Bad Economy Forces Thelen Reid Out of Business
According to a report in New York Lawyer, the Partnership Council of 400-lawyer Thelen announced it voted to dissolve the firm. The firm expected to close on Dec. 1.
An early sign of trouble for Thelen Reid Brown Raysman & Steiner came last March, when the firm laid off 26 associates (which was 10% of their associates) and 85 members of its support staff, including members of the west coast marketing staff. In March the firm had 600 lawyers. Recent reports surfaced lately that top Thelen lawyers, including Chairman Stephen O'Neal was negotiating for a spot at to Howrey and rainmaking energy partner Ellen Bastier was on the cusp of joining Reed Smith
Thelen was an international AmLaw 100 law firm with offices in Hartford, Los Angeles, New York, Northern New Jersey, San Francisco, Shanghai, Silicon Valley, San Jose, and Washington, DC.
The news report says that about 60 lawyers could end up at Nixon Peabody -- which until recent weeks had been viewed as a potential merger partner for Thelen. "Was it a surprise today? No. Was it a surprise overall? Yes," a San Francisco associate told Law.com. "I mean, two years ago we were in a strong position."
"It's very disappointing, even though it was just a matter of time," said a legal secretary, asking not to be named. She will be at Thelen until the end of November, and said she doesn't know what's next for her. But even some partners don't know where they will end up, she added.
Thelen issued a press release saying there was no single reason for the collapse.
"The decision to dissolve the firm was precipitated by several economic factors, including recessionary pressures and numerous partner departures over the past year, both of which have negatively impacted firm revenues," the release said. "For the past several months, Thelen management has aggressively sought a full firm merger. Unfortunately, the most promising merger opportunity was derailed by conflicts, and all other full firm merger discussions terminated last week."
The news was another blow to the San Francisco legal community, which only a month ago saw the demise of century-old Heller Ehrman.
The firm, formed in 1924, merged with New York's Brown Raysman Millstein Felder & Steiner, but the marriage has since been widely viewed as problematic. Name partners Peter Brown, Richard Raysman and Jeffrey Steiner -- and more than 100 other Thelen lawyers -- have left this year.
"No partner in a San Francisco law firm will look at what happened to Heller and Thelen and not think, 'Will my firm be next?'" said Richard Gary, a legal consultant who was the chairman of Thelen from 1992 to 2003.
