Law firms lose reputation as low credit risk

May 3, 2012 The turmoil over at New York firm Dewey & LeBoeuf, a large and prestigious name in the business - has forced many industry observers to take stock and pose some critical questions about the future of legal service provision.

Law firms have historically been perceived as a low credit risk to banks, and a useful gateway to cultivate relationships with their wealthy clients. But this is starting to change, as law firms lose their reputation as a safe investment.

Accroding to this report in the Wall Street Journal, banks are giving closer scrutiny to potential and existing borrowers, digging deeper into a firm’s financial information, performance results and partner agreements.

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