile of the firm, partner William Voge told American Lawyer that Bear Stearns had generated $15 million in revenue the prior year. Latham, to cite one deal, advised Bear in connection with the 2006 initial public offering of Hirco, an Indian real estate development group. (Latham did not return calls for comment.)

Skadden Arps

A host of Skadden attorneys have counseled Bear in corporate and litigation matters (including this weekend’s deal). Last year, the firm represented Bear Stearns Merchant Banking and other financial firms in the consortium’s $1 billion investment in Ironshore Inc, a newly formed insurance company. (Skadden was not immediately available for comment.)

Cadwalader, Wickersham & Taft

Cadwalader will also enjoy a short-term boost from Bear right now, since uber partner Dennis Block is also counseling the bank in the J.P. Morgan deal. But Bear has funneled a lot of work to Cadwalader in the past, and to Block in particular. He advised Bear in connection with the failed merger between Hughes Electronics Corporation and EchoStar Communications, to name one matter. (Cadwalader declined to comment and Block did not return a call for comment.)

Weil Gotshal

The firm has represented Bear Stearns in a slew of deals, including in the merger last year between Accredited Home Lenders, a mortgage company, and Lone Star Fund. (Weil did not return a call for comment.)

So, who are among the winners?

WilmerHale would seem to be one obvious contender, given that its former partner, Steve Cutler, is the general counsel of JP Morgan. A person familiar with Wilmer says it does a significant amount of regulatory and litigation work for the bank. But Wilmer also did regulatory work for Bear Stearns, underscoring the fact that it will take time to get a precise score for the winners and losers.