Settlements in Three Cases Had Little to Do with Demise of Heller, Observers Say
Managers at Heller Ehrman have blamed the firm’s dissolution on a downturn in litigation after three large cases settled within a short time. Many observers disagree with that assessment.
The American Lawyer concludes from its interviews with former Heller lawyers and outside experts that the firm failed for another reason: Its lawyers had lost confidence in firm managers. “More than 80 shareholders left the San Francisco-based firm in 2007 and 2008, some embittered, some merely frustrated, by a roller coaster of ever-changing strategies, faltering financials, and less-than-candid communication,” the story says.
The article identifies three critical decisions that were “turning points on the road to Heller’s death.” They are:
• The firm’s popular chairman, Barry Levin, was denied a third term in December 2004 because of term limits, a Heller tradition. One of his strong points had been listening to different points of view and forming consensus, attributes badly needed in the next few years.
• Heller cut about 60 lawyers in spring 2005. The cuts didn’t go deep enough, and remaining lawyers still had too little work to do. At the same time, the job cuts created dissension within the firm, “transforming a firm known for its collegiality into one with lots of sharp elbows.”
• In the summer of 2006, Heller embarked on an expansion plan even as it had unfilled office space for 450 lawyers around the country.
One former partner, Patricia Gillette, told the ABA Journal that she left the firm last year for “cultural reasons.” She believes law firms with cultures that emphasize profits and billable hours won’t be able to keep their lawyers because they will leave for law firms that pay even more.
