Kara Sears
Bankruptcy law is a highly specialized field that deals with helping debtors get relief from debts they cannot pay and helping creditors get paid from the debtor's assets. Bankruptcy lawyers can represent either the debtor or the creditor, or act as impartial intermediaries to ensure the bankruptcy process is fair. Bankruptcy law is a field of law that is primarily federal and therefore, a lawyer may not need a state bar license to practice in a particular state. However, there has been litigation and debate on this issue, and some states may require a state bar license even for fields of law that are primarily federal.
| Characteristics | Values |
|---|---|
| General rule for practicing law in a state | A lawyer can practice law in a state court only when admitted to the bar of that state |
| Exception to the general rule | An out-of-state lawyer can practice with an in-state attorney acting as local counsel |
| Federal court requirement | A lawyer must be admitted to appear in the district court where the legal matter is being handled |
| Requirement for admission to district court | A state bar license is required, but not necessarily from the state where the district court is located |
| Fields of law that are primarily federal | Bankruptcy and immigration |
| Requirement for fields of law that are primarily federal | May not require admission to the state bar where the attorney is practicing |
| Requirement for state law-governed fields | A state bar license is required |
| Litigation and debate amongst courts | Whether fields of law that are primarily federal require a state bar license |
| Multi-state practice | Practicing law in multiple states is a viable option |
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What You'll Learn
Bankruptcy law specialisation
Bankruptcy law is a highly specialised field that deals with helping debtors (people who owe money) get relief from debts they cannot pay, while also ensuring that creditors (people who are owed money) receive payment from the debtor's assets. It is a complex area of law characterised by a variety of work, including corporate, tax, environmental, employment, real estate, finance, securities, class actions, and litigation issues. Bankruptcy lawyers may also serve as impartial intermediaries who ensure that the bankruptcy process is fair.
Bankruptcy law is primarily governed by federal law, specifically the United States Bankruptcy Code (Title 11, United States Code) and the Federal Rules of Bankruptcy Procedure. However, bankruptcy lawyers may need to be admitted to the state bar of the state in which they are practising, even if it is not the state where the district court is located. This is because there is ongoing litigation and debate on whether fields of law that are primarily federal require a state bar license.
Aspiring bankruptcy lawyers should aim to gain a strong understanding of accounting and litigation skills, as well as public speaking skills and work experience in the field. They should be creative, financially literate, and able to compromise and empathise with clients.
Bankruptcy lawyers can work in a variety of settings, including large and small law firms, corporations, utilities, title companies, banks, and government agencies such as state and municipal tax authorities. They may also pursue a judicial career or seek positions with organisations like the United States Trustee's office.
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Job opportunities
Bankruptcy law is a diverse and growing field with a range of job opportunities. Bankruptcy attorneys may work in small or large firms, with most bankruptcy matters being handled by big law or boutique firms. Small firms may have limited practice groups, while large firms often have separate departments dedicated to bankruptcy and related areas such as corporate, tax, environmental, employment, real estate, finance, securities, class actions, and litigation issues. Bankruptcy attorneys may also work as solo practitioners or in partnership with bigger firms on larger business cases.
- Junior associate: In smaller firms, junior associates may work directly with a partner. They may have more limited responsibilities and less direct contact with clients and adversaries.
- Senior associate: As associates gain experience and become more senior, their responsibilities increase, and they have more direct interaction with clients. They may lead teams on large cases, comprising junior and senior associates and partners.
- Bankruptcy attorney: Bankruptcy attorneys may represent either creditors or debtors and must effectively advocate for their clients. They may also serve as impartial intermediaries to ensure the bankruptcy process is fair. Bankruptcy attorneys work with a range of professionals, including financial advisors, accountants, appraisers, auctioneers, and trustees. They must be well-versed in bankruptcy law and related areas to provide comprehensive representation to their clients.
- Judicial careers: Bankruptcy attorneys may pursue judicial careers after gaining experience in the field. They may seek positions as judges, trustees, or regulators, overseeing bankruptcy cases and ensuring fair processes.
- Non-practicing positions: There are also non-practicing job opportunities in companies that provide research materials and programs for bankruptcy attorneys. These positions can leverage the knowledge and experience gained in bankruptcy law practice.
- In-house counsel: While less common, some bankruptcy attorneys may transition to in-house corporate counsel positions. However, they may need to rebrand themselves as business solutions experts rather than focusing on bankruptcy.
- Academic positions: Law schools and academic institutions may offer opportunities for bankruptcy attorneys to teach and mentor aspiring lawyers. They can share their practical knowledge and guide the next generation of bankruptcy lawyers.
To enhance their job prospects, aspiring bankruptcy attorneys should consider gaining practical experience through internships, clerkships, or working with experienced attorneys. Networking within bankruptcy groups, attending CLEs, and volunteering at bankruptcy help desks or nonprofits can also broaden one's connections and visibility in the field. Additionally, developing a strong understanding of accounting, litigation skills, and public speaking abilities are valuable assets in the job market for bankruptcy law.
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Educational requirements
The minimum requirements to become a lawyer are a high school diploma, a college degree, and a law degree. Classes in government, history, social studies, economics, mathematics, and business will provide a solid foundation for college-level courses. Speech and English classes, particularly writing, are also beneficial for developing the strong communication skills required in the legal profession. Additionally, aspiring lawyers should aim to become proficient in computers and the internet, as these tools are commonly used for research and client communication. Taking a foreign language course can also be advantageous when working with clients who do not speak English as their first language.
Most law schools require applicants to have a bachelor's degree and to take the Law School Admission Test (LSAT). The LSAT evaluates prospective law students' critical thinking, writing, and reasoning abilities. Around 200 law schools in the United States are accredited by the American Bar Association, while others, often night schools, are approved by state authorities. Many approved law schools offer night classes to accommodate part-time students, and part-time programmes typically span four years.
Aspiring bankruptcy lawyers should consider taking courses closely related to their field, such as finance, mathematics, and economics. Jonathan Carson, co-CEO of Stretto, recommends that law students interested in bankruptcy law ensure their law school offers a course called "Accounting for Lawyers," as understanding financial statements is crucial in this area of practice. A trial law class is also beneficial for cultivating litigation skills. Additionally, students can participate in moot court competitions to enhance their public speaking skills and aim to secure a bankruptcy law internship to gain practical experience and learn from seasoned attorneys.
To specialise in bankruptcy law, attorneys can take advantage of various educational resources. The American Bankruptcy Institute (ABI) offers educational opportunities, including CLE sessions and courses like Bankruptcy 101. The King Bankruptcy Academy within the Morgan King Company provides attorneys with live and recorded bankruptcy and tax courses. Fastcase offers legal research on bankruptcy codes and case law, while Argyle Publishing provides bankruptcy educational books and guides. Lawline and Lexvid offer online bankruptcy law and CLE classes, and Lorman provides bankruptcy law training courses covering basics, legal terminology, and exemption training.
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Career progression
Bankruptcy law is a diverse and growing field with a variety of career options. Those interested in pursuing a career in bankruptcy law must obtain a Juris Doctor (JD) degree and be licensed to practice law in their state. Early preparation and a good understanding of what the practice entails are key to a promising career in bankruptcy law.
The career path for a bankruptcy attorney is similar to that of any other law firm attorney. They typically start out as associates and can progress to counsel or partner. Bankruptcy attorneys may also pursue a judicial career after several years of practice or seek a position with the United States Trustee's office, which monitors and oversees bankruptcy cases.
Bankruptcy attorneys can work in corporate or private legal practices, government agencies, or non-profit organizations. They can also specialize in various areas of law, such as family law, business law, or real estate law. Bankruptcy law is a fast-paced and rewarding profession for those who enjoy helping people.
To specialize in bankruptcy law, it is important to gain relevant experience and build a strong understanding of the field. Aspiring bankruptcy attorneys should consider participating in moot court competitions, internships, and law school courses such as "accounting for lawyers" and trial law classes. They should also aim to develop excellent communication, analytical, and research skills, as well as proficiency with computers and litigation software.
Bankruptcy attorneys may work with financial advisors, accountants, appraisers, auctioneers, trustees, and other attorneys in different practice areas. They represent either creditors or debtors and must be adept at creative problem-solving, financial literacy, legal writing, and oratory skills. The work involves strategy, empathy, and the ability to compromise.
Bankruptcy is a dynamic field where practitioners learn about different industries and market segments. It offers a great deal of job security and the potential for significant income. However, it may not be the best choice for those seeking an in-house corporate counsel position or control over their time, as cases and clients can be located anywhere, including abroad.
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Pros and cons
Pros of Practicing Bankruptcy Law
Bankruptcy law is a highly sought-after legal specialty, especially during economic downturns. Bankruptcy lawyers are in high demand as they help clients navigate complex financial situations and find relief from overwhelming debts. This area of law offers a variety of career paths, including working in law firms, corporations, government agencies, and non-profit organizations. Bankruptcy lawyers can also transition to judicial careers or seek positions with the United States Trustee's office.
Bankruptcy law is a dynamic and fulfilling practice area, allowing lawyers to work closely with clients and make a meaningful impact on their financial well-being. It involves a combination of strategy, empathy, legal writing skills, and oratory ability. Bankruptcy lawyers can represent either creditors or debtors, negotiating deals and ensuring a fair process for all involved parties.
Cons of Practicing Bankruptcy Law
Practicing bankruptcy law can be challenging due to its complexity and the emotional nature of financial distress. Bankruptcy lawyers need to possess strong financial literacy skills and keep up with constantly evolving laws and regulations.
Transitioning to bankruptcy law from another practice area can be daunting, requiring a significant investment of time and effort to learn the intricacies of this specialized field. Bankruptcy cases can be emotionally draining as they often involve individuals or businesses facing financial ruin. Mistakes in bankruptcy cases can have serious consequences, and lawyers must ensure compliance with strict court procedures.
Additionally, while bankruptcy law is primarily federal, the requirements to practice across state lines are unclear and subject to litigation and debate. Lawyers practicing in multiple states must navigate complex ethical responsibilities and licensing requirements, which can vary across jurisdictions.
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Frequently asked questions
Most practice areas are governed by state law and require a State Bar license. Bankruptcy law is primarily a federal field, and there has been litigation and debate over whether a state bar license is necessary to practice it in any state. While some lawyers have taken the stance that they can practice bankruptcy law in any state, this approach is risky.
While fields of law that are primarily federal may not require a state bar license, this is not always the case. The general rule is that a lawyer can only practice in a state court if they have been admitted to that state's bar.
A lawyer who practiced bankruptcy law in Michigan with only a Texas bar card was admitted to the U.S. District Court for the Western District of Michigan. The Michigan Bar sued him for the unauthorized practice of law, and the bankruptcy court suspended him from practicing. The Sixth Circuit later reversed this decision.
Being licensed in multiple states allows lawyers to expand their client reach and enhance their professional flexibility.
Running a multi-jurisdictional legal career requires a lot of planning and effort.
