You may recall that I  warned you back in August that federal investigations into mortgage lenders, particularly those who were eating up the subprime market, was the next big thing.  Well, you may not have believed me, but Biglaw certainly did.  I knew that those guys read me religiously.  After all, how else would they be able to tell their backsides from their elbow?

This article from  New York Lawyer is particularly timely given  my post just yesterday about Skadden’s absurd handling of Brocade CEO Gregory Reyes’ case.  While criminal defense lawyers went about their humdrum work of representing people, Biglaw was busy positioning themselves to suck all the money that hasn’t been spent on fast cars and loose women from the mortgage crowd.

A litigation army is massing at major law firms to fight the wave of investigations, class actions, and bankruptcies that are expected in the coming months — and years — in the wake of the subprime-mortgage mess.

Skadden, Arps, Slate, Meagher & Flom alone says it has roughly 100 lawyers across the firm working on subprime-mortgage fallout.

Skadden again?  Now I have no doubt that they will do an exemplary job at handling paper.  As everyone agrees, nobody kills more trees than Biglaw.  They relish the work.  They stay afloat in a sea of paper.  Paper is their life.  But despite the many brilliant, and exceptionally well-paid, young lawyers who will shuffle reams of paper from one side of the table to the other, and despite the foregone conclusion that they will bill many millions, perhaps even billions, of dollars to clients who could never imagine that they would find themselves seated in the defendant’s chair in a criminal prosecution, they will be more responsible for filling up our prison camps than any group of aggressive prosecutors in the nation.

I realize that I keep harping on this point, but it never seems to sink in.  Not to white collar defendants.  Not to Biglaw.  Hiring a few former assistant United States attorneys does not give you a “white collar defense” group.  They have never defended anyone in their careers, and they just don’t know how.  It’s different to prosecute than to defend.  There is no “inside track” or secret handshake that they bring to the table. 

Their “connections” to the kids they left behind means one thing only.  In your first meeting, you will be stroked.  You will be told how horrible the Government can be, and how it overreaches when it goes after fine citizens like you instead of spending its time convicting drug dealers and terrorists.  How dare they investigate you, the lawyers (there are always more than one) will tell you, sharing your pain and anger and humiliation at being so wrongfully accused.  You will be assured that they have the juice, the power, the “resources”, to do everything possible to restore your reputation, to protect you from this unduly aggressive government, to keep a good person like you from every seeing the inside of a federal prison.  They can do it because they were prosecutors themselves (insert various war stories) and know how it works.

After going through the routine that happens at the commencement of every criminal prosecution, and billing you for their time, their associates time, their conferring partners’ time, their research, their document review ad naseum, and making certain that they have taken from you  every remaining penny from your years of work, legitimate or otherwise, they will tell you that the risks are too great.  The old chestnut about how even innocent people can end up convicted get tossed on the fire.  You begin to shake.  If these guys, the best money can buy, say so, then so it must be.

They will explain to you, in accurate detail, all the reasons you should take a walk with them to the United States Attorneys office.  You will come to see how you, because you’re not “really” a criminal, should talk to the prosecutors, work something out, trust the government.  The government will work with you, because your lawyers used to be government lawyers.  Your lawyers know people.  Your lawyers can talk to their friends about you.  It’s good to have friends, you think.  Thank heavens your lawyers used to be prosecutors.  They will explain everything to their dear friends in the United States Attorneys office, and everything will go away.

This is where the shoe falls.  You do what your very expensive lawyers tell you to do, because there’s no purpose in having a lawyer if you aren’t going to listen to him.  You take that long walk to the United States Attorneys office.  They embrace you.  They bring you into the fold.  In your newfound comfort, you speak freely.  Finally, you are at the table with the good guys, the people with whom you want to bond.  People like you, who wear suits and ties and dream of vacations with the wife (girlfriend?) and kids.  Your type of people.

After all, you aren’t a criminal.  You don’t rob old ladies with a bat, or sell drugs on the street.  They are criminals.  You are just a businessman, a banker, doing your job.  This whole thing is just a big misunderstanding.  Now you can talk with your new chums and straighten out this whole mess.  You will all have a big laugh about the misunderstanding, and you can go home and have a stiff drink and thank God the nightmare is over.  You think to yourself, it may have cost me a fortune, but it really pays to have hired this huge multinational law firm with the “resources” to fix everything. 

And then the other shoe falls.  There’s just one detail remaining, that isn’t mentioned until the end of the meeting.  You will have to execute this plea agreement, where you admit to the commission of the crimes and agree to go to prison, forfeit everything that’s left and pay restitution in an amount with many zeros to the victims you left behind.  Your head spins.  How did this happen?  What went wrong?  It wasn’t supposed to happen this way.

This story has been replayed over and over.  Read the papers.  One CEO falling after another in disgrace.  The failure to defend has been of massive proportions.  Biglaw’s purpose is to earn partner profits.  You are the source of those profits.  The reason is simple: You are a believing that bigger is better, bigger has powers that smaller doesn’t have and the most expensive is always the best.  You believe in magic tricks because you want to believe.  You believe that you aren’t really a criminal defendant because it conforms with your self-image.   You accept the lack of a defense because it absolves you from blame. 

There are winners in this game.  You just won’t be one of them.  The winners are quietly receiving the representation that you are too proud and important to seek.  They are putting up a real fight, a fight for their lives, because they aren’t fooled by the promise of “connections” and “resources”.  Chances are that these were your COOs, CFOs, CIOs (any other “C”s I missed), managers and brokers, the little people who can’t afford Biglaw. 

Afterward, you ask yourself how these people who were always beneath you managed to accomplish what you could not.  How is it possible that they walk free while you sit in a prison camp, your life in ruins.  You aren’t feeling as smart as you used to, but you must rationalize your situation because the plain truth is too unbearable.

And ironically, it’s not that Biglaw couldn’t produce a defense with a viable chance of succeeding.  It’s that they chose not to.  They feel  much more comfortable sitting around the office with these former AUSAs who can honestly say that their hands were never sullied by a fight.  Biglaw doesn’t engage real criminal defense lawyers.  We’re not really their kind of lawyer.  They won’t bring one in to head up the defense, as that would be demeaning and inconsistent with their self-image.  They too want to believe that their ex-government hires have the ability to use their connections and wrap up cases.  Of course, they aren’t too concerned about how the cases end, only that the bills are fully paid.  It’s a business, you know.  That’s why New York Lawyer calls it a “feeding frenzy.” 

It’s your life.  Do whatever you must.  But I can’t help you afterward, when you are lying awake in your prison bed in the middle of the night wondering how everything went wrong.