In a different but related case, Anthony Lin of the NYLJ goes on to tell about "top private equity firm Thomas H. Lee has sued Mayer, Brown, Rowe & Maw for $245 million for allegedly misrepresenting the financial shape of commodities brokerage Refco prior to Lee’s acquisition of a controlling interest. Seward & Kissel is also a defendant in a $200 million lawsuit brought by institutional investors who lost money when one of the law firm’s hedge fund clients went under.

There are a number of reasons investment fund clients may be more willing to bite the hand that lawyers them when things go wrong. For one thing, there is almost always a lot of money on the line, and given the nature of their business, investment fund principals experience losses in a more visceral way than, say, corporate executives.

"It’s up close and personal," said Leslie D. Corwin, a partner at Greenberg Traurig specializing in business disputes involving law firms. When fund principals’ expectations of making massive amounts of money are thwarted, he said, they cast around for people to blame.

Law firms are more in the line of fire because they play a much bigger role at investment funds than they do for corporate clients. Even though funds may control companies with large in-house legal departments, they sometimes lack even a general counsel themselves. They therefore develop unusually close relationships with outside lawyers, and feelings can be unusually hard when things do not go well.

"Hedge funds are oftentimes run as if they are small businesses, so every decision matters a lot more to the proprietor," said Barry Barbash, head of the funds practice at Willkie Farr & Gallagher. "The client relationships are more intense and can become more confrontational."

But, from another perspective, Scott Greenfield sees this downturn in mortgages as a new vista for white collar [and potentially, white shoe] criminal defense attorneys.