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Trump's CFPB Bashing Brings Halt to Big Law Workflow

[caption id="attachment_8995" align="alignnone" width="620"] Mick Mulvaney, acting director of the CFPB[/caption] The day after President Donald Trump won the 2016 election, the roughly 600-lawyer Ballard Spahr still had a sizable practice focused on Consumer Financial Protection Bureau-related work. But Alan Kaplinsky, co-chair of the firm’s consumer financial services group, quickly called a meeting to forewarn his lawyers about the future. “It’s not going to happen immediately,” Kaplinsky recalled telling the gathering. But CFPB work is going to decline. We need to pivot.” Kaplinsky's prognostication has proven prophetic. CFPB-related corporate defense work for firms nationwide has dropped off dramatically as Trump administration officials have dismantled the federal regulatory agency. At the beginning of this month, John "Mick" Mulvaney, the CFPB's current acting director, fired the agency’s 25-member advisory board, just days after some of its members criticized his leadership of the consumer watchdog. Even before that development, for the past several months lawyers engaged in CFPB-focused practices and legal headhunters have identified evidence of a slowdown. “We still have a fair amount of CFPB work. But that type of the work is not at the level that it was under [Richard] Cordray,” said Kaplinsky about the Obama administration-appointed former CFPB director, who stepped down late last year ahead of the end of his five-year term, smoothing the way for a Trump era revamp of the regulator. [caption id="attachment_18495" align="alignright" width="245"] Alan Kaplinsky[/caption] Most of the lawyers in his practice have effectively have pivoted, said Kaplinsky, who regularly writes for Ballard Spahr’s Consumer Finance Monitor blog, which spotlights CFPB activity. As a result, “The volume of business in the consumer financial services group is better than it has ever been. We have more than made up for the decline,” he said. Specifically, Ballard Spahr's lawyers are working on new financial services product that clients have been encouraged in this newly deregulated environment to roll out, Kaplinsky said. Additional opportunities have arisen because state attorneys general, in the wake of Trump's defanging of the CFPB, which is poised to get a new leader in Kathy Kraninger, have started pursuing more enforcement actions, thereby triggering clients' need for Ballard Spahr’s defense counsel. But according to a database maintained by ALM Intelligence, at least 32 lawyers with finance or consumer-related practices have left Ballard Spahr within the past year. “For a couple of lawyers in the group whose practices concentrated on CFPB work, their work has declined,” acknowledged the Philadelphia-based Kaplinsky. At Davis Wright Tremaine, partner Jonathan Engel in Washington, D.C., has also identified a shift away from CFPB-focused work. [caption id="attachment_18494" align="alignright" width="245"] Jonathan Engel[/caption] “There is still work, but it is a somewhat different emphasis,” said Engel, who left the CFPB last summer and now serves as co-leader of Davis Wright's supervision, enforcement and litigation group within the firm's consumer financial services practice. “It’s not CFPB matter after CFPB matter,” as it had been previously, he added. At least 17 lawyers with finance or consumer-related practices have departed from Davis Wright within the past year, according to ALM Intelligence. A partner at one large firm with a consumer financial services practice, who did not want to be identified when discussing client matters, said that his firm has received a "ton of resumes" from lawyers who have handled CFPB-related matters at rival firms, including Ballard Spahr and the 150-lawyer Buckley Sandler, which saw its gross revenue soar during the Obama years. A former Buckley Sandler lawyer said that the firm has engaged in some stealth layoffs due to a slowdown in CFPB work. ALM Intelligence data shows that 10 lawyers with consumer and financial services practices have left Buckley Sandler over the past year. In response to an inquiry for this story, Buckley Sandler's co-managing partner John Kromer said in a statement that the firm has sought to respond to the new regulatory regime. "Buckley Sandler has undertaken a variety of initiatives in anticipation of, and in response to, a change in enforcement priorities under the current administration," said Kromer, noting his firm's recent spate of high-profile hires, including Christina "Tina" Tchen, a former Skadden, Arps, Slate, Meagher & Flom partner who served as chief of staff to First Lady Michelle Obama. Others to have joined Buckley Sandler in recent months include Henry "Hank" Asbill, a veteran white-collar litigator who joined the firm in April after serving as a partner at Jones Day, as well as Daniel Stipano, a former deputy chief counsel in the Office of the Comptroller of the Currency who the firm brought aboard as a partner in early 2017. Like Ballard Spahr, Buckley Sandler has "expanded our state attorneys general practice" and "opened a San Francisco office to meet demand from our fintech clients," wrote Kromer in his statement, adding that "through these initiatives and the strength of our core financial services and litigation/enforcement practices, the firm is well-positioned for the future." In February, Andrew Sandler, a co-founder of Buckley Sandler, announced his retirement from the firm. In a letter to colleagues, Sandler wrote that after returning from a family trip, he had found it too difficult to continue as chairman and executive partner of the firm along with his other responsibilities leading three asset management, compliance and financial advisory outfits independent from Buckley Sandler: Asurity Technologies, Temerity Capital Partners LLC and Treliant Risk Advisors LLC, as well as pursuing his personal interests. Stephen Nelson, a managing principal for legal and government affairs at executive search firm The McCormick Group, is not surprised that firm's like Buckley Sandler, which once focused extensively on CFPB matters, are now making adjustments. Nelson began noticing a steep downturn in demand for CFPB-focused lawyers beginning on Nov. 8, 2016, the day that Trump defeated Hillary Clinton to win the presidency. “In 2015 and 2016, we were getting a lot of inquiries from firms about adding CFPB talent. It was a thriving area,” Nelson said. “We have not gotten one inquiry since Donald Trump was elected.”