Legal News

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.”

Here’s a WSJ article on the firm’s impending wind down. “It has been the worst year for the legal market in many decades and maybe ever,” Elliott Portnoy, the chairman of Sonnenschein, told WSJ. Sonnenschein’s lay-offs of about 60 lawyers earlier in the year, he said, gave it the economic boost it needed to bring on the Thacher group.

The question becomes what happens to the 100 or so Thacher lawyers who are not joining Sonnenschein?

Full post as published by Law Blog - WSJ.com on December 23, 2008 (boomark / email).