Wednesday, March 19, 2008

The Bear Essentials: Balancing the Eggs in Your Basket

The Wall Street Journal today includes a story entitled "Law Firms Likely to Miss High-Fee Work for Bear." Several large law firms may find themselves at risk of losing business on the Bear Stearns account as the firm becomes part of JP Morgan Chase, according to the report. Cadwalader Wickersham, Skadden Arps, Latham & Watkins, and Weil Gotschal are among the firms mentioned as historically providing legal services for Bear Stearns.

One week ago today Bear Stearns stock was trading at $65 per share, to be followed by a proposed fire sale of $2.00 per share less than 4 days later. One Bear Stearns trader who read about the deal in the paper said he was sure the offer price was a typo.

What if the unimaginable happens to a client of your law firm? Do you have 1 or 2 large accounts that represent a significant share of your business? The old adage "don't put all your eggs in one basket" holds true for law firms as well. If you determine that the misfortune of a small number of accounts can cause great potential harm to your practice, now is a good time to work toward rebalancing your portfolio of clients and/or practice areas .

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