Lehman's legacy – many law firms are still feeling the effects of the world's largest bankruptcy
Six years ago this month, Lehman Brothers collapsed into bankruptcy – in one move becoming the biggest corporate failure in history and plunging the global financial markets into turmoil.
September 10, 2014 at 07:07 PM
3 minute read
Six years ago this month, Lehman Brothers collapsed into bankruptcy – in one move becoming the biggest corporate failure in history and plunging the global financial markets into turmoil.
Financially, the UK and global legal market taken as a whole has emerged relatively unscathed; as our latest analysis of the financial performance of the 50 largest UK law firms demonstrated last week, combined revenue across the group reached a new high of £14.4bn in 2013-14 – more than £2bn more than the equivalent figure in 2008.
But in other respects many firms are still struggling to reposition themselves to meet changing client demand, both in terms of the type of work they require external advice on and the associated cost and mode of delivery.
While the collapse of Dewey & LeBoeuf in 2012 is likely to be a failure on a once-in-a-generation scale, as is hopefully the case with Lehman, the current merger talks between Morgan Lewis and embattled US rival Bingham McCutchen, revealed this week by Legal Week, demonstrate the challenges some firms are still facing. Size and scale by no means guarantee immunity.
At a more mundane level, the need for firms to get their house in order in the wake of the crisis has continued to speed up the move away from a traditional partnership model towards a more corporate approach to management – as shown by planned moves by Berwin Leighton Paisner and Clifford Chance to try to centralise power within a tighter management group.
For some though, Lehman's collapse is not just an event from history. For the legal team still actively winding down the investment bank's business in Europe and helping meet financial obligations to creditors, it is both a job and a business still being successfully run all these years later.
In our cover story this week, Huw Merriman, one of the in-house lawyers in charge of the clean-up operation in the UK and Europe, talks candidly about what it was really like – both from a personal and professional perspective – when the bank collapsed and the work that has gone on behind the scenes subsequently.
Hopefully the experience he and his team went through in September 2008 will not be shared by many others in the future. Regardless of this, given the size of the task and the impact Lehman has had around the world, it's a story that makes for interesting reading.
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