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Posted on Wednesday, October 29, 2008
LawFuel - The Law News Network
Thelen LLP’s partnership council recommended to the full partnership Tuesday that the San Francisco firm shut its doors by Dec. 1.
The partnership has seven days to vote on the recommendation.
A statement released Tuesday blames economic factors for the decision, “including recessionary pressures and numerous partner departures over the past year, both of which have negatively impacted firm revenues.”
Extensive partner defections within a one-year period breached a bank covenant causing the firm to default on its primary credit agreement. The firm’s bank now has control over expenditures, according to the statement.
Thelen said it would try to pay employees 60 days salary in compliance with the federal and state WARN Acts, as well as all accrued vacation pay.
The bank said it would fund employee salaries through Nov. 30, but will not pay accrued vacation pay, the statement said. Both issues remain under discussion.
A three-partner administrative committee was appointed by management to work in conjunction with the bank to wind down. Partners will receive minimum draws through November 15 but not profits.
Thelen had been seeking a merger partner for several months to no avail.
“Unfortunately, the most promising merger opportunity was derailed by conflicts, and all other full firm merger discussions terminated last week,’ the statement said. A firm spokesman declined to name those firms.
When 84 year old Thelen merged with New York’s Brown Raysman Millstein Felder & Steiner in late 2006, it had as more than 600 lawyers. A steady exodus this year has left it with only about 400 today.
On Oct. 3, Pillsbury Winthrop Shaw Pittman LLP, a San Francisco-born rival, announced it had captured Thelen’s China practice.
Thelen is the second San Francisco law firm to dissolve this year. In September, Heller Ehrman LLP decided to close its doors after 118 years.
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