Bankruptcy

How One Major Law Firm Closes

By J. Michael McBride

The economic crisis has drastically affected Wall Street law firms as well and those in the broader financial markets. One law firm, Thacher Proffitt & Wood, which has existed for 150 years will be winding down, having made a deal for 100 of its lawyers and many staff members. This number probably represents about half its lawyers, although that is a hard figure to estimate since many lawyers have already left the venerable firm. The Thacher firm has been in talks with other law firms in a effort to save itself. But there was evidently not a deal to be had to be absorbed as a going concern, so then the effort changed to one of providing a home for as many lawyers and staff as was possible. The two firms which were in talks with Thacher were Sonnenschein and King & Spalding. The “winner” was the Sonnenschein firm who was willing to hire more attorneys than was King & Spalding.

“The deal Sonnenschein offered the Thacher lawyers, though, came off as much more appealing than the one King & Spalding had on the table. Sonnenschein was willing to hire 25 more lawyers than King & Spalding's latest offer, a source at Thacher says. Sonnenschein also was willing to hire more support staff, allowing Thacher to save more jobs.

Sonnenschein also allows Thacher, at least for part of next year, to remain in some of its space at Two World Financial Center in downtown Manhattan, an important factor for Thacher given its historical roots. Thacher Proffitt had offices in Two World Trade Center on Sept. 11, 2001, and remained committed to downtown Manhattan's revitalization, McCarthy says.
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The Thacher Proffitt partners also are hopeful that they will be able to keep a $500,000 contract with the Treasury Department. Thacher put in its bid for the contract Dec. 2, and won it Wednesday. The partners on the contract -- McCarthy, Eric Klingenberg and Jeffrey Murphy -- are all joining Sonnenschein, though the firm has not yet spoken with the Treasury Department, Portnoy says.

What's left now is to take apart Thacher. McCarthy says the firm has spent Monday informing associates and staff of the news. The 60 associates that'll come to Sonnenschein have not yet been picked. It's unclear what will happen to the remaining 75 lawyers, including 14 partners. Dissolution is imminent, though, and expected by Dec. 31. The Thacher lawyers will begin work at Sonnenschein the next day.”

Here is a link to the article from which these quotes are taken:
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http://www.law.com/jsp/article.jsp?id=1202426974743

Michael

Full post as published by Texas Lawyer Blog on December 23, 2008 (boomark / email).