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In the current economic environment, bankruptcy professionals commiserate with one another over the dearth of large, meaty, protracted chapter 11 cases, which can generate significant fees for a bevy of attorneys, financial advisors, appraisers and valuation experts. With a nostalgic eye, they reflect on the "good old" days of the late 1980s and early 1990s, when big chapter 11 filings cascaded over them like so much manna from heaven. Just as fortunes were lost when over-leveraged, recession-sensitive companies plunged into insolvency, many a bankruptcy professional made a comfortable living picking up the pieces of fractured debt obligations. Today, the market is quite different, and many veterans of the bankruptcy boom nearly a decade ago now sit under-engaged and eagerly await the next large rash of chapter 11 cases.

In the meantime, however, they must jump whenever a major filing does occur. All the jumping causes a large pile-up, which can be rather daunting from the vantage point of a prospective client on whom the jumpers pile. As a prospective client, I recently experienced a "pile-up" firsthand. Specifically, I manage the division of Norwest Bank’s corporate trust department that is responsible for administering defaults. Within an hour of a recent chapter 11 filing affecting one of our indenture trusteeships, bankruptcy counsel from around the country began to call me. They called all weekend and for several days thereafter. They called my staff and our law department. Given a number of news reports anticipating the filing, the event itself was not a big surprise. What did surprise me was the volume and intensity of prospecting calls from counsel seeking to represent us as indenture trustee or the official committee of unsecured creditors.

A number of callers introduced themselves almost apologetically. "I suppose you’ve received a lot of calls from bankruptcy attorneys," they would say. But no one need have apologized. They’re in business just as I am, and rather than shun their calls, I welcomed them. This reaction surprised one of our in-house bankruptcy attorneys, who thought he was doing me a big favor when he announced, " I steered lots of attorneys away so you wouldn’t have to deal with them." Like so many niches of the American bar, bankruptcy practice is a network, and the better one is connected, the better one can operate and serve. So, I like the calls. I like to hear people’s pitches, their war stories, their insights. Whether I retain them for the immediate case or some future matter, I would like to know them better, for surely there will come a time when our paths will cross and our acquaintance will be helpful. As I learned many times in private practice and subsequently in business, the world is a small place, and one’s way in the world is enhanced by getting to know people and getting to know them well.

Which leads to the $64 question, "So, now that I know you, how do I get your business?" I’ll tell you plainly. First, you need to have experience, results and reputation for representing indenture trustees in major chapter 11 cases. This is the sine qua non of my business. Non-indenture trustee prospects will have other requirements, which you must investigate. If it is the committee counsel appointment you’re after, the requirement expands to experience, results and reputation in representing committees. Second, you can’t punch, kick, pound and slug the file to death and expect to bill and collect for it. Sure, there are the battles, the struggles that require time and lots of effort, and if the time and resources are appropriate, I have no trouble paying for them. But a 10-minute telephone call that becomes "T/C with client (1.0)" on next month’s bill does not sit well with me. Nor does a 10-minute conference call that lasts an hour because garrulous counsel didn’t stick to the agenda. Third, you must know my business. This third item is the most difficult for many lawyers to address.

I manage a single business within a huge bazaar of financial services provided under a far-flung corporate umbrella. Each year, I am evaluated on the financial performance of my particular business—revenues versus expenses. The equation is simple, but the variables are complex and often volatile. Attorneys play a significant role in defining the variables, and they can add or detract, depending on whether they understand my business. Accordingly, I’ll hire honest, experienced attorneys who understand my business. I once explained this to a lawyer who fired back, "All I need to know about your business is that you need me." He understood my need for legal services, but with such a comment, he revealed how little he understood about my business. In other words, he thought I meant he must understand the ins and outs of my business to understand better my need for legal services, specifically, his legal services. What he missed was the need to understand my business so he could favorably affect its determinants.

From the perspective of prospecting counsel, I hold a valuable asset: The need for substantial legal services. In a major chapter 11 case, the fees associated with such services are often very substantial. After the first two requirements for retaining counsel—experience and integrity—are met, I look at how I can best deploy my asset. I must "invest" that asset in a relationship that will help, not hinder my business. If you know my business already, then in prospecting, tell me how you can bolster it. The more you know and the more you can bolster it, the more interested I’ll be. If you don’t know my business, then I welcome the opportunity to inform you. If you don’t know and don’t ask, you’re fishing without a lure.

I know this is difficult. As a former practitioner myself, I used to think that if I delivered top-flight service and results for a reasonable fee, preserved my integrity, answered calls promptly and bought lots of "marketing lunches," I’d do just fine. It never occurred to me that I’d have to understand a client’s or prospect’s business beyond what was necessary to identify legal needs. So, I understand the reader’s reaction, "I’ll have to do what in addition to conventional marketing and being an honest, excellent lawyer?" But until the next crush of large chapter 11 cases descends upon us, the successful bankruptcy practitioner will need to inspect the arrows in the marketing quiver.

Journal Date: 
Monday, June 1, 1998

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