Determining the qualifications of bond lawyers
The Bond Buyer’s Municipal Marketplace (the “Red Book”) includes a listing of firms that hold themselves out to be bond counsel firms and list the attorneys in those firms who hold themselves out to be bond lawyers. Even though the term “nationally recognized bond counsel” is generally interpreted to mean that a firm or lawyer is listed in the “Red Book,” the “Red Book” expressly does not pass on the qualifications of the firms and lawyers in its listing. The National Association of Bond Lawyers (“NABL”) has, as members, over 3,000 lawyers who are listed in its Directory (the “Blue Book”).
However, the role of NABL is primarily educational. NABL expressly does not pass on, and makes no representations as to, the experience or expertise of the lawyers listed in its “Blue Book.” NABL’s Website expressly states “Membership in the National Association of Bond Lawyers is not based upon and does not directly or indirectly imply competence, experience, or acceptance as an attorney rendering opinions in connection with the delivery of obligations issued by or on behalf of a state, territory or possession of the United States or a political subdivision thereof or the district of Columbia.”
Although, state bar associations have created “certification” programs for certifying the expertise of lawyers in various other legal specialties, none have created such a program for recognizing the expertise of bond lawyers. Attempts by bond lawyers in Florida and Pennsylvania to have those state bars create programs for the certification of bond lawyers failed. Thus, neither the “Red Book,” the “Blue Book” nor state bar associations provide any meaningful guidance as to the expertise of a bond lawyer.
Joe Mysak, editor of Grant’s Municipal Bond Observer, reported that there are more than 7,000 lawyers holding themselves out to be bond lawyers, stating: “Are there really more than 7,000 qualified bond counsel out there? We don’t think so.”
Both the National Association of Bond Lawyers and the Government Finance Officers Association have published recommended criteria to be employed by bond issuers for the evaluation of candidates for engagement as bond counsel. These criteria include, among other things, expertise, experience in similar financings, service delivery capabilities, lack of conflicts of interest and fees. Issuers of municipal bonds, and other parties to municipal bond financings, should make their own assessment of the suitability of the law firms and lawyers they engage, after due independent investigation.
In evaluating a bond lawyer for a prospective engagement, the expertise of the bond lawyer should be the primary criteria. Expertise is the combination of the knowledge, experience, skills, judgment and motivation the lawyer brings to the financing. An indication of a bond lawyer’s expertise is the number, variety and complexity of bond financing transactions in which the lawyer has participated. A demonstrated record of accomplishment in related areas of law may also be significant in a particular financing.