We wondered when the media might discover that law firms are healthily integrated into the financial system and whether the part they play in deals, approving bonuses etc would also become an area for government scrutiny with regards to accountability
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Above The Law blog in the US appears to be kicking off the debate with this post yesterday after? the story, Bank Case on Bonuses Shifts Focus to Lawyers appeared in the New York Times
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They write:
The Mainstream Media Is Aware That Law Firms Exist, Right?
Tuesday, August 25 – By Elie Mystal
Will the mainstream media ever hold law firms accountable for their roles in the global financial crisis? Probably not. Relatively speaking, only a small sector of society understands that Biglaw firms played a significant role making “toxic assets” lucrative and legal. Without attorneys, bankers wouldn’t know their tranches from their enhancements.
Too few people can get their head around what actually happened to cause the market crisis. But the public — the average American citizen — can wrap its mind around the concept of bonuses. I think it goes something like this:
Bonuses, BAD. Wall Street, BAD. Pitchforks and Torches, GOOD.
Can the mainstream media latch onto that?
Today, it looks like the New York Times had the following thought: “hey, didn’t Bank of America get advice from counsel about their bonuses!”
Responding to questions posed by a federal judge, Bank of America and the Securities and Exchange Commission said the bank had relied on its outside lawyers to fill in the fine print in that firm’s controversial marriage with Bank of America.
That meant that lawyers at two firms — Wachtell, Lipton, Rosen & Katz as well as Shearman & Sterling — handled a decision to keep Merrill’s $3.6 billion in bonus payouts a secret from Bank of America’s shareholders, according to the filings.
Okay, I’m actually giving the Times too much credit. Judge Jed S. Rakoff wants to know more about the role of Wachtell and Shearman. But the Times still gets credit for reading.
Will these types of inquiries lead anywhere? Law firms have mastered the art of avoiding public scrutiny for their roles in the struggles on Wall Street. It’s probably better for lawyers if things stay that way.
http://abovethelaw.com/2009/08/law_firms_boa_merrill_bonus.php
