Heller Ehrman appeared on the brink of dissolution this week, with some partners already looking to move with what amounted to tacit approval from firm management, writes The Recorder.
In office meetings on Wednesday (17 September), partners were told that dissolution is one of several options facing the 119-year-old law firm, a Heller partner said. As a result, management said it was understood that partners would begin talking to other firms, and several individuals and groups have already begun talks, sources said.
It was unclear what options besides dissolution remained, but the firm has not yet voted on a course of action. Given the announcements in Wednesday's meetings, though, industry watchers say there are probably no significant alternatives left.
"If that is the truth, that's the end of Heller Ehrman," said Friedrich Blase, a consultant with Kerma Partners in
Wednesday's partner meetings came in the wake of two fateful revelations made earlier in the week: that merger talks with Chicago's Mayer Brown, Heller's second highly publicized suitor, had collapsed and that 14 intellectual property litigation partners were defecting to Washington DC's Covington & Burling. It is not clear what the dealbreaker was for the merger, but many suspect the departures. Including the batch on Monday (15 September), about 50 partners have left the firm this year.
Several current and former members of Heller's management would not comment, and a firm spokesman said, "We continue to consider our strategic options."
Wednesday's meetings were held amid a blizzard of gossip in the market as groups within Heller coalesced to begin talks with other firms.
At least two partners have already found a new home in Jones Day's
Several groups, including the capital markets practice headed by Nora Gibson, have also initiated discussions with other firms, people familiar with the situation said. The Venture Law Group, the
The group of IP litigation shareholders who are leaving the firm for Covington & Burling spans four offices. The
The partners leaving from
Baker & McKenzie, Heller's first major merger partner until talks fell apart in August over conflicts, is making a play for big chunks of the firm, according to one recruiter. A Baker spokeswoman did not return a call for comment on Wednesday.
If dissolution is on the horizon, it was unclear Wednesday how soon circumstances might force a decision. Current and former partners have uniformly said that the conservatively managed firm is in good financial standing, but some former partners expressed concern on Wednesday about the return of their capital contributions. The firm would also face decisions about what to do with the leases it holds for its 14 offices.
Heller was one of three firms on the Am Law 100 in 2007 to have seen a decrease in revenue, which chairman Matthew Larrabee attributed to a series of big litigation cases wrapping up early that year. In 2004, Heller ranked second on The American Lawyer's A-list, a ranking of firms based on a variety of factors, such as pro bono representation, associate satisfaction and diversity ratings.
The Recorder is a
