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March 8, 2011 5:38 PM

Associate Confidential: Keeping Careers on Track Amid a Firm's Collapse

Posted by Victor Li

 

Scott Andrews was having trouble accepting what was happening around him.
 
It was late 2007 and Andrews, a second-year litigation associate at Heller Ehrman, was trying not to dwell too much on the steady stream of partners exiting over the past few months. Or the regular reports in the legal press and online about Heller's precarious state. Or the generally gloomy mood pervading the office. Andrews, a graduate of the University of California, Berkeley's Boalt Hall School of Law who joined Heller in 2006 after clerking for a federal judge for a year, liked his job and the firm, and hoped things would start looking up.
 
Still, as Andrews thinks back, he knew Heller was doomed. His wife was even more certain. Chloe Andrews, also an attorney, had once worked at a firm that was absorbed by another. She recognized the signs of a law firm in trouble. By the end of 2007, after several high-profile rainmakers left Heller and nearly 65 staff members were laid off, she suggested to her husband that he look for a new job. He resisted. "I was in a little bit of denial and defended the firm and offered reasons why she was wrong," he says.
 
Chloe Andrews's instincts, it turned out, were right. On November 28, 2008, Heller closed for good. Scott Andrews stuck it out until about a month before the end, joining Farella Braun + Martel, a midsized San Francisco-based firm focusing on transactional and litigation work.
 
For Andrews, the year preceding that move was, to say the least, challenging--especially considering that it came so early in his legal career. And he wasn't alone. From late 2008 through the end of 2009--a stretch that saw the failures of Heller, Thacher Proffit & Wood, and Thelen--hundreds of Am Law 100 associates found themselves in the uncomfortable position of working at firms sliding toward extinction. So what became of those lawyers? And how did they keep their careers on track amid the collapse of their firms? The questions are particularly relevant now that another large firm reportedly is on the brink of breaking up. The firm in question, of course, is Howrey, which in a little more than a decade has gone from a one-office, Washington, D.C., antitrust boutique to a 13-office global powerhouse to a business on the verge of a vote to dissolve.
 
Lost in the hoopla over Howrey's fading financials and fleeing partners: what happens to the firm's 100-plus associates. The biggest concern, naturally, is jobs. On that count, veterans of Heller, Thacher, and Thelen can speak from experience.
 
Above all else--and though the advice may in some way come too late to be useful--associates must put their careers ahead of any loyalty to the firm. "People at Heller trickled out for a long time, and those of us who had a strong belief in the firm stayed," says Andrews. "That caused a lot of people to end up jobless, whereas they might have found something had they gone out earlier. It's hard to find a job when everyone else is looking."
 
Given that among Howrey associates, everyone either is looking or likely will be soon, the next thing to consider is whether following a departing partner to another firm is an option. Not all partners, Andrews notes, can bring along associates when joining a new firm. "[I]t's not always the partner's decision," he says. "If the firm they're going to already has underutilized associates, then that firm will be reluctant to absorb additional associates." Still, Andrews believes that it's a good idea for associates to let the partners they work with know if they're interested in making a move. "It's better to find out sooner than later" whether such a move is even possible.

Christopher Lewis, a former structured finance partner at Thacher, agrees. Lewis says that associates should approach and talk to partners as much as possible about whether or not they can follow them, as awkward as that might seem. "Your job is on the line, so now is the time to swallow your nervousness and have that conversation with the partner," says Lewis, who was at Thacher until the firm dissolved on December 23, 2008. "You have to ask yourself: What is more important? Being nervous or being out of a job? Once you look at it that way, then you usually find your inner strength pretty quickly."
 
The stress of launching an involuntary job search is only part of the emotional challenge confronting associates at a failing firm. Adam Bergman, a former Thelen associate, remembers life at the firm being extremely tense and depressing as the end approached. "It was tough dealing with the constant gossip and hush-hush talking," Bergman says. "People were interviewing for new jobs. No work was being done. All you saw was boxes."
 
Bergman was nonetheless at ease because he had decided he wanted to leave the law. (He ultimately launched a tax and financial consulting firm.) Still, there were practical matters to contend with, some of which could crop up for Howrey associates. For instance, Bergman believes that when it dismissed him, Thelen violated the federal Worker Adjustment and Retraining Notification Act (WARN), which requires employers to pay employees for 60 days following notice of mass layoff or dissolution. Bergman sued Thelen, its partners, and several firms that took on Thelen attorneys in November 2008, alleging that he wasn't compensated for lost vacation time and was paid for 30 days, rather than the required 60. The suit was dismissed in November 2009, though a claim for money owed remains tied up in Manhattan bankruptcy court. The episode left a sour taste in his mouth. "There were a lot of partners that didn't handle things properly," Bergman recalls, "and I lost a lot of respect for them."

Lewis, the former Thacher partner, says he was saddened by his firm's closure. He didn't, however, let those feelings stand in the way of immediately looking for--and landing--a new job through a former Thacher colleague who had moved over to Edwards Angell Palmer & Dodge. Such networking is the key to salvaging a career in the wake of a firm's collapse, says Lewis, now the general counsel of Alaric Compliance Services. "Make a list of everyone you've ever worked on a deal with, everyone you went to school with, everyone you know and reach out to them," says Lewis. "You want to rely on your armada of skills. Maybe you can rediscover a practice area that you had drifted away from. Maybe you can look at nonlaw jobs."
 
Kate Patterson, a San Francisco-based legal recruiter and co-owner of Patterson Davis Consulting, agrees that associates must take an aggressive approach to the job search--even in a market that's slightly better than it was in late 2008. "A smart young lawyer in today's marketplace owns his or her career and does not defer to outside mechanisms like on campus interviewing or head hunters," says Patterson. "Head hunters can be good resource, but they are not there to find a job for you," she says.

If nothing else, watching your job evaporate along with your firm offers a good opportunity for taking stock. Bergman, for example, realized he just didn't want to be a lawyer anymore. "Who knows? If Thelen didn't go under, I might be sitting in a law firm now, doing tax research and working all night," says Bergman. "Instead, I'm doing something I like."

Ultimately, that seems to be the main lesson these battle-tested veterans have to offer: Do what's best for yourself. After all, "there isn't much benefit in going down with the ship," says Andrews.

 

Contact Victor Li at vli@alm.com

 

RELATED ARTICLES

 Thacher Pursues Former Associates Over Bar Loans
Legal Times, 03/09/2009

240 Thelen Ex-Associates, Staff Could Assert Claims Alleging Violation of WARN Act
The National Law Journal, 2/27/2009

How Thacher Proffitt Came to an End
The Am Law Daily, 12/22/2008

Thelen Launches Dissolution Vote, Nixon Launches Offers
The Recorder, 10/29/2008

As Heller Is Sliced and Diced, Many Associates Are Out in the Cold
The National Law Journal, 10/15/2008
 

 

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Thanks for writing about this. Most of the coverage has focused on what's happening to the partners - who cares about them?! Not me. They have all the power - they OWN the firm that is going under. The associates are the most vulnerable ones here, and the ones we should care most about.

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