For all of the talk lately of law firm layoffs and firms losing key clients in the recent bankruptcies, mergers and bailouts, there is still a large number of lawyers who are busier than ever, and likely will be for a long time. As discussed in today’s WSJ, this week’s craziness on Wall Street is certain to lead to a blizzard of lawsuits.
American International Group and Morgan Stanley have already been hit with lawsuits, the WSJ reports, as have Fannie Mae (FNM) and Merrill Lynch (MER). More are no doubt on the way.
One issue that may be significant in securities litigation related to this week’s crisis is causation: were losses due to fraud or an unforeseen, “once-in-a-lifetime market event” as Michael Perino, a securities-litigation professor at St. John’s University School of Law in New York, described it to the WSJ.
Joseph Grundfest, a Stanford law professor and former commissioner of the Securities and Exchange Commission, also expects that there may be “litigation within litigation” as plaintiffs’ law firms jockey for lead roles in big-ticket cases.