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Former Thelen antitrust and bankruptcy heavy hitters join Winston

Antitrust litigator Robert Pringle and bankruptcy partner Richard Lapping are some of the headliners in a group of 19 lawyers that is joining the Chicago-based Winston & Strawn.

Large groups of lawyers have found new homes at firms like Nixon Peabody, Howrey and Robinson & Cole since Thelen announced that it would dissolve in late October.

Winston has a big-time Thelen connection. San Francisco managing partner Charles Birenbaum was a Thelen partner but left in 2003 after losing a bid to be chairman by one vote.

Pringle, the head of Thelen's antitrust practice, has a book of business between $5 million and $10 million and does antitrust work for Samsung and NEC Corp. Two other antitrust partners, Paul Griffin, second-in-command in Thelen's antitrust group, and Jonathan Howden, will also be joining Winston along with some associates.

Lapping was the San Francisco managing partner for Thelen and will be bringing over an associate who works in his bankruptcy practice.

Read the full Recorder article.

Thelen to vote on firm closure

Management at San Francisco's Thelen LLP has recommended that the firm close its doors on Dec. 1, according to the law firm.

The full partnership of the firm has seven days to vote on the recommendation, which the partnership council announced on Tuesday.

The dissolution, if approved, would be the second law firm in the past month to collapse. On Sept. 26, Heller Ehrman, another San Francisco firm, closed its doors.

Both Heller and Thelen hemorrhaged partners in the past year and, in recent months, faced bank covenants that trigger a collapse once a firm fails to maintain a minimum number of partners, said Peter Zeughauser, of the Zeughauser Group, a legal consulting firm based in Newport Beach, Calif. Both firms also had too many lawyers and not enough work, and both faced increasing costs amid the current recession, which resulted in declining revenues.

And it's no coincidence that both originated from San Francisco, Zeughauser said.

"San Francisco has become probably the second or third most attractive market in the U.S., after New York and maybe after Washington, D.C.," he said. "That's resulted in a lot of strong firms coming into San Francisco and competing for work there. And I think that did have an effect."

Thelen, which has lost 100 lawyers this year, has defaulted on its primary credit agreement given the number of partners who have departed, the firm stated in a press release issued on Tuesday. Three partners who serve on an administrative committee are in discussions with its bank regarding expenses, including salaries and accrued vacation pay for its employees, the firm said. So far, the bank has committed to paying for salaries, but not vacation, through Nov. 30.

Partners will receive minimum draws, but not profits, through Nov. 15.

"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 firm said.

Thelen was founded in 1924 in San Francisco as Thelen Marrin Johnson & Bridges, which specialized in construction law. In 1998, the firm merged with Reid & Priest, which added utility finance and energy expertise, particularly in renewable projects involving wind and solar power.

In 2006, Thelen merged with Brown Raysman Millstein Felder & Steiner, after which numerous senior partners departed, including name partners Peter Brown, Richard Raysman and Jeffrey Steiner.

In March, the firm laid off 26 associates and 85 staff members.

Merger discussions with Nixon Peabody failed several weeks ago.

Recent news reports indicated that Thelen chairman Stephen O'Neal and about 30 lawyers from the firm's construction and mass torts practice were in talks to join Washington's Howrey, and that Ellen Bastier, an energy partner, is anticipated to join Reed Smith along with several of her colleagues.

Earlier this month, Pillsbury Winthrop Shaw Pittman hired Thelen's China practice, which was made up of about 20 lawyers, including partners Joseph Tiano Jr. and Louis Bevilacqua, in Washington, San Francisco and Shanghai. The firm also took Washington partner Michael Jaffe and counsel Ronan McHugh.

Thelen's other practice areas are in corporate finance, antitrust and mass tort litigation, labor and employment and intellectual property.

The firm has 400 lawyers in seven offices: San Francisco, New York, Washington, Los Angeles, San Jose, Calif., Hartford, Conn., and Florham Park, N.J.

-- Amanda Bronstad

O'Melveny moves ahead with cost-cutting measures

O'Melveny & Myers has reduced its staff and associate headcount amid cost cutting measures that were announced this week, according to the firm and other sources.

According to the legal blog Above the Law, O'Melveny also has laid off five associates in its Los Angeles office.

The moves come as O'Melveny's profits per partner have remained at about $1.6 million, on average, during 2006 and 2007, mostly due to a drop in large private equity deals, and as many other firms, including Katten Muchin Rosenman, Sonnenschein Nath & Rosenthal and Clifford Chance, have laid off associates and staff in recent weeks.

On Monday, O'Melveny Chairman Arthur B. Culvahouse Jr. left a voicemail message to many of the firm's lawyers informing them of "cost cutting measures," according to a former partner, who agreed to speak on condition of anonymity.

In a prepared statement, Sonja Steptoe, a firm spokeswoman, said: "There have been no economic layoffs of associates at O'Melveny & Myers and there are no plans to conduct such layoffs. We are in the midst of our annual associate evaluation process, which began as scheduled in September and some associates, as is always the case, are receiving less-than-satisfactory performance reviews. It would be inaccurate to infer a layoff from performance reviews given to less than 1% of our associates and counsel headcount. Our lawyer headcount has not declined year over year. We simply are choosing to pay and to promote the large majority of associates who are working very hard and at high levels."

"With respect to staff," she continued, "we have prudently been reviewing and reducing our cost structure for the past eight months, following two years in which our expenses have grown faster than our income. During this period we have reduced operating expenses, including staff, to reflect technology-driven efficiencies, to bring staff ratios into alignment with competitive norms and to address redundancies that are not required to support the modern practice of law."

In 2006 alone, the firm lost about a dozen partners who specialize in private equity deals, restructuring and other transactional work, including the former chairman of O'Sullivan, a New York private equity boutique that O'Melveny acquired nearly seven years ago.

Last year, three partners who specialize in private equity, joint ventures and cross-border mergers at O'Melveny's Tokyo office left for Morrison & Foerster. Also last year, Raymond Wong, a capital markets partner at O'Melveny's London office, left for Paul, Hastings, Janofsky & Walker.

This month, two finance lawyers at O'Melveny left for Bingham McCutchen's Tokyo office, and John "Jack" Hardy Jr., the former co-chairman of O'Melveny's capital markets practice, joined Washington-based Venable's Los Angeles office. Also, three partners from O'Melveny who specialize in transactional work, joined the San Francisco office of New York's Shearman & Sterling.

Earlier this year, O'Melveny offered partners who were 50 years and older an early retirement package.

-- Amanda Bronstad

Chicago firm quietly opens Beverly Hills office

Wildman, Harrold, Allen & Dixon, a Chicago-based firm with 192 attorneys, quietly opened an office in Beverly Hills, Calif., last month after ramping up its team of 10 attorneys there so quickly that it couldn't get an office fast enough in Century City, Calif.

The firm is using the new office as a platform to expand its media and entertainment practice and build up its intellectual property expertise. While the firm had provided services for media and entertainment clients from Chicago, Managing Partner Robert Shuftan felt it could be more effective and focus on expansion by having a presence in Los Angeles. Some of its clients there now include Yahoo! Inc., MGM Studios, Viacom Inc. and its affiliate Paramount Pictures.

"This was clearly something we needed to do," said Shuftan, who leads the firm from Chicago.

The new office has space for 27 lawyers, but Shuftan expects to move into a larger space elsewhere on the west side of Los Angeles sometime within the next 18 months, he said. The office is the firm's only outpost outside its hometown. While Wildman has occasionally had other offices over the years, including one about a decade ago in London, it's never had a network of offices outside Chicago and isn't a part of any international law firm alliance.

The office is led by M. Kenneth Suddleson, the former vice chairman of Paramount, and has added to its roster from Kaye Scholer and Foley & Lardner. One of the more prominent additions was the hiring of Carole Handler, who was previously vice chairwoman of Foley's intellectual property litigation group.

The firm had contemplated opening the office for a few years and hired Nancy Derwin-Weiss in mid 2007 to build up a group of Wildman attorneys there. Five additional partners and four associates have been added since then. Wildman's three core areas of service are complex litigation, business transactions and intellectual property. The firm is focusing growth and recruitment on patent litigation, among other areas, Shuftan said.

-- Lynne Marek

Three laid off Heller Ehrman employees file class action complaint against the firm

Three laid-off Heller Ehrman staff filed a class action complaint yesterday, alleging the dissolving firm laid-off employees without paying them wages owed under federal and state laws as well as the firms employee contracts.

The complaint could potentially cover hundreds of terminated staff and associates.

Read The Recorder's full story here

Softer landings for Heller's IP associates

Associates specializing in intellectual property or patents for now-defunct Heller Ehrman have fared better than most of their former peers in securing new jobs, with three firms in the last week picking up 42 associates in teams of IP and patent lawyers.

Law firms have been plucking the bones of the dissolved Heller Ehrman firm for weeks, but many held back at including any of the 200 Heller associates, except for those in desirable specialties.

Foley & Lardner became the latest to announce on Monday, that it has hired a 10-lawyer team of IP specialists, led by David Kleinfeld, former co-chair of Heller's complex commercial litigation and IP practice to join Foley's San Diego and nearby Del Mar, Calif. offices.

On Friday, Seattle-based Perkins Coie said it would take on 13 lawyers from Heller's Madison, Wisconsin office, including nine associates specializing in IP and patents. Heller senior partners John Skilton and David Harth, as well as David Jones, a former assistant U.S. attorney, lead this team move.

Previously announced hires from Covington & Burling included 30 Heller associates, all patent specialists, along with 14 partners, to open San Diego and Silicon Valley offices.

Kleinfeld, who got Heller's San Diego IP operation off the ground a decade ago, said, "It was very important to me to keep the team in tact. I derived great satisfaction of building Heller's practice from the ground up… and the people who contributed to that earned a great deal of loyalty," he said.

He said he could not speculate on the reasons other firms have hesitated at taking on associates. "It doesn't make sense to me. A partner is going to need associates and a client is going to benefit from having associates at lower billing rates," he said. Kleinfeld said clients benefit in the long run as associates develop knowledge of a client's needs that may be helpful in any future litigation.

Two other announcements started this week with two Heller partners, Carl B. Johnson and Dan Titelbaum, joining the San Francisco office of Luce, Forward, Hamilton & Scripps. Johnson will join the San Diego-based firm's real estate practice.

He has represented major banks and lenders, developers and investors in real estate deals, including office buildings, shopping centers hotel and resort properties.

Titelbaum will join the business and corporate practice. He specializes in acquisitions, joint ventures, business disputes, corporate governance and project finance.

The third announcement saw Todd G. Glass, the former chair of Heller's energy practice, joining Wilson Sonsini Goodrich & Rosati 's clean technology and renewable energy practice in Palo Alto, Calif.

Glass represents project developers, financiers and utilities on development, purchase and sale of renewable and thermal generation projects, as well as financing and, state and federal regulation of the electric industry.

The Foley move to bring on Kleinfeld's team adds a group that has worked together on intellectual property issues and brings Qualcomm as a significant client.

Kleinfeld's team brings the total in the two offices to 56 lawyers, five patent agents and two technical specialists.

"From our standpoint, we viewed this as a cohesive, dynamic group," said Van Tengberg, managing partner for Foley's San Diego and nearby Del Mar, Calif. offices.

"They had a strong desire to stay together and had pending matters they had worked on, and they worked well together. The whole was greater than the sum of the parts," he said.

The Perkins Coie group adds to the firm's IP and litigation practices. Another member of the group includes Timothy Burns, going to the insurance coverage group, with eight IP litigation associates and one patent associate.

"We are committed to expanding our litigation capabilities and this group of highly respected lawyers will help our pursuit of that strategic goal," said Bob Giles, Perkins Coie managing partner.

-- Pamela A. MacLean

Backdating cases trigger feud between law firms

Coughlin Stoia is attempting to derail settlement discussions in two cases involving allegations of stock-options backdating, charging that the defense attorneys clandestinely excluded the firm from agreements that would resolve its lawsuits.

Attorneys for the defendants, Maxim Integrated Products Inc. and Affiliated Computer Services Inc., counter that Coughlin Stoia is pursuing such actions to obtain attorney fees, which would be nonexistent in the event of the settlements.

Read the full NLJ story

Theodora Oringher opens San Diego office

Los Angeles-based Theodora Oringher opened its third California office in San Diego, according to a press release.

Heading up Theodora Oringher's expansion and the new office is San Diego litigation and government relations attorney Jeffrey Lake.

The firm has 35 attorneys in L.A. and 15 attorneys in Orange County but couldn't specify how many will be hired in San Diego, a spokesperson for the firm told the San Diego Business Journal. (here) They are also looking into a San Francisco office, according to the spokesperson.

Heller dissolves today, echoes Brobeck's collapse

Heller Ehrman dissolution today revives lessons learned from the rapid collapse five years ago of San Francisco's Brobeck Phleger, whose partners faced liabilities for the firm's debt and lease obligations and numerous lawsuits.

In anticipation of potential employee issues that ended up in court following Brobeck's dissolution, an anonymous Heller staff person (and self-proclaimed former Brobeck employee) has launched a blog to avoid the same perils.

The prospects for Heller's remaining 550 lawyers look bleak and it's unclear how much Heller owes on its line of credit and whether individual partners are liable for those costs.

Read the full NLJ story here

Also:
"Struggling Heller Calls it Quits," The Recorder

Heller Ehrman dissolves tomorrow

Heller Ehrman's chair just told the firm's associates and staff that it will dissolve tomorrow, The Recorder reported. (here)

The Recorder cites a Heller staffer who attended the 1 p.m. meeting today.