One of America’s best known litigation law firms is to dissolve on Friday, the apparent victim of a recessionary business environment and financial problems that have finally killed the 118-year-old firm.
San Francisco-based Heller Ehrman was involved in several failed merger attempts, including last week’s collapsed talks with Mayer Brown, but was unable to avoid dissolution. Fourteen IP partners also announced that they were leaving the firm.
As recently as four years ago the firm ranked second in American legal magazine The American Lawyer’s A-list ranking.
News of the dissolution was announced by Chairman Matt Larrabee (pictured) at a meeting that began at 1 p.m. Thursday, according to a Heller staffer attending the meeting.
Law.com report that Larrabee told all attorneys and staff that dissolution is unavoidable and that the partnership will voluntarily dissolve. Staff will be paid on Friday, Larrabee said, and indicated that under the federal WARN Act, associates and staff would be paid for the next 60 days. A small group of staff would remain beyond that date to handle the winding down of the firm’s business.
Also on Wednesday, firm chairman Larrabee sent out an email, apparently to all lawyers and staff, apologising for keeping discussions of the firm’s fate under wraps, and promising clearer communication later in the week.
“I am profoundly sorry that I have not been in direct communication with you recently. We realise that there has been a lot of news coverage about our firm, and it is wrong to have that be your source of information,” Larrabee wrote. He added: “We are planning to hold meetings with everyone before the end of this week via videoconference and/or local, in-person discussions.”
The 118-year-old law firm has hired a lawyer to advise on a dissolution, a current partner said earlier on Wednesday, as other firms continue to discuss recruiting Heller groups and individuals.
The firm’s management told the partnership that dissolution was an option facing the firm last Wednesday following the collapse of merger talks with Mayer Brown and the group of IP litigators announced their departure plans earlier in the week.
If the bank calls on the firm to pay its debt, partners may not receive their monthly drawings for September, removing the incentive to collect outstanding bills from clients, the current partner said. However, if the bank agrees not to call on the firm to pay its debt, partners could press clients to pay bills, enabling the firm to pay its debts and allowing the partners to leave in an organised way in large groups, the partner said.
Serious questions about the 118-year-old firm’s ability to survive were raised at the beginning of last week when merger talks with Mayer Brown collapsed and a group of 14 intellectual property partners announced they were leaving the firm.
As recently as 2004, Heller ranked second on The American Lawyer’s A-list, a ranking of firms based on a variety of factors such as profitability, pro bono representation, associate satisfaction and diversity ratings.