The third US law firm in as many months has announced it will be closing its doors in early 2009..
The Wall St Journal legal blog reports…
Thacher Proffitt to Terminate in 2009
by Nathan Koppel
When measured by law firm implosions, 2008 has to rank as one of the worst years ever for corporate law firms.
First Heller, then Thelen, and now Thacher Proffitt. Following the news yesterday that about 100 Thacherites were decamping for Sonnenschein, it was hard to figure how Thacher would survive. The firm, after all, had already been laid low after earlier layoffs and partner departures.
The root cause of the Thacher’s problems, of course, is the mortgage crisis, that mother of all misery which has decimated the market for mortgage-backed securities and other types of capital markets transactions. It is the sort of work that helped Thacher grow to more than 300 lawyers and post $1 million-plus in profits per partner, ranking the firm among the top 100 for profitability.
But yesterday evening, the 160-year old law firm made it official. “It is anticipated that Thacher Proffitt will discontinue the practice of law and will begin an orderly dissolution after December 31, 2008,” the firm said in a statement. “Although many avenues for a merger were explored, in the current economic environment it became apparent to the Committee that a merger could not be executed. As a result, and in light of severe reductions in revenue, it became clear that Thacher Proffitt would not have the financial resources to continue business operations in its current form into the new year.”
http://blogs.wsj.com/law/2008/12/23/thacher-proffitt-to-terminate-in-2009/
The author of My Shingle blog, Carolyn Elefant, comments in an article entitled No Security Beats False Security Any Day: Free Teleseminar on Why Biglaw Lawyers Should Start A Firm
And so, another biglaw firm — this time, 150 year-old New York based Thacher, Profitt — comes tumbling down. But though the names may change (think Heller, Ehrman, Thelen and Brobeck.com) the circumstances are virtually identical:
Step 1: Each firm suffers some kind of economic crisis.
Step 2: Rainmaking partners panic and begin to jump ship, taking valuable business with them
Step 3: Remaining partners can’t figure out how to reorganize so they pursue mergers with other firms which not surprisingly, have no interest in assuming liability for another firm’s economic woes;
Step 4: Merger talks break down, and more partners jump ship; while other firms (including those that those that spurned a formal merger or previously dumped their own unprofitable practice groups) cherry pick the lucrative remains while leaving the rest of the lawyers and staff to fend for themselves.
Read all of her piece at http://www.myshingle.com/2008/12/articles/biglaw-practice-and-issues/no-security-beats-false-security-any-day-free-teleseminar-on-why-biglaw-lawyers-should-start-a-firm/
Also see the story as reported by Bloomberg and Times Online UK
