Poor Local Economy Puts Commercial Litigation in Demand
Carter, Kim, THE JOURNAL RECORD
All types of litigation are hot areas right now, but real estate foreclosure, oil and gas and bankruptcy are the fields where litigators are finding the most business.
Bankruptcy filings in the western district are at a record high, which clearly indicates work in the area is also increasing.
"There is a continuing demand for services in the area of bankruptcy, with future problems in oil and gas and also in real estate ventures," said Jimmy Goodman, recruiting director of Crowe & Dunlevy.
According to recruiting partners in Oklahoma City law firms, litigation is in high demand when the economy is depressed.
"When the economy is bad, there is more litigation," said Michael Joseph of McAfee & Taft.
But Richard Ingham, hiring partner with Andrews, Davis, Legg, Bixler, Milsten and Murrah Inc., said litigation is less cyclical than some other areas of law.
"Oil and gas businesses and related businesses have been down since the fall of Penn Square.
"Litigation seems to be less cyclical. They are always litigating in good and bad times. In good times, they are willing to overlook minor sins when everybody is happy and fat, but sue the bastard when times get tough," Ingham said.
Ingham agreed litigation, in general and particuarly in bankruptcy, is the hot spot locally.
"We see bankruptcy as a trend that started after the failure of Penn Square that is still going on.
"What do we need right now? Litigators," Ingham said.
Goodman said there has been no drastic reduction in bankruptcy, but it has leveled off since the large rise resulting with the Penn Square Bank failure.
Lawyers predict the trend for the next two to three years will keep in tune with a continued demand for litigation services, primarily in general business disputes, real estate and bankruptcy.
"The most dramatic increase I am seeing now is in real estate litigation. It will continue to increase over the next one to three years," Goodman said.
"There seems to be a higher demand for litigation than any other - within bankruptcy and in business," said Joseph. He cited a steady amount of litigation work in real estate and a decline in oil and gas.
Goodman said utilization of bankruptcy court continues to increase, along with a continued rise in real estate foreclosures. In many instances, real estate litigation will also involve the debtor seeking relief in bankruptcy court, he said.
Joseph added there has probably been a fairly steady workload in the tax area of law in Oklahoma City.
He agreed that the real growth over the next two years will be in litigation, coupled by a boom in bankruptcy that will most likely level off.
"I think bankruptcy work has boomed partly as a result of the failure of Penn Square Bank and other banks and oil related companies. As they settle and economic times turn around, bankruptcy work will be on the decline," Joseph said.
Eric Overby, co-chairman of hiring committee for Kornfeld, Franklin & Phillips, also said the highest demand is currently in the area of commercial litigation. He agreed the trend would continue for probably 13 to 24 months.
Ray Tompkins, hiring partner with Linn & Helms, primarily a litigation firm, said the largest source of income is rising out of litgation going on now.
"I'm not talking about personal injury litigation in the Legislature now, but more complex pieces. Some are busy in the area of bankruptcy and representing troubled banks in terms of commercial litigation," Tompkins said.
"In respect to our own firm, our business has been and will remain in future corporate and commercial litigation. …