Bailout bill worth billions to law firms

Law firms could get $5.2 billion in legal fees from the U.S. government's bank bailout bill, according to a survey by BTI Consulting Group.

Lawyers would earn the fees over the next seven to 10 years by helping banks buy and sell assets under the Troubled Asset Relief Program, or TARP, as the $700 billion bailout bill is known, according to the survey released Thursday. Legal work stemming from TARP will include advising financial institutions on mergers and acquisitions, equity investments and other financings, BTI said.

BTI, based in Wellesley, Mass., calculated the $5.2 billion figure by conducting interviews with company lawyers and banking experts, who estimated the fees from potential transactions spurred by the bailout bill.

Legal fees related to bailout-related transactions are likely to peak in three to four years, BTI President Michael Rynowecer said.

“We think at the end of the day, 70 or so law firms stand to benefit the most,” he said.

Those will include law firms throughout the U.S., as both New York-based banks and regional banks benefit from the bailout bill, Rynowecer said.

The bailout bill will be “the full-employment act for lawyers,” Peter Zeughauser, a law firm consultant, said in an interview this month.

Already, some firms are gaining from the government's rescue of banks and insurers. New York-based Davis Polk & Wardwell is lead counsel to the Treasury Department and the Federal Reserve in the government's bailout of American International Group Inc.