Clinton-Era Figure a Top Contender for AG

Currently a partner at law firm Covington & Burling in Washington, Holder has also served as a federal judge, appointed by President Reagan, and he later became the U.S. attorney for the District of Columbia, nominated by President Clinton. He left that post to take the deputy spot at the Justice Department.

Earlier this year, Holder headed Obama's vice presidential search committee with Caroline Kennedy.

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Although Holder has emerged as a front-runner for the attorney general spot, with Newsweek reporting that he has accepted the post pending a formal vetting process, the Obama transition team denied that report, saying that as of now, no job has been offered or accepted.

Legal sources also indicated to ABC News that others, including Gov. Janet Napolitano, D-Ariz., are in the running for the spot as the nation's top lawyer.

The man or woman who takes the spot as the nation's top lawyer will be saddled with many challenges, ranging from counterterrorism policies to a tide of financial investigations.

After the Alberto Gonzales era shook the department and demoralized staff across the country, righting the Justice Department will be no easy task.

Justice Department Inspector General Glenn Fine noted in a report last week that restoring leadership and confidence in the department is a top priority, after the scandals that swirled around Alberto Gonzales.

"The department's removal of the U.S. attorneys and the controversy it created severely damaged the credibility of the department and raised doubts about the integrity of department prosecutive decisions," Fine noted in his report.

During Gonzales' tenure, the department ousted at least nine federal prosecutors, a move lawmakers from both parties said was unfair or, at worst, smacked of political motivation.

Fine also wrote, "The department must coordinate effectively with the department's new leadership to accomplish an orderly and efficient transition. In addition to continuing to restore confidence in the department over the long run, the incoming attorney general must address in a timely way the serious challenges facing the department."