Morgan & Finnegan Saga Supports Theory of Endangered IP Boutiques
The conventional wisdom is that intellectual property boutiques are an endangered species, likely to fail as partners are lured to higher-paying large law firms where they can grow their practices.
The demise of Morgan & Finnegan, which dissolved in February and filed for bankruptcy a month later, supports the naysayers’ predictions, IP Law and Business reports. The law firm imploded because it failed to grow, to retain its lawyers and to bring in a “critical mass” of patent litigation, the story says.
Former partners also criticized Morgan & Finnegan’s laid-back management that failed to quickly react when a star litigator, Chris Chalsen, jumped to Milbank, Tweed, Hadley & McCloy in 1998.
“Instead of making things happen for Chris—giving him greater income share and greater management control—professional jealousy got in the way,” one former partner told IP Law and Business. “Management should have squelched that right away and encouraged a meritocracy. Instead, management let partners who weren’t pulling their weight have too much say.”
At its peak, Morgan & Finnegan employed about 100 lawyers, about a third of them partners. In the years that followed, more lawyers left. In January, only 17 partners remained; Locke Lord Bissell & Liddell hired 13 of those partners, among 30 lawyers hired from Morgan.
“To some extent, Morgan & Finnegan was hit by a wave that has wiped out a chunk of the IP boutique market,” the story says. “Lawyer defections killed Lyon & Lyon in 2002. Pennie & Edmonds dissolved in 2003. And Fish & Neave merged with Boston-based Ropes & Gray in 2004.”
To succeed, patent boutiques need more lucrative litigation work than prosecution matters. One firm that appears to have found the right balance, according to the story, is Fish & Richardson, which has 450 lawyers in 12 offices.
