Recently in Dissolutions Category

With 2009 -- the most tumltuous year in the history of major law firms since the Great Depression -- now a full quarter behind us, we are poised to assess the extent to which the myriad changes then implemented in the universe of BigLaw seem to have taken root, and prognosticate a bit as to what we are likely to see in the three quarters to come. 

It would hardly be an overstatement to say that the 2008 debacle of Wall Street hit the world of BigLaw like a tsunami.  In October of that year, Thelen's management -- which was already on its last legs after its ill-fated acquisition of Brown Raysman only one year earlier -- began parcelling out entire sections of their firm.  At the same time Heller Ehrman, whose partners had voted to dissolve on September 26, was closing its cafeterias and starting to remove coffee machines from its numerous offices nationwide.  Like falling dominoes, one firm after another began throwing as much baggage overboard as possible in seeming desperation.  By the end of the month, Katten had laid off 21 attorneys, Sonnenschein 24 and Clifford Chance 20.  Even firm captains were jumping ship.  Thacher Proffitt's Vice Chairman lateralled to Greenberg Traurig and Thelen's Chairman was reported to be in talks to join Howrey.  Firms across the board were scaling back and in some cases eliminating their summer programs outright, forcing law students everywhere to consider debt forgiveness programs and alternative careers even before graduation.   

As the US Army engages in introspection with respect to its internal oversight in the wake of the Fort Hood massacre and the SEC does the same after the Madoff disaster, the government is clearly announcing that it will require no less of private sector supervisors than it will of itself.  In a recent example, the SEC is compelling the former general counsel and CEO of San Francisco investment bank Merriman Curhan Ford to pay for its failure to properly supervise David "Scott" Cacchione, who pleaded guilty to fraud in March for emailing customer accounts to William "Boots" Del Biaggio III in connection with a scheme to scam banks out of $50 million worth of loans:  "When you find major frauds at a broker dealer like this, you're going to naturally look at 'Where is the supervision?'" said Michael Dicke, the enforcement director of the San Francisco office.

In the midst of these current turbulent market waters, a total of 2509 partners at AmLaw 100 and 200 firms managed to successfully jump ship in 2008.  The biggest winners were K&L Gates (185 partner acquisitions), Reed Smith (74), DLA Piper (58), Jones Day (57) and Alston & Bird (53), while the biggest losers were Akin Gump (59 partner defections), Heller Ehrman (47 pre-dissolution), Thelen (46 pre-dissolution), Mayer Brown (45), and, K&L Gates (again) (40).

While our economy crumbles, the American public observes like lemmings as the Wall Street criminals who executed the greatest financial fraud in history add insult to our collective injury by continuing to openly steal billions.  Only now, instead of conning the world into believing that their excrement is some sort of sophisticated securities derivative too complex for non-Streeters to comprehend, they are referring to their cash grab as "bonuses."  Relatively insignificant sociopaths like Bernie Madoff can only aspire to sit at the desks of these miscreants whose greed may still prove monumental enough to bring us all to ruin.  We at Hanover Legal are certainly not the first to ask whether and when members of our legal community should have recognized and tried to put a stop to the epic Wall Street slight of hand.  However, we viewed our function as limited to servicing the financiers to whatever extent we were paid to do so, and as long as Moody's and S&P were signing off on these transactions with their highest ratings, who were we to raise an eyebrow? 

As we at Hanover Legal enter this new year and look back on BigLaw in 2008, we are reminded of the bibical tale of Lot's wife glancing towards Sodom and turning to salt.  So in the hope of avoiding a similar fate, we'll keep our retrospective analysis brief.

In the midst of all this dissolution hoopla, we would be remiss not to mention Brown Raysman, the once thriving New York start up that was swallowed up by soon-to-be former Thelen management in the latter's last ditch effort to salvage their Titanic.  So at least we know what Thelen was thinking.  But what about Brown Raysman?   No one ever placed them in the desperate category pre the ill-fated merger.

Over the last month we have seen venerable Heller dissolve and predict Thacher Proffitt and Thelen are not far behind;  relentless attorney hemorrhaging at these firms has already reached the top ranks with Thacher's Vice Chairman joining Greenberg Traurig and Thelen's Chairman reportedly in lateral discussions with Howrey.