Anatomy Of A Dissolution: Heller Ehrman’s ‘AIG Moment’
AIG, the American taxpayers’ very own insurance company, has taken a lot of heat for their company retreat full of facials and frivolity.
But in our own world of dissolving law firms, Heller Ehrman’s actions before the end have gotten far too little scrutiny. Yesterday, American Lawyer ran a story (subscription) about Heller’s 2007 partner retreat:
When Heller Ehrman partners gathered at Santa Barbara’s Bacara Resort & Spa in March 2007, there was already reason to be concerned about the firm’s future. Several practice areas were slow. The firm’s national and global ambitions were in disarray. And partners were increasingly skeptical about management’s ability to address the problems. But that weekend they were determined to laugh at this somewhat worrisome predicament.The final night of the retreat featured a $300,000 skit. Performers from the Los Angeles Opera, accompanied by a professional orchestra, portrayed Chairman Matthew Larrabee and other firm leaders frantically searching for a merger partner. “Some people were laughing, but I thought it was surreal,” says one former shareholder (Heller’s term for partner).
Heller people, here’s some free legal advice: if you can get from this post to Matt Larrabee’s house without thinking, it might be a crime of passion. But if you read through to the end of the post, you’ll have entered the cooling down period and you’re looking at murder 2.
Please, it’s not worth it. San Quentin is a bad place. Just click on the jump.
Our friend Heller Drone has been able to confirm that the firm really did spend $300,000 on bringing in the Los Angeles Opera to make fun of Larrabee, even though Heller associates were undoubtedly willing to do it for free.
This episode speaks to the “hidden” reasons behind Heller’s stunning collapse:
Heller died because its partners lost confidence in their leaders. More than 80 shareholders left the San Francisco-based firm in 2007 and 2008, some embittered, some merely frustrated, by a roller coaster of ever-changing strategies, faltering financials, and less-than-candid communication. Those who remained to the end shared the frustration.
ATL tipsters, I challenge you. Somewhere there has to be a video or at least some pictures of this $300,000 skit. Please find it. Leave no camera phone unturned. Hilarity will ensue!
Why Heller Didn’t Survive [American Lawyer] (subscription)
Fiddling While Rome Burns [Heller Highwater]
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first -y
bill frist
peter first
First - but undoubtedly not the last - to say MysTTTal.
larrabee's a douchenozzle.
bill clinton here first
What's a MysTTTal?
*performs skit for cravath in hopes of a summer offer...and i don't even charge anything!!!*
-nervous T-10 1L
email job leads to nervoust101l@yahoo.com
Those skits were always filmed. Evidence is there. The article neglected to mention that the skit was "inside baseball" laden with references to former partners (from the 80s and 90s) such that 85 percent of the lawyers in attendance (and 100% of the lawyers east of the Mississippi) had no idea what the skit was about. Oh yeh, and spouses and significan t others were present as well. It was awful. Thanks, Steve Bomse (he of the unlimited budget to produce his own ego-building skits).
Did anyone mention that Roy Firestone gave a less than riveting performance at this year's retreat at the Broadmoor?
Any more questions?
Finally a good post.
More of these posts and less of your leftist race-baiting, MysTTTal!
I make fun of Elie because I am a tier-two law student with $80k of loan debt in market that has left me jobless and desperately sending applications to the Wasilla D.A.'s office.
Some people in my school make it; however, ever since that B in Torts I am no longer in the top 1% of my class.
No matter, I will make asinine remarks about an editor on a legal gossip blog. A job I would leap at, if only I weren't so lazy, shameful, and gutless to apply for the open auditions in the last months.
Every fired lawyer post makes me curse the empty ink cartridges I change in my futile search for work. I am too unmotivated and too stupid to achieve and transfer to a school like Elie's, so I will make fun of a blog post instead.
I wish I could leave this path, but I have bought in too much to quit. I have drawn a pair of deuces and the last card was an ace.
I'm sorry.
10th!!!
BOOYAH!
HAMSTER ON A PIANO!!!!!!!!!!!!!!!!!!!!
http://www.youtube.com/watch?v=tRzTfgds0UI
these pretzels are making me fourteenthsies!
Its grainy cameraphone video, but here's the evidence ATL...
http://www.youtube.com/watch?v=Yu_moia-oVI
Was that a nice Elie post? All right baby - keep it up!
- a frequent critic
Much better Elie. More like this, please.
- another frequent critic
15 -- I think you posted the wrong link. Repost pls thx!
It is a good post, because MysTTTal made liberal use of the copy and paste function on his computer.
I agree with the above comments. Nice post, Elie.
Is 18 really that dumb?
Nice, 15.
The best thing about rickrolling is that even though its not what you're expecting, it's not really a let down. Don't be afraid to let a little Rick into your day to cheer you up.
15 -- Yeah, you definitely posted the wrong link. This appears to be Isaac Hayes lipsyncing over a video of a 15 year old white kid having an epileptic seizure set to a Milli Vanilli song. Weird.
Is 21 really that dumb?
23 - Apparently you need to read this:
http://en.wikipedia.org/wiki/Rick_roll
-An ATL Rickroller (not 15)
more importantly than stupid rickrolling is
HAMSTER ON A PIANO!!!!!!!!! if you wanna be cool just look at the damn video posted on comment 13. losers.
( . ) ( . )
*furiously adds skit performing skills to personal section in resume...right under pie making skills*
-nervous T-10 1L
email job leads to nervoust101l@yahoo.com
Eh, as a former Heller associate, I don't think spending a lot of money on this retreat was all that big of a deal. (Lord knows they wasted enough money on me during my summer.) It was a long time ago and it only looks like a huge waste of money in hindsight. Clearly, it was burning money, but every law firm does crap like this.
Guys at my high school used to put on surreal skits all the time, it was no big deal.
the nervous T10 1L thing is getting old...
Why is this even a story? AIG is a public company with tons of shareholders who had just received a government bailout with taxpayers money. Heller is a law firm and these guys were blowing their own money.
Good post, big guy. Keep up the good work.
31: Like a caterpillar, nervous T-10 will morph into something beautiful in time. I expect great things from his repeated efforts to find a job in the coming months.
T10 1L -- Why don't you just clerk for a prestigious COA judge?
No, they were not blowing their own money. They were giving themselves dividends when the time when they couldn't meet their financial obligations was soon coming.
Solid post, but you took it one punchline too far with the San Quentin stuff.
You gotta know when you've said enough.
Nervous T10 1L: I saw it the first time when it was called TOMMY BOY. Get some new material, lame-o.
As much as it looks bad in hindsight, Heller Ehrman had no debt at the time.
39: just like they had no debt at the time of dissolution? The shareholders have been spewing that line of crap for years. I guess if you consider $40-60 million of debt "no debt," then it's true.
Again, they had no shareholders. If they wanted to burn it, that's their business. If they owe you, get it if you can, suckers.
Hey 41, what the hell are you talking about? Who had no shareholders? Heller Erhman? Duh, that's exactly what they were - shareholders - that's what they were called at Heller. This is areally hard to stomach especially when a lot of us are owed weeks and weeks of accrued vacation pay - some up to 6 weeks worth. One thing Heller did know how to do was waste money. Look at all the ridiculous directors they put on the payroll.
41 = Matt Larrabee
Hey 42, since you're so far above it all, were YOU in admin or a "manager?" If so, then STFU. You were just as much overhead as everyone else.
44, you make no sense. 42 is just another employee that got screwed. Stop drinking the kool-aid.
What is this 'no debt at the time of dissolution' nonsense? I've seen no credible statement anywhere that that was the status in mid-September when the decision was made. My impression is that debt was up around $40 MM by Jan. 08.
OTOH, it does seem possible that the Larrabee insiders obscured from the partnership generally how much debt had been incurred.
Fact: Larrabee and the insiders concealed the debt situation from 95% of the shareholders until the fatal blow of the Covington defections and the Mayer Browne merger collapse.
Fact: The shareholder retreats were NOT universally enjoyed by everyone, and were largely viewed as a vehicle for the California side of the firm to pat itself on the back and for Steve Bomse to take his unlimited entertainment budget and put on a skit that he wrote and often directed. Most of the junior shareholders would have gladly taken the retreat cost in compensation, rather than wasting 3 days listening to motivational speakers (yes, Roy Firestone) tell us how Matt "got it."
Fact: While former employees will not shed any tears for the shareholders, note that they were NOT all created equal, and many if the junior shareholders likely made less money this year than the glorified managers: Kirk, Holdrup, Scott, Hawkins. Who would have thought servicing Matt and the leadershio could be so expensive?
WTF is up with saying this article ran "yesterday" -- I read it over a week ago.
This wasn't a good post. The underlying premise was good, but once again MysTTTal's horrible sense of humor ruined it. Lat or Kash would have done a much better job with the same story.
I thought that was Elie on the piano eating some cheese.
11 is now on suicide watch. Someone needs to take his/her shoelaces away.
I'm sure there are many "interesting" behind the scenes videos from that shin dig?. Wonder what it cost to sanitize the place after they left?
Heller attorneys don't need to worry about prision... they just corrupt DOJ attorneys to "overlook" victims reports then set em' up in private practice after they resign... like Miles Ehrlich, Marcia Hatch's criminal defense attorney. Maybe her money laundering group paid for that bash. Perhaps Ehrlich knows?
For more visit http://www.evilesq.com
I'm sure there are many "interesting" behind the scenes videos from that shin dig?. Wonder what it cost to sanitize the place after they left?
Heller attorneys don't need to worry about prision... they just corrupt DOJ attorneys to "overlook" victims reports then set em' up in private practice after they resign... like Miles Ehrlich, Marcia Hatch's criminal defense attorney. Maybe her money laundering group paid for that bash. Perhaps Ehrlich knows?
For more visit http://www.evilesq.com
I'm sure there are many "interesting" behind the scenes videos from that shin dig?. Wonder what it cost to sanitize the place after they left?
Heller attorneys don't need to worry about prision... they just corrupt DOJ attorneys to "overlook" victims reports then set em' up in private practice after they resign... like Miles Ehrlich, Marcia Hatch's criminal defense attorney. Maybe her money laundering group paid for that bash. Perhaps Ehrlich knows?
For more visit http://www.evilesq.com
Fact: There were retreats just about every year of the Shareholder retreats. This year was the worst retreat EVER - two nights off-site (which costs A LOT more than having a meal at the Broadmoor), BAD entertainment but no skit. The shareholders would have welcomed a Bomse skit over bad rodeo skits!
Fact: As has already been side, more money was wasted on BAD Chiefs and Directors: Scott - who wouldn't take any kind of public transportation, always had to have a car service take him two blocks or two miles. And EVERYTHING revolved around a meal. That's about the only way you could talk with him about anything because he never returned emails or phone calls; Kirk - she knew how to bat her eyes and manipulate all the men in management to get whatever it was she wanted, even baseless hires. Sanders - his department had the biggest revolving door and was riddled with so many incompetencies that he alone was costing the firm money. I'm just surprised that there were more law suits against him given all the inappropriate comments he ALWAYS made - every meeting started off with, "first, let me tell you a joke, it's the only clean joke I know: - this from the head of HR. Biggest loser of them all.
55, is English a second language for you, or were you just extremely hammered when you posted? You sound almost as bitter as 54, who is a total moron, of course. And clearly, you have issues with a small group of upper admin management, since you're probably the same person who keeps posting the same shit every chance you get.
Maybe you should get some sleep and try to be coherent again some other day.
Well I'm not going to declare whether it's a fact, but you know as well as I do that the Chiefs/Directors are not the reason the firm failed.
In fact, the chief / directors had a lot to do with the firm's failure. The admin staff alienated so many partners, who eventually left the firm, that the institution was crippled. Partners (shareholders) who could leave, did, and many of those who stayed behind (who couldn't leave because they had no real book of business) were left with the mess. This is just a guess, but I'd say half the shareholder departures during the firm's final 18 months were caused directly by the bad atmosphere generated by the chief / directors. Of course, it was the firm's management who let the chief / directors run wild, and who therefore are ultimately to blame.