Tuesday, September 16, 2008

Calling all Clients!

How Law Firms can Strategically Address Wall Street Turmoil

When I started writing this post on the morning of September 16th, the markets were relatively quiet in anticipation of the Fed's afternoon meeting. In fact, the Dow actually ended the day up 141 points.

Later in the day, however, Christopher Condon reported for Bloomberg.com that Reserve Primary Fund (Ticker RFIXX), a money market fund with $62 billion in net assets, wrote off $785 million of debt issued by the now bankrupt Lehman brothers. This devaluation put the net asset value at below $1.00 ("breaking the buck") and causing the money market fund to delay some redemptions by up to 7 days. My client Patti Spencer, Esq., writes about this in her Pennsylvania Fiduciary Litigation blog.

The point is that there will be many predictable as well as unforeseen consequences of the turmoil in the financial markets.

Now is the time for law firms to take strong action:

  1. Determine client accounts that are "at risk"
  2. Identify actions the firm can take to help the strong clients minimize risk
  3. Step up the collections effort from accounts that are slow to pay
  4. Look for undervalued assets in the market. These are opportunities for clients or the firm.

"Calling all clients" (at least the priority accounts) is a good strategic campaign to document clients' current situation, then track it over time. More tomorrow.

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