The proof was right there in Courtroom 19 at the federal courthouse. As more than 40 lawyers jostled for position in the tangle of cases born of the National Bank of Washington debacle, it was perfectly clear: The wreck of NBW has not been a disaster for everyone.

There were banking lawyers and litigators, securities lawyers and more. There were lawyers for those who lost big; lawyers for those they blamed. And there were lawyers for one-time directors, still locked in a bitter feud over a company now in bankruptcy and a bank that is no more.

The American taxpayer -- a party to the fracas since the government took over the bank -- was amply represented, too, by no less than three major law firms. Each sent two lawyers into battle in Courtroom 19.

There were so many lawyers that U.S. District Judge Royce C. Lamberth called a recess between two back-to-back proceedings Oct. 10 so his clerk could get all their names.

"This case is over-lawyered," one of the lawyers joked.

"This isn't a hearing," another lawyer said. "It's a D.C. Bar convention."

The scene should have been extraordinary, but in a strange way it was not. Like so many of the nation's business debacles, the demise of NBW has spawned a dizzying round of litigation, each new dispute requiring yet another law firm; each new wrinkle, yet another lawyer. The 40-plus lawyers in Courtroom 19 were a testament to the fact that even amid the economic chaos, lawyers are sure to prosper.

The bank may have died in August -- the victim of bad commercial real estate loans, ill-fated takeover bids and a wrenching internal war -- but the legal wrangling goes on.

The three hours in court that October morning made it easier to fathom how Washington Bancorporation, the parent of NBW, spent more than $11 million on legal fees in the final four years of its life. In 1989 alone, the bank company paid $5.2 million in legal fees -- more than half its after-tax income.

John J. Mason, the bank's last chairman, says it was like "a runaway freight train -- $300,000 to $400,000 in legal fees a month" when he arrived on the scene in June 1990 to try to salvage the faltering institution. "The bank wasn't making that much money. Sure I raised hell about it: I was damned upset."

The lawyers, to be sure, didn't cause NBW's demise. But as the bank sunk deeper into trouble, it was lawyers who continued to prosper and lawyers who saw their business boom.

Former WBC chairman Luther H. Hodges Jr. recalls it this way: "All I know is the banklost, I lost and the lawyers won."

The winners -- the firms paid by WBC -- include: Arnold & Porter; Wilmer, Cutler & Pickering; Dow, Lohnes & Albertson, and Gibson, Dunn & Crutcher, the Los Angeles firm of former Attorney General William French Smith.

All four firms are now in the uncomfortable position of finding their fees recorded in bankruptcy court for everyone to see.

The court records show that in the year before WBC filed for bankruptcy, Gibson, Dunn -- which put thousands of billable hours into the directors' complex intramural war and the frenzied attempts to sell the bank -- came away with just over $1 million. Arnold & Porter was paid $340,000 -- more than half of it the night before the company filed for bankruptcy. (That is standard practice in the field, where law firms handling a bankruptcy get an assurance that they will be paid.)

More fees are being generated these days by the next wave of litigation. Lawyers have ridden to the rescue of angry depositors and investors who are suing the company and some of its officers to recoup losses from a commercial paper default.

In NBW and other matters, the government is hiring more private lawyers than ever. Deluged with thousands of cases from S&L and bank failures, the Federal Deposit Insurance Corp. (FDIC) has hired 855 law firms around the nation and expects to pay them $500 million in fees this year. The new NBW lawyers are sure to get their share.

Some of the old NBW lawyers went to great lengths to collect what they felt was their due. Former WBC controller Robert Creighton recalls that last spring he jokingly nicknamed one Gibson, Dunn associate "the enforcer."

"They wanted payment the same day they presented the bills," Creighton said, and the enforcer came around to collect the checks -- an unusual procedure that gave employees the feeling that Gibson, Dunn lacked "confidence ... in their client."

"That is news to me," Gibson, Dunn partner John F. Olson said of the collection effort. He said his firm worked long and hard, called in its top people and ultimately made special arrangements to reduce its fees.

"I had no reason to believe ... and do not believe now that they were not fully satisfied with the quality and cost of our services," Olson said.

But when it came to "the enforcer," WBC had the last laugh.

On the eve of declaring bankruptcy, Creighton said, checks were made out for payment to two law firms. Arnold & Porter's check got signed. Gibson, Dunn & Crutcher's didn't.

Personalities Michael J. Madigan, a partner with Akin, Gump, Strauss, Hauer & Feld, has been named by President Bush to the D.C. Judicial Nomination Commission, which recommends judges for Superior Court and the D.C. Court of Appeals ... . Albert E. Arent, of Arent, Fox, Kintner, Plotkin & Kahn, gave $250,000 to his alma mater, the Cornell University Law School, for a new classroom. Dedicated Friday, it doesn't bear his name, but that of his one-time teacher and all-time philosophical hero, Henry White Edgerton, who served for 30 years on the U.S. Circuit Court of Appeals here ... . Senior Judge George Neilson, the only sitting judge in D.C. Superior Court who was appointed by President Franklin Roosevelt, stepped down last week. Judges and lawyers honored the 84-year-old jurist at a dinner Friday for his "first 50 years on the bench."

Footnote

D.C. lawyer Sally Katzen brings this story back from a recent ABA-sponsored tour of the Soviet Union, where lawyers met with Soviet attorneys who are revising the nation's constitution. When an American lawyer asked how they planned to treat human rights, the Soviet commission chairman replied with a knowing smile: "For us it will be in the body of the Constitution. It will not be an amendment."