The nation's slumping economy provides an opportunity for lawyers specializing in business reorganizations.
The economy may be slowing, but demand for one group of professionals is on the rise: attorneys who handle business bankruptcies.
Law firms in the Tampa Bay area and across the country expect the slow, steady decline in the number of companies seeking bankruptcy protection to reverse as the nation's long economic gallop slows to a trot.
In anticipation, some local firms are looking to beef up their bankruptcy practice with experienced attorneys, paralegals and legal secretaries.
It's quite a change from the beginning of 2000, when corporate bankruptcy attorneys looking for work in the bay area couldn't buy a job.
Today, law firms eager to build their bankruptcy practice may be the ones out of luck.
"The tide has changed," said Susan Etheridge, president of Professional Placement Services Inc., a legal placement company in Tampa.
Roberta Colton, chairwoman of the bankruptcy practice group at the Trenam Kemker firm in Tampa, said she has hired three additional attorneys since September, including the law clerk for bankruptcy judge Alexander Paskay, and is negotiating with a colleague for 50 percent of another associate's time.
"I've done more workouts in the past six months than I've probably done in the previous three or four years combined," Colton said.
So-called workout sessions offer troubled companies and their lenders an opportunity to renegotiate loan terms without resorting to litigation or bankruptcy. Readers of Tom Wolfe's A Man in Full may remember the classic workout session in which pompous real estate magnate Charlie Croker is reduced to a sweaty mess by his bankers. As in the fictional Croker's case, many workout cases eventually end up in bankruptcy anyway.
Cathy Peek McEwen, a bankruptcy attorney at Akerman, Senterfitt & Eidson in Tampa, said her firm currently has no plans to increase its stable of 19 bankruptcy attorneys throughout Florida.
But she said Akerman Senterfitt is planning to have some of its bankruptcy lawyers take the Delaware bar exam. That's because many companies that do business in Florida but are incorporated in Delaware choose to file for bankruptcy in that state, where judges are thought to be more sympathetic and creditors may be less likely to fight.
Among examples of Florida companies that file in Delaware: Breed Technologies Inc. of Lakeland, which recently emerged from Delaware's bankruptcy protection.
Not all lawyers here think an economic slowdown will inevitably quicken the pace of business bankruptcies. Russell Blain, chairman of the Tampa Bay Bankruptcy Bar Association, said a number of things can lead to a company's need for reorganization or failure.
"I can't really say that it correlates on a one-for-one basis," he said. "Some bankruptcies can be related to economic factors, while others are particular to that company."
Blain's firm, Stichter, Riedel, Blain & Prosser, which had as many as 14 lawyers in the mid-1990s, isn't planning to expand beyond its current 10. But partner Harley Riedel said that's mainly because it's easier to staff up than staff down. He and Blain have noticed an increase lately in inquiries about business bankruptcy protection.
Even though corporate bankruptcy filings have been declining here, the bay area is host to a relatively high number of bankruptcies.
According to the American Bankruptcy Institute, the U.S. Bankruptcy Court for the Middle District of Florida ranked seventh among 94 districts nationwide in terms of business bankruptcies and third in personal filings.
And each new filing has an exponential impact. Not only does the bankrupt company hire an attorney, but so may its investors, lenders, and even its employees.