Death of Jenkens & Gilchrist
Today we learned that the law firm Jenkens & Gilchrist will shut its doors after being ordered to pay $76 million in federal penalties for its alleged role in creating illegal tax shelters. In January 2006, Rich Klein, President of Riverside Public Relations LLC in New York, wrote about the firm here to point out how a law firm cannot afford to ignore a brewing crisis that can ultimately destroy its long-held reputation.
Even the U.S. Attorney who announced the agreement with the firm today referred to the fact that the firm "has recognized ... that its tax-shelter practice has caused serious damage to its reputation, revenues and stability, and that as a result it ultimately cannot continue in business."
The Justice Department and the Internal Revenue Service have spent four years investigating Jenkens & Gilchrist and its promotion of shelters used to shield billions of dollars from taxes. Once numbering 611 lawyers, today the firm Web site lists only 163 lawyers.
The IRS said an estimated 1,400 wealthy individuals were affected by the firm's advice on tax shelters and will owe interest and penalties for underpaid taxes. Jenkens & Gilchrist, a 56-year-old national law firm based in Dallas, has been sued in recent years by wealthy investors who followed its advice and purchased the shelters.
Incredibly, the firm says nothing about the closure on its home page. There's only happy talk about "Gilchrist stays up on Main Street" and "Guidance to Summer Associates." The Web site's News section has an ironic item, "Corporate Relief After Hurricane Katrina (and other major disasters)." The Recent News & Information" has 378 items, none about the firm closing.
Denial is not a good marketing technique.
