What the Crackdown in Merger Litigation Means for Your Job Prospects
In 2014, some 95% of corporate deals attracted at least one lawsuit. But since Delaware courts have cracked down on multi-jurisdictional litigation and jurisdiction shopping in takeover litigation by, among other things, enforcing forum selection clauses in corporate bylaws, such lawsuits have dropped dramatically -- from about 95% in 2014 to about 22% in 2015. Delaware is, of course, a critical state because more than half of U.S. public companies are incorporated in Delaware, but actually maintain their headquarters in another state.
This type of litigation has traditionally been lucrative, resulting in boutique firms. So what will happen to these firms now? Steven Davidoff Solomon, a professor at the UC Berkeley School of Law, predicts the "net effect of this downturn will be to drive many of the smaller law firms out of this business, presumably into new ventures."
As law firms close their doors or shift to new practice areas, their lawyers will need to shift as well. Attorneys may be wise to broaden their practice and reposition themselves in the legal marketplace to avoid getting trapped fighting for fewer positions in a shrinking practice area. Think about the next stage in your legal career and then get your legal resume ready -- before your firm downsizes.
Read the full story at the New York Times: "Why the Surge in Merger Litigation Fizzled" by Steven Davidoff Solomon