Obama Presidency is Good News for the Legal Profession
In my opinion, the election of Barack Obama as President brings all sorts of good news for the legal profession.
Regulatory law. After 8 years of minimal regulation of business (except for crackdowns on illegal aliens), lawyers with a regulatory practice will see much more activity in their practices. If your clients include banks, private-equity funds or large oil companies, they will be targets of the new administration and will need plenty of counsel from you.
We will once again see trials, which had nearly disappeared from America's courts. This is good news for defense and plaintiff lawyers alike. Tort reform has been so effective that there are hardly any trials any more. The National Center for State Courts reported that the number of jury trials dropped 44% in the last 10 years. The movement has killed many areas of personal injury practice by limiting damages and making it difficult to file a cause of action to begin with. But the Republican party and its corporate support base for tort reform is shattered. Meanwhile the American Association for Justice (formerly ATLA) will actively work to make it easier to bring
- Product liability cases
- Class actions against pharmacy companies
- Limit companies' use of federal regulations as a shield from litigation under state law
- Eliminate mandatory-arbitration clauses in consumer contracts.
Health Insurance Companies. If your firm represents insurance companies that write health care coverage, you can expect to advise them on a raft of coming regulations. Get ready if any of the following are your clients: UnitedHealth Group Incorporated, Aetna Inc., WellPoint, Inc., CIGNA Corporation, Kaiser Permanente, Humana Inc., Luxottica Group S.p.A., Medco Health Solutions, Inc., HealthSpring, Inc. and Genworth Financial, Inc.
Green Clients. You're in good shape if you represent companies that reduce green-house gases, supply alternative forms of energy like wind-power, make hybrid vehicles or increase renewable energy resources. Sure, their stock prices are down right now, along with the rest of the S&P 500. But the new administration will be creating tax incentives and possible new funding your clients will want to know about from you.
Real Estate. Residential real estate closings are fewer than ever, it seems. But I predict that the new administration will force banks getting a piece of the $700 bailout to make mortgage loans, and not use the money to acquire competitors. Further, he's proposed a 90-day moratorium on home foreclosures, affecting 6.5 million households. Banks dump foreclosed homes on the market, depressing prices. This discourages people from selling their homes. An increase in mortgage loans and break from the foreclosure flood can ramp up real estate closings.
Meanwhile, there is a boom in litigation in subprime loan/credit crisis litigation that includes:
- For big firms, filing securities class actions, shareholder derivative suits, and ERISA lawsuits against failed lenders and investment banks. The plaintiffs include borrowers, shareholders, investors, issuers & underwriters, retirement plan participants. Defendants include lenders, issuers, underwriters, rating agencies, accounting and law firms, bond issuers and hedge funds.
- For smaller firms, representing homeowners renegotiate terms or come up with "short sales" with their lenders.
- Suits on behalf of developers, investors and contracts against banks that cut off their credit before the real estate projects were completed.
- Advising home owners on J.P. Morgan's new offer of option adjustable-rate mortgages, which allow homeowners to make a minimum payment, as credit card companies do.
Labor Law. Union members dwindled to only 12% percent of employed wage and salary workers, according to the Bureau of Labor Statistics. But the new administration is expected to shift the balance of power in favor or unions and against employers. In his speech to the AFL-CIO, Obama said, "We're ready to play offense for organized labor. It's time we had a President who didn't choke saying the word "union." A President who knows it's the Department of Labor and not the Department of Management. And a President who strengthens our unions by letting them do what they do best - organize our workers." More union members mean more contracts for labor lawyers to negotiate and write.
Government Contracts. There will continue to be work in this practice, but it's less likely to be for defense contractors as the U.S. withdraws from Iraq. I predict that the new contracts to be awarded will be for green technology, alternative energy producers, Internet projects that support network neutrality, expansion of broadband access, and construction of roads, highways and bridges.
Bankruptcy. According to Bruce Zirinsky, Cadwalader, Wickersham & Taft, some of the amendments to the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 will be repealed, especially the ones that made Chapter 11 less of a safety net for companies. It has become in vogue in recent years to have quickie Chapter 11s, according to Zirinsky. But as more companies are forced into Chapter 11, there will be more of a sentiment that bankruptcy protections are more important. BAPCPA took out the rights of Chapter 7, making it harder for individuals to hold onto nonexempt assets. "But as we see more and more mortgage foreclosures, I think people will try to reform this law," he said.
In sum, Obama's rising sun logo is the light at the end of the tunnel for law firms.
Excellent post, Larry. I am already gearing up for new work with green clients, having established my credibility through my work with the Ocean Renewable Trade Association, (www.oceanrenewable.com), a trade association that I created with a colleague. This organization has positioned me as a leader in the field. If firms are interested in these practice areas, they need to be moving right now because they're already going to be playing catch up.
Bankruptcy lawyers are also excited about the prospects. In marketing to the masses and jumping on the real estate bandwagon, the democrat party has proposed changes that, for example, would allow debt secured by a residence to be lowered to the value of the property. In turn, consumer bankruptcy lawyers and blogs are pushing this as a big marketing point. What does it mean? More cases, more legal fees.
Where is the money going to come from to pay for all this new litigation? Just what we need to help the ecnonmy! No wonder business is flocking overseas!
I agree with Mark.Costs of doing business associated with micro regulation and legal freebooters disquised as "public interest" law firms will impose a increasing disadvantage to US manufacturing among others. Mister Bodine ESQ and others are so blatantly in it for the dough. Elimination of risks to the public will be an accidental effect if at all.
Woefully, the answer is regularly an estimation that is so basic it would only need a small period of time to put into place, but is typically forgotten.