Patton Boggs hires financial advisers to review capital structure, compensation system
Posted Mar 4, 2014 8:10 AM CDT
By Debra Cassens Weiss
After a “restructuring year,” Patton Boggs has hired advisers to review the law firm’s financial organization, according to managing partner Edward Newberry.
In an interview with the Wall Street Journal (sub. req.), Newberry said the advisers would review the firm’s capital structure and part of its compensation system. "It's not to do with viability,” Newberry told the newspaper. “We're not laying off any more people, we're not making more head-count reductions, we're not closing any more offices."
The law firm recently closed a New Jersey office and confirmed a drop in revenues last year of about 12 percent. The firm has shed about 100 lawyers since 2012. The New Jersey office was closed because of a substantial reduction in work as lawyers there concluded matters related to the Sept. 11 attacks.
The advisers include restructuring firm Zolfo Cooper, Newberry confirmed in the newspaper interview. Patton Boggs is considering the financial changes as it engages in preliminary merger talks with Squire Sanders.
The story notes that a few partners left Patton Boggs in January and February and says others are apparently circulating resumes. Some partners told the newspaper they are willing to stay with the firm as the talks proceed. "There's a path forward that preserves the firm, keeps us in the building and aligns us with a Global 20 law firm," the partner said.
Meanwhile, a Bloomberg Businessweek story notes the recent changes at Patton Boggs and ties some of its troubles to litigation against Chevron over environmental damage in Ecuador. Chevron is fighting the $19 billion verdict in the case. According to the story, the litigation “has cost the firm millions of dollars in billable hours with no prospect of a payout soon.”
The Bloomberg story concludes that Patton Boggs “seems likely to disappear into a merger—or just disappear.”