Sub-Prime Crisis Means More Work for Lawyers
It looks like the sub-prime meltdown's fallout will keep lawyers busy for a while. A report by Navigant Consulting says the number of sub-prime-related lawsuits filed in 2008's first quarter (170) nearly matched the 181 filed during the complete second half of 2007. The firm believes the number of cases "will soon surpass" the 559 filed by the Resolution Trust Corp. during the savings-and-loan crisis of the 1990s.
That, of course, means more billable hours for the attorneys involved, and those might comprise a relatively wide group. In addition to cases brought by borrowers and investors - including class actions - financial institutions are suing each other and form mortgage company employees are seeking unpaid overtime or redress for inadequate notice before they were let go. "The breadth of the litigation was striking," Jeff Nielsen, a Navigant managing director, told Portfolio.com
The New York Times Dealbook sums things up nicely:
Unfortunately for litigants, staffing of federal courts typically does not fluctuate with volume, and the rising caseload means that legal proceedings are likely to drag on for years.
And all that means that the lawyers lucky enough to represent borrowers, banks and assorted buyers or sellers of mortgage-backed securities stand to rake it in for quite some time.