The Firms

May 26, 2011 12:09 PM

Report: Florida Firm Shutters Three Offices, Imposes Holdbacks on Pay

Posted by Brian Baxter

After months of layoffs and lateral defections, embattled Florida firm Ruden McClosky is closing its offices in Boca Raton, Miami, and Orlando, and imposing a 9 percent holdback on partner pay, according to the Daily Business Review, a sibling publication.

Firm management, the DBR reports, says that the moves are necessary in order to set Ruden on the right course. Hit hard by the real estate crash and economic recession, the Fort Lauderdale-based firm has seen many of its partners exit for other firms--click here, here, and here for previous posts on some of the moves--and felt compelled at one point last year to publicly deny that it might dissolve.

Facing a tough 2010 with fewer lawyers and offices--Ruden went from a 200-lawyer shop to an 85-lawyer outfit with 50 partners--the firm named Michael Krul as its new managing partner last November. Krul, chair of Ruden's corporate and finance practice for more than 20 years, vowed to stop the spate of departures and implement initiatives designed to streamline management to free up more partners for billable time.

The DBR recently obtained an e-mail sent by Krul on April 27 to all firm employees that contained details on the closures of three of its Florida offices. Ruden has also downsized its office in Tampa and is considering contracting its operation in West Palm Beach, the DBR reports. The moves are expected to save the troubled firm millions of dollars.

"Things are clearly moving in the right direction," Krul wrote in the e-mail cited by the DBR. "We still have a way to go and need your continued excellent work and support. The inflow of new work is on the rise, and our timekeepers are increasing their recorded time. This is a positive sign for improved revenues down the road."

The DBR reports that Ruden previously ordered an 18 percent holdback on pay in 2009 and reduced staff salaries by various amounts in 2010. The firm has also asked partners to sign personal guarantees to calm the nerves of its bankers at Wachovia, according to the DBR, which notes that Ruden also stopped paying former partner their equity repayments several months ago.

The moves appear to have stemmed Ruden's downward spiral. The DBR reports that Krul said in his e-mail that the firm will likely not have to reduce its staff further, and that its current attorney headcount of 64 is stable. The DBR has more details on the circumstances surrounding the office closures in Boca Raton, Miami, and Orlando.

Earlier this year another ailing Florida firm, Yoss LLP, shut its doors after its former cofounder had his law license revoked over ethics breaches. The firm, once known as Adorno & Yoss, had been considered the largest minority-owned firm in the U.S. That title now rests with Milwaukee-based Gonzalez Saggio & Harlan, which opened a Boston office in April by hiring a group that had previously worked at Yoss.

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