In a seminar at New York University School of Law on Thursday (23 October), a panel made up of Lipton, retired Goldman Sachs chairman Stephen Friedman (current chairman of the Federal Reserve Bank of New York) and Joseph Rice, the founder and chairman of New York-based private equity firm Clayton Dubilier & Rice, spoke about the current global economic crisis and offered predictions on what the future might hold for both lawyers and businesses.
Discussing the downturn in the mortgage and housing markets, Lipton said that assets held by banks would not stop declining until those markets are stabilised. "I do not think that is a matter that can be dealt with in a short period of time," Lipton said. "I'm afraid it will take three to five years before we can achieve that."
Lipton went on to say that the economic downturn will result in a flurry of civil suits being filed against directors and officers, which, in turn, will be a driver for significant changes in corporate governance.
Lipton also spoke of a shakeup in the financial institution world, whereby large banks control most of the capital necessary to fund deals, with smaller boutiques taking lesser roles.
"There will always be M&A," said Lipton. "M&A is very psychological, and CEO's do not like to go to their boards in this type of economy."
This article first appeared on the The Am Law Daily blog on americanlawyer.com.
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