As the global economy has stabilized and grown in the decade since the financial crisis, it seems counterintuitive that Big Law has remained busy in the corporate restructuring and bankruptcy arena.

After all, conventional wisdom suggests that a restructuring group acts as a sort of security blanket for a large firm: a practice that can heat up when the economy takes a downturn, providing much-needed, countercyclical revenue during stretches when corporate dealmaking is less active.

“You could think of a restructuring practice as a hedge for our firm,” says James Sprayregen, a bankruptcy partner at Kirkland & Ellis, a major player in the restructuring realm. “Being a hedge means you might not always be that busy because of macroeconomic circumstances.”

Sprayregen adds, however, that his firm's restructuring practice has remained busy over the past several years, despite an upswing in the economy. In part, that's due to the reputation his firm has sought to build as go-to counselors for companies in distress, and because Kirkland's practice focuses less on nabbing singular, large cases, and more on having the ability to take on several cases over long stretches of time.

“We have a brand and a practice [where] we want the next 100 or 200 deals, not just the first deal,” he says.

Lawyers at two other firms with strong bankruptcy groups, Weil, Gotshal & Manges and Jenner & Block, offer a similar assessment. They, too, say there's been plenty of work to go around in recent years, even as behemoth, recession-related bankruptcies, such as that of Lehman Brothers Holdings Inc., are finally coming to a close, and as distressed debt investors in the hedge fund and private equity space push for shorter in-court restructuring efforts.

The reasons are, to some extent, situational. Even as the economy has recovered from the global financial crisis and picked up steam, certain industries have hit rough patches. Bankruptcy lawyers point to a wave of restructurings in the oil and gas production industry that began in 2014 with a drop in oil prices and continued through last year. And while the oil and gas sector has largely recovered alongside rising commodity prices—“80-plus percent of that trend has gone by the wayside,” Sprayregen says—the retail industry has taken a huge recent hit, something that's widely expected to continue.

“The economy is not like a calm pool of water. It is a turbulent sea where some do well and some do not do well,” says Ronald Peterson, a bankruptcy partner at Jenner & Block. “There is a lot of uncertainty out there right now.”

Running a successful restructuring practice through those uncertainties has required a measure of flexibility and adaptation to different roles involved in the restructuring process. It helps to maintain a core group of clients, Peterson says. Discussing the evolution of his own practice, he says that a couple decades ago he focused mostly on debtor-side work, which involves guiding a distressed company that's restructuring its debt or reorganizing operations through bankruptcy, before branching out to creditor representations.

More recently, Peterson has found a niche as a bankruptcy trustee, a role that generally provides a steady stream of fees, but which can also spin out work for litigation specialists at the firm in clawback and other kinds of disputes. Among other cases, Peterson served as the trustee for the estate of Lancelot Investor Funds LP, one of the largest “feeder funds” that funneled money to Thomas Petters, a former Minnesota businessman who was sentenced in 2010 to 50 years in prison for running a $3.5 billion Ponzi scheme.

“My strategy has always been to have a core group; we're always going to be doing counseling on the business side,” Peterson says. He adds, however, “We do try to reinvent ourselves.”

Peterson and other bankruptcy specialists also note that they've had to adapt to evolving ways of handling corporate restructuring projects. Those changes are due, in part, to “a recognition by restructuring professionals that the Chapter 11 process has become too expensive” and too time-consuming, he says.

Gary Holtzer of Weil, Gotshal & Manges.

Gary Holtzer, co-chairman of Weil's business finance and restructuring practice, explains that private equity and other investors are now quite savvy about the upsides and drawbacks of an in-court restructuring effort. Those debt holders, he says, often conduct cost-benefit analyses to figure out whether a Chapter 11 proceeding is necessary to reorganize a struggling business' operations, or if it's more expedient to try to restructure their financial debt quickly in court, and then emerge from bankruptcy to start retuning a company's operations.

But while those pressures on distressed-debt investors might lead to a greater number of out-of-court restructuring deals or pre-arranged plans that limit the in-court time of a given bankruptcy case, it doesn't necessarily mean leaner times for bankruptcy lawyers. Holtzer and fellow Weil restructuring co-chairman Ray Schrock point out that a restructuring effort that takes place mostly outside of bankruptcy court can involve months of negotiations—or worse.

“The measure of how fast the case is is a little fictional,” Holtzer says. “When you talk about a shorter case, it might be just as long from inception.”

Weil's practice picked up work on some of the largest cases to arise from the financial crisis, including roles as debtor's counsel to Lehman Brothers and Washington Mutual Inc. Even as those cases have wound down, though, the firm's practice leaders say they've maintained plenty of work to keep their group occupied. Among other cases, the firm scored a lucrative role representing beleaguered air bag manufacturer Takata Corp. in a Chapter 11.

For Weil, at least part of the secret to staying busy during an upswing in the economy might have to do with the range of work that it takes on. As the Lehman, WaMu and Takata cases suggest, the firm has done its share of debtor representations. But if those cases prove to be fewer and further between, Weil also has a group of lawyers who focus on representing creditors in restructuring situations, creating a steady stream of business that can help even out the ebbs and flows, according to the firm's practice heads.

“Even when you don't have those monster deals, you have the flow of work from those repeat customers,” Holtzer says.

Schrock adds that Weil's group is also well enough established, and has enough expertise and personnel, to pivot into big bankruptcy cases when they come along.

“We have the right flexibility in the firm to be able to absorb a [large-scale] matter,” Schrock says.

Although the Weil practice leaders and other bankruptcy lawyers acknowledge that large-scale, long-running Chapter 11 cases might be less attractive to investors and others involved in corporate restructurings, they also stress that the right approach to a given restructuring effort depends heavily on a particular company and the types of industry headwinds it's facing.

“The dynamic of the business itself is very important,” Holtzer says.

Kirkland's Sprayregen says, as a general matter, the recent wave of oil and gas bankruptcies were driven largely by a drop in commodity prices, rather than a group of businesses that needed to rethink their operations. Instead, many of those companies needed to offload debt and improve their balance sheets, steps that can be taken more easily through a prepackaged plan that aims to get in and out of bankruptcy court quickly.

The recent string of brick-and-mortar retail bankruptcies, however, stems from a more existential threat to the industry, including technology behemoths such as Amazon. Those cases, which often involve negotiations with landlords that own retail space, may not be as conducive to a prepacked plan, Sprayregen says.

“When the cases come to us, we need to explore the facts,” he says, “and do what's most efficient and what's best for the company.”