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February 17, 2017  

New Outlook Prompts Growth at Morgan Lewis

Morgan Lewis has set out to recapture the top ranking among law firms that represent issuers of asset- and mortgage-backed bonds, starting with the hiring of two attorneys from rival Chapman & Cutler.

Cory Barry and Mark Riccardi arrive today as partners in Morgan Lewis’ Washington practice, bringing with them a diverse list of contacts among issuers. Both have worked on transactions backed by credit-card receivables, for example, along with student loans and marketplace-originated personal loans.

With Barry and Riccardi on board, Morgan Lewis employs about 20 securitization lawyers in Washington — a city where many law firms are devoting more resources. The plan is to add several associates to the office in the coming weeks.

Morgan Lewis employs about 70 securitization attorneys overall, led by John Arnholz and Jeff Johnson in Washington and Reed Auerbach in New York.

Boosted by its 2014 takeover of Bingham McCutchen, Morgan Lewis was the busiest issuer counsel for asset- and mortgage-backed bond deals in the U.S. that year and in 2015. But the firm slid to fourth behind Mayer Brown, Sidley Austin and Katten Muchin in 2016 as its deal count fell to 28 from 66, according to Asset-Backed Alert’s ABS Database.

The main culprit was a market-wide decline in mortgage-resecuritization activity, as those deals were rendered unworkable by the Dodd-Frank Act’s risk-retention rule and an update to the SEC’s Regulation AB. Indeed, Morgan Lewis served as underwriter counsel on just two re-Remic offerings in 2016, down from 35 in 2015.

The re-Remic pullback also dented Morgan Lewis’ activities as an issuer counsel, but had less of an effect on the firm’s league-table standing as it went from first place in 2014 to second behind Sidley Austin in 2015 and then back to first in 2016.

Meanwhile, the firm remained active in other areas. It routinely fields issuer-counsel work on deals backed by auto loans and leases from BMW and Toyota, for example, while advising Navient on its student-loan securitizations and FirstKey Mortgage on offerings underpinned by reperforming mortgages. It won the coveted issuer-counsel assignments on Verizon’s first two securitizations of mobile-device payments as well.

Johnson pointed to the additions of Barry and Riccardi as adding diversity to the practice, with a focus on asset classes where Morgan Lewis anticipates growth. Credit-card securitizations are widely expected to increase in volume this year, for example, while industry participants continue to pour resources into the marketplace-loan sector.

Riccardi joined Chapman & Cutler in 2012 as part of a six-person team that moved over from Orrick Herrington, setting up a Washington practice for their new employer. Barry joined from Orrick soon after. In the years that followed, Chapman emerged as a routine top-10 player — claiming the sixth most deals among issuer counsel in 2016 while ranking 10th among underwriter counsel.

Chapman & Cutler’s presence as an issuer counsel is headlined by its work on Capital One’s credit-card deals. It represents Sallie Mae on student-loan offerings and Avant on personal-loan deals as well. The firm’s 40-person securitization practice is headed by Walt Begley.