LAWYERS CAN TEACH WALL ST. FINANCE

NEW York’s law firms are bleeding. Business is drying up, billable hours are way down and associates are being laid off at a rapid clip. Sounds like a recipe for a government bailout, right? Wrong.

Instead, as The Wall Street Journal reported last week, partners at some top firms are being asked to kick in some extra dough to shore up their firms’ finances.

It’s a quaint and honorable concept, and one that harkens back to the days when Wall Street’s top firms, from Goldman Sachs to Lehman Brothers to Morgan Stanley, were all private partnerships as well. Back then, Wall Street was still a very lucrative place to earn a living, but as partnerships, the firms closely guarded their capital and limited their leverage and risk-taking.

But it’s funny how frugality can go out the window once outside shareholders (or taxpayers) are footing the bill. In the decade since Goldman Sachs became the last partnership to go public, Wall Street has thrown caution to the wind and compensation has soared, at times to levels that exceeded revenues.

And, until recently, shareholders, regulators and politicians looked the other way.

Upon hearing reports last week that Wall Street doled out more than $18 billion in bonuses in 2008 – the same as in 2004 – President Obama rightly called the payouts “shameful.”

Just look around: Not only are thousands of struggling homeowners walking away from their homes, bankers who sliced and diced those mortgages are looking to dump their toxic debts on Uncle Sam.

All the while, those very same bankers are busy looking for ways to pay themselves first and worry about the owners, the public shareholders, last.

Back in 1991, during the last severe recession, the movie “Other People’s Money,” starring Danny DeVito, captured the times as the economy lumbered in the wake of the go-go ’80s. We’re ready for a sequel.

TERRY KEENANis anchor of Cashin’ In, an investing program that appears on Fox News Channel on Saturday mornings at 11:30.

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