Grange Securities' tribulations over CDO sales could be good news for securities lawyers.
Australia's local councils are claiming Grange Securities, the local branch of US bank Lehman Brothers, didn't act in their best interests by promoting Lehman-originated Federation CDOs which were exposed to the US sub prime market. To rub salt into the gaping wound, Federation copped a mark-down to 16 cents in the dollar late last year, leaving the councils with mega investment losses.
With court action pending, it's probably fair to expect that sub prime fallout might create plenty of work for investment banking legal eagles with derivatives experience in 2008.
However, Brian Rollo, manager of in-house legal recruitment at Michael Page, says, "While it's a specialist area, I wouldn't say there are a huge amount of jobs for those sorts of lawyers. The investment banking products industry in Australia isn't as mature as London or New York."
Away from derivatives, lawyers with compliance experience are set for an excellent year. John Coles from headhunter Coles Christie & Associates says that in 2008 a seasoned corporate lawyer could expect to earn a salary of AU$200k+ in salary and bonuses in multiples of two to four times salary, "if they get in right".
"That's because of Elliot Spitzer and his doings in the US, which have created a huge amount of work for lawyers in investment banking," he says. "That's the main interface, while mergers and acquisitions will also provide plenty of opportunities."
He adds: "The only areas that have gone quiet are treasury operations and real estate because of sub prime mortgage problems."