Practice Insights: Bankruptcy
Bankruptcy lawyers represent creditors and debtors in financial restructurings, workouts, bankruptcy cases and other matters involving financially distressed transactions. Bankruptcy law is one of the hottest practice areas in the legal field today and law firms across the country are expanding their bankruptcy and restructuring practices.
J. Andrew Rahl, Jr., a partner at Reed Smith and co-chair of its Commercial Restructuring and Bankruptcy Group, shares the ins and outs of practicing bankruptcy law in the interview below. Rahl has been named one of the nation’s Outstanding Bankruptcy Lawyers six times by Turnarounds & Workouts. In 2007, The Deal named him one of the top bankruptcy lawyers.
Rahl is also a frequent speaker and lecturer throughout the United States and in Europe and is quoted frequently in the financial press on bankruptcy, restructuring, and related investment matters.
1. Can you comment on employment opportunities in the field of bankruptcy law?
Employment opportunities are growing in this field. This growth is a reflection of the credit crunch and the economic cycle of bankruptcy and restructuring lawyers.
It’s hard to speculate about the long-term economic cycle but I suspect the bankruptcy boom will last a least a couple of years. Many law firms are expanding their bankruptcy practices. We recently added a new associate to our group.
2. How did you get into the field of bankruptcy law?
I’ve been doing this a long time. After graduating from law school in the middle of a recession I went to a firm with a bankruptcy and restructuring practice and found it very interesting. I looked for opportunities to practice bankruptcy whenever I could and by 1990 I was doing bankruptcy full time.
3. What do you enjoy most about practicing in the area of bankruptcy?
Corporate bankruptcy touches on almost every aspect of business law. In addition to knowing the bankruptcy code, you have to become a generalist in terms of mergers and acquisitions, corporate and securities, employment, real estate and many aspects of regulatory practice. Practicing in the area of bankruptcy is a lot of fun and every case is different.
4. What challenges are unique to the practice of bankruptcy law?
Bankruptcy law lends itself to people who perform well at the last minute under pressure. The bankruptcy timeframe can be a lot shorter than typical litigation. Some litigation goes on for years while many aspects of bankruptcy involve discreet issues that get resolved within a short time period.
5. What tasks are typically performed by an entry-level bankruptcy attorney?
What happens in bankruptcy depends on the nature of the matter. It’s not unusual in bankruptcy for junior lawyers to interact with clients and draft legal documents. For example, a first-year lawyer who recently joined our firm was quite pleased to spend three days working on a motion to lift the automatic stay with respect to the security interest of a client who is an equipment lender. He will also participate in arguing the motion.
6. What skills are needed to practice in the area of bankruptcy?
One of the interesting things about bankruptcy practice is that it’s a hybrid between litigation and transactional practice. You need both the skills of a litigator and the skills of a transactional lawyer. It doesn’t hurt to have good contract and corporate drafting skills as well.
Analytical skills, the kind you learn in law school, are necessary. Speaking ability is important as bankruptcy lawyers spend a significant percentage of their time on their feet arguing in court. Writing ability is also necessary since bankruptcy lawyers draft pleadings, briefs, motions and other documents.
7. How can a new attorney break into this field?
Timing is everything in bankruptcy. It is cyclical and the economy does have an impact on bankruptcy work. Now is the time to be looking for opportunities in bankruptcy.
New lawyers interested in bankruptcy should look for a firm that has a meaningful bankruptcy practice. Firms are busier now with bankruptcy work.