Cohen has a decade-long view into Trump's business, including proposed deals in Moscow and the former Soviet Union, as well as his presidential campaign.
He's arranged hush-money payments to women alleging they'd had affairs with Trump. He traded on his Trump connection to take in millions of dollars from global companies and a fund linked to a wealthy Russian.
Cohen's decision to change lawyers, reported earlier by ABC News, is "very significant" but the impact on Trump depends on what he knows and whether he cooperates, former federal prosecutor Renato Mariotti said.
"Even if he's cooperates, the question is what does he know and what is he going to tell prosecutors?" Mariotti said. "It's never a good thing when your lawyer flips. But we don't know how bad it will be for the president. It will either be an annoyance or devastating."
Federal prosecutors in Manhattan will be unlikely to strike a cooperation deal unless Cohen agrees to talk to both Special Counsel Robert Mueller and state and federal prosecutors in New York, Mariotti said.
"He's not going to get a cooperation deal unless he helps them make a case against someone they wouldn't otherwise get or moves the ball forward significantly against someone else," he said.
"If he gets a deal, he has to say what he knows about everybody, and he has been willing to cooperate with any state or federal prosecutors."
Cohen's change of course comes just days before a federal judge in New York is set to wrap up a review of evidence seized when the FBI searched his residences and offices in April.
Cohen's lawyers, Stephen Ryan and Todd Harrison of McDermott, Will & Emery LLP, represented him as a court-appointed special master oversaw which documents should be kept private because of lawyer-client privilege.
Ryan also represented Cohen when he testified to Congress.
The special master, retired judge Barbara Jones, reported this month that only 162 of the first 292,000 items she reviewed should be withheld on those grounds. Prosecutors seized as many as three million items.
The process has been expensive for Cohen. Harrison, a lawyer for Cohen, told Judge Kimba Wood in a hearing last week that his team has 15 lawyers and two data specialists "working around the clock" to review the material.
Wood said if they're not finished by June 15, she'll give the rest of the seized items to a government "taint team" - a group of lawyers separate from the prosecution team - to complete the review.
In April Cohen and his wife, Laura, put up their Park Avenue apartment as collateral for millions of dollars in troubled loans to their beleaguered taxi business, public filings show.
Their lender, Sterling National Bank, earlier this year granted a concession to a debtor facing financial difficulties who owed US$12.8 million; the timing matches the issuance of new liens issued by Sterling against the Cohens' assets.
Cohen sued on April 13 to try to block prosecutors from looking at communications protected by lawyer-client privilege. Trump and his company, the Trump Organisation, quickly joined in the suit.
- Bloomberg
