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Is It Time to Brush Up On Bankruptcy?

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By Kevin Fayle on May 26, 2009 4:00 PM

Lawyers have never been afraid of indulging in schadenfreude, and now here's another good reason to take some joy in the misfortunes of others: While workers and investors at large bankrupt companies are suffering, the lawyers for the companies are working overtime and making a killing off of the companies' bankruptcy claims.

In fact, according to the New York Times, if auto giant GM ends up declaring bankruptcy (as everyone expects they will), the in-joke among lawyers is that there won't be enough bankruptcy attorneys to handle it.
This is both a comment on the size of GM's potential bankruptcy, which would be the largest in US history, and the fact that two other huge corporations, Lehman Bros. and Chrysler, have also recently declared bankruptcy and enlisted the services of bankruptcy attorneys at top firms.  Add to that the number of lawyers hired by the government to deal with its stake in these bankruptcy proceedings, and there are precious few bankruptcy attorneys left to deal with the gargantuan GM filing.

Now, if you're reading this, there's a good chance that you run your own firm or help to run a small to midsize firm.  What, you might ask yourself, do the enviable woes of a bunch of BigLaw bankruptcy attorneys have to do with me?

Well, the sharp increase in the number of hours available for bankruptcy attorneys, combined with the growing trend of BigLaw firms parceling out work to small and midsize boutiques in order to cut costs and the fact that there are precious few BigLaw bankruptcy attorneys to go around, means that small to midsize firms have an excellent opportunity to grab up some of the bankruptcy work that's going to be coming up shortly.

So go ahead and smile when you hear about a company going bankrupt - schadenfreude's just good business these days.