From the Times of Trenton:
With real estate activity in a deep freeze, a deviation of the famous mantra is being whispered in law firms throughout New Jersey: Follow the debt.
McCarter & English, the state’s largest law firm, will announce today it’s ramping up its workout practice by hiring Charles Stanziale, one of the state’s top bankruptcy lawyers, to concentrate on what promises to be a growth industry with the national and state economy in a recession.
“In these uncertain financial and economic times, there is an increased demand for lawyers with expertise in restructuring and debt management,” McCarter & English chairman Drew Barry said.
Lawyers, too, go where recessions take them. Personal bankruptcy filings are skyrocketing this year, and corporate filings are trending up, though not as dramatically, being that there is historically a one-year lag between an economic downturn and corporate insolvency.
Many McCarter real estate attorneys, who in recent years were consumed with acquisitions and closings, will now be assigned to help Stanziale liquidate real estate holdings in bankruptcy cases, Barry said.
“The current lack of real estate work will be made up for with restructuring work,” he said.
Cole Schotz in recent months has hired eight insolvency lawyers, bringing the number of that team to more than 30 in New Jersey, Wilmington, Baltimore and New York. They are looking to hire more, Sirota said.
One trend Sirota sees in the current economic downturn is a bit more humility from banks who are trying to keep their balance sheets in order.
“The (bankruptcy) filings would be even more fast and furious, except for the fact that lenders are now more willing to settle than go through liquidation in the courts,” he said.
Scrivo said his firm’s “robust” bankruptcy practice has recently added two attorneys in its Philadelphia office and is “always looking” to add more, particularly in this economic climate. The firm is involved in several commercial foreclosures that are headed to bankruptcy, he said.
“I’m guessing,” he said, “we’re going to see more.”