Monday, September 15, 2008

Law Firms: Mobilize as Wall Street Reels

As the business week opens, financial news from Wall Street is almost unprecedented. In dual unfolding dramas over the weekend, the venerable 158-year old Lehman Brothers filed for Chapter 11 bankruptcy while the thundering herds of stockbrokers at Merrill Lynch ran right into the arms of buyer Bank of America.

What does this mean for law firms and litigation experts?

The Rainmaking Lady sees at least two ways to approach the situation.

First, economic pain is unfortunately likely to increase across a number of industries. In addition to financial services, structured finance and real estate, the automotive, hospitality, and municipal sectors are bound to continue to suffer from depressed economic conditions. The question becomes, how can law firms best serve their clients in this area?

As adept "problem solvers," opportunities abound for proactive lawyers to identify issues faced by clients, frame the pros and cons of various options for action, and help clients implement reasoned responses. This may be a good time to strengthen client relationships.

Second, this period of tumultous market change provides attractive opportunities for those firms in the enviable position of having a strong balance sheet and cash to invest. Like the Bank of America acquisition of Countrywide and now "Mother Merrill," bargains abound for well-positioned buyers planning strategically for the long-term.

Of course there are many unknown consequences to be revealed in the days and weeks ahead. Will AIG find funding? What will the impact be on hedge funds? How will pension funds, retirees and other investors rebound from the sudden loss of billions in equity recently considered to be safe?

The litigation front is not difficult to anticipate; potential disputes will end up in court as the multitude of parties suffering financial losses seek compensation. This could be good news for both law firms and experts, in a perverse sort of way.

Bottom line, now is the time for law firms and litigation experts to reach out to clients and prospects. Ask the "SPIN" type sales questions: a) what is your Situation?, b) what Problems does this create for you?, c) what is the Impact or Implications for your firm?, and d) Need-payoff questions to determine the value of a potential solution to the client.

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