2021 was one of the worst years in decades for BigLaw bankruptcy practices

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Bankruptcy Law 2021 was one of the worst years in decades for BigLaw bankruptcy practices

By Debra Cassens Weiss

February 14, 2022, 8:46 am CST

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BigLaw bankruptcy practices suffered a big downturn last year as fewer large companies sought bankruptcy protection.

Bloomberg Law has the story.

“BigLaw bankruptcy practices just finished one of their worst years in decades,” the article reports.

Bloomberg cited information from the University of California at Los Angeles’ LoPucki Bankruptcy Research Database, which found that only eight public companies with more than $300 million in assets sought bankruptcy protection last year. The number of major filings hasn’t been that low since 1987.

The slowdown is a big change from 2020, when Kirkland & Ellis earned more than $200 million in “a COVID-induced bankruptcy boom,” according to Bloomberg Law. Contrast that with 2021, when Kirkland earned about a tenth that much in bankruptcy fees.

The article reports that Latham & Watkins and Weil, Gotshal & Manges “saw similar booms and busts.”

Law.com also noted the bankruptcy downturn last month. The publication reported that commercial Chapter 11 filings decreased by nearly 50% last year, citing data from Epiq Global, a legal data company.

“In interviews, bankruptcy practice leaders insisted that out-of-court restructurings and other insolvency matters have filled gaps left by the Chapter 11 lull,” the article reported. “But they also admittedly have some time on their hands, which they’re using to sniff out insolvency in distressed sectors and market their services to existing and potential clients.”

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