Legal News

Bankruptcy Lawyers Shredding Bigtime . . . And Getting Paid, Too

By Nathan Koppel

Ever dream about preference actions or negotiating a life-saving DIP loan? Well, young 3L, now’s the time to grab the board and — like Master Laird — ride the wave.

It’s no secret, of course, that companies are filing Chapter 11’s like mad, but a WSJ piece today looks at how much it pays to be a top restructuring professional in today’s lateral market.

It pays millions is the short answer. Take Luc Despins, a veteran of many big bankruptcies, including Enron and Lehman Brothers. Paul Hastings last year paid him more than $5 million per year, guaranteed for three years, to lure him from Milbank Tweed.

Raniero D’Aversa Jr., who used to be a top bankruptcy partner at Mayer Brown, was paid about $2.5 million last year to join Orrick Herrington ─ a 25% pay raise for D’Aversa.

A couple of years ago it would have been impossible to imagine firms throwing professional-baseball money at bankruptcy lawyers, who can not only command fat salaries on the lateral market but are getting paid more just to stay put ─ because of the risk, of course, that they could jump to a competitor.

Top lawyers in New York City and Wilmington, Delaware are particularly feeling the love, as headhunters clog their voice mails with offers.

“When you see headhunters descending like locusts on any bankruptcy professional who can fog a mirror, then you know the market is a little frothy,” says John Bicks, a New York bankruptcy partner with Sonnenschein.

Down in Houston, Hugh Ray, the 66-year-old head of restructuring at Andrews & Kurth, says he surprised that even he’s getting barraged by recruiters. “I’m getting calls all the time, and I’m an old man,” he says. “It makes your inner child feel loved.”

Full post as published by Law Blog - WSJ.com on February 25, 2009 (boomark / email).