It would hardly be an overstatement to say that the 2008 debacle of Wall Street hit the world of BigLaw like a tsunami. In October of that year, Thelen’s management — which was already on its last legs after its ill-fated acquisition of Brown Raysman only one year earlier — began parcelling out entire sections of their firm. At the same time Heller Ehrman, whose partners had voted to dissolve on September 26, was closing its cafeterias and starting to remove coffee machines from its numerous offices nationwide. Like falling dominoes, one firm after another began throwing as much baggage overboard as possible in seeming desperation. By the end of the month, Katten had laid off 21 attorneys, Sonnenschein 24 and Clifford Chance 20. Even firm captains were jumping ship. Thacher Proffitt’s Vice Chairman lateralled to Greenberg Traurig and Thelen’s Chairman was reported to be in talks to join Howrey. Firms across the board were scaling back and in some cases eliminating their summer programs outright, forcing law students everywhere to consider debt forgiveness programs and alternative careers even before graduation.
As the US Army engages in introspection with respect to its internal oversight in the wake of the Fort Hood massacre and the SEC does the same after the Madoff disaster, the government is clearly announcing that it will require no less of private sector supervisors than it will of itself. In a recent example, the SEC is compelling the former general counsel and CEO of San Francisco investment bank Merriman Curhan Ford to pay for its failure to properly supervise David “Scott” Cacchione, who pleaded guilty to fraud in March for emailing customer accounts to William “Boots” Del Biaggio III in connection with a scheme to scam banks out of $50 million worth of loans: “When you find major frauds at a broker dealer like this, you’re going to naturally look at ‘Where is the supervision?'” said Michael Dicke, the enforcement director of the San Francisco office.
Last night, as America overwhelmingly expressed its desire for change, New York erupted in celebrations reminiscent of that glorious day when the Mets defeated Baltimore for the World Series title in 1969. All the euphoria aside, though, we are now in the midst of a political tsunami which rivals its economic counterpart in intensity, and the combined impact of these storms only remains to be seen.