Legal Marketing & PR

Credit lines dry up - Law firms impacted

By Edward Poll, J.D., M.B.A., CMC

It's reported in today's Los Angeles Business Journal that SBA loans have evaporated. "Banks really are stingy..." is the headline. Small Business Administration guaranteed loans, funded by banks, have fallen by 53% from the 2008 level, a year in which the number of loans also decreased from the preceding year.  This is further evidence that banks' credit for business and for real estate ventures has been dried up.  With TAARP money going to make financial institutions healthier rather than a stated purpose of loosening credit strings to jump start employment and business activity, the financial executives just don't get it.  They wonder why Main Street is upset with them as they sit back and take large bonuses; if they also were to spend the funds to help as intended, I suspect the American people would not be so upset. Also, in U.K. where there will be a 50% tax on bonuses. Wow.  Wake up Wall Street and bankers before we tumble backward ...

Law firms seeking either an extension or increase in their lines of credit are walking in this same environment. It's tricky, at best, and possibly disastrous. Creating and enhancing a good working relationship with your banker is even more critical in these times. That's the point I make in my book, The Successful Lawyer Client Relationship: A LawBiz Special Report. Just as lawyers are being told to create a "partnership" with clients, so, too, they should create a "partnership" with their banker. This will pay dividends.

Full post as published by Law Biz Blog on December 12, 2009 (boomark / email).