Heller Partners Reportedly Told Dissolution is Possible

Law Firms

Heller Partners Reportedly Told Dissolution is Possible

Posted Sep 18, 2008, 04:56 am CST
By Debra Cassens Weiss

Partners at Heller Ehrman were told in a meeting yesterday that the law firm is considering dissolution, anonymous sources told the Recorder.

The firm hasn’t voted on the issue, but industry watchers said it may be the only alternative. Partners were told it was understood they would be looking for new jobs, an action that many are already taking, the story says. About 50 partners have already left the firm this year or announced plans to do so.

Recruiters told the Recorder that senior partners should have no problem finding homes at other firms but the job hunt could be more difficult for more junior partners, associates and staffers, given the difficult economy. A new blog started by a person identified only as “Heller Drone” gives employees a place to vent and offers suggestions.

Baker & McKenzie has called off merger talks with Heller, but it is “making a play for big chunks of the firm,” the Recorder story says, citing a legal recruiter as the source. Other law firms are talking to some of the firm’s practice groups, the story says.

At least two partners are moving to the San Francisco office of Jones Day, including Brent Cohen, the head of Heller's 30-lawyer real estate finance group.

The Daily Journal has reported that up to 40 of the firm’s intellectual property lawyers plan to leave the firm; the Recorder puts the number of IP partners leaving at 14 and includes the group in its tally of 50 some partners who have left the firm. Both publications say Covington & Burling is hiring the 14 lawyers.

Updated at 12:10 p.m. to clarify that 50 partners have left Heller.

Comments

Report Abuse

Posted by Anon - 2 months, 1 week, 6 days, 17 hours, 4 minutes ago

Just to be clear: the DJ puts the number at 40 *attorneys* while The Recorder puts it at 14 of 50 *partners*.
Posted by TSK - 2 months, 1 week, 5 days, 19 hours, 35 minutes ago

I know that those responsible for the ABA Journal are considered somehow exempt from the normal requirement that lawyers engage in rigorous thought and analysis of issues. But even they must have noticed that institutions which took the biggest risks in the past few years (and thereby made the biggest profits) are now suffering the biggest losses. Forget this obsession with personalities: it’s the policies and practices that count!
Posted by DCEsq - 2 months, 1 week, 5 days, 17 hours, 57 minutes ago

Hear, hear! There is little in the way of journalistic value to be learned from who is going where or who fears what outcome that will affect the ridiculously high salaries of these corporate lawyers. This is not a sympathetic constituency, alas. There have been no fewer than half a dozen articles in this issue alone bemoaning the current state of the corporate legal world and not one jot of analysis as to how this situation arose in the first instance. I am not holding out for the day that such analysis will be visited upon us by the ABA Journal, Inc.
Posted by LawComment - 2 months, 1 week, 4 days, 18 hours, 56 minutes ago

Any lawyer who is part of a firm with more than a few lawyers in it should be watching the Heller meltdown. The recent report that the firm may try to coordinate several groups going to different firms creates successor liability issues. If Heller does collapse and a Brobeck style liquidation follows, will the liability claims of the trustee extend to the firms who picked up large groups of lawyers? What about the 14 major office leases? Law firm bankruptcies and liquidations may become more risky for firms who take on large groups in discreet locations. If the Venture Group goes as a unit, will lease creditors and others try to follow it?

If the break up triggers malpractice litigation, where will the money to cover deductibles come from? Will claims spread out to the departing lawyers? Since Heller is actually a partnership of local corporations, how will its assets and liabilities spread out? Often, the most troublesome creditors are the office service outsourcing companies, legal research services like West and a few other service providers. It would be rare for a company going through the dramatic upheaval like Heller to maintain enough cash to keep those contracts current and renegotiate them prior to the dissolution. Ultimately, if the firms negotiating with large groups or offices see enough profit, they will accept the liability risk. In many firms that would be a hard sell to the existing lawyers.

Commenting has expired on this post.

ABA Journal - Law News Now

Law Firms