As in-house columnist Mark Herrmann put it, “Dewey know who’s next?” No, we don’t. But we certainly have some guesses about major law firms that are existentially challenged.
Here at Above the Law, we do maintain a shortlist of Biglaw firms that could go under. But, truth be told, the list is not that exciting. With a handful of exceptions, the firms that populate it are big regional firms, not national or international behemoths, and they cluster toward the lower echelons of the Am Law 200 or NLJ 350. Put another way, no firm on our list boasts the size and stature of Dewey & LeBoeuf. (If you know of a firm that should be placed on our list, please email us, subject line “Biglaw Death Watch,” or text us, at 646-820-8477.)
But even if a firm isn’t a household name, lawyers and staffers will suffer when it goes under. Let’s hear about the latest large law firm that appears to be on the ropes….
Dow Lohnes, a former Am Law 200 firm with offices in Atlanta and Washington, D.C., has lost nearly half its lawyers over the past three years amid a spate of lateral defections.
Now down to fewer than 100 attorneys and hurt by the loss of key client Cox Enterprises, the firm is engaged in merger talks with possible suitors, according to a half-dozen sources who spoke with The Am Law Daily on the condition of anonymity.
It’s a sad turn of events. A little over three years ago, Dow Lohnes made the National Law Journal’s list of the 20 hottest midsized firms; now the firm seems to be ice cold (while other honorees, such as BuckleySandler, continue to thrive).
How did this come to pass? It’s the familiar tale of departing partners and clients:
This year’s attorney exodus began in February with the departure of D.C. lobbying and public policy partners Kenneth Salomon, James Burger, and Christopher Murray to Thompson Coburn. Salomon, a former chairman of Dow Lohnes Government Strategies, had spent 33 years at the firm.
In making the move, the group brought along a roster of lobbying clients that include Overstock.com, STMicroelectronics, and the Association for Information Communications Technology Professionals in Higher Education, according to sibling publication The Blog of Legal Times. Four months later, telecom regulatory partners Gary Lutzker and J. Christopher Redding left for Baker & Hostetler in D.C., with Redding joining the firm as of counsel.
What drove these defections? If I had to guess, I’d say compensation adjustments — or to be more specific, incorrect adjustments. The pain of declining business, including the reduction in work from Cox Enterprises, had to be distributed among the partnership. The powers that be might have spared themselves much of the pain and inflicted a disproportionate amount of it on their colleagues, who then decided to leave.
And the D.C. departures were just the start of the unraveling:
Then came an even bigger blow. Sibling publication the Daily Report reported in July that Dow Lohnes’s Atlanta office was undergoing a major shakeup thanks to Cox’s decision to rely on other firms for legal representation. The privately owned Cox — whose holdings include The Atlanta Journal-Constitution and Cox Communications, the country’s third-largest cable system operator — had until then provided the firm with an array of corporate, litigation, regulatory, and tax work. A former Dow Lohnes partner says that Cox was the firm’s largest client.
In other words, Atlanta is burning. The Am Law Daily piece chronicles the attorney departures that have taken Dow Lohnes’s office there from more than 30 lawyers to a mere 15.
“There have been several stories in the Daily Report on various lawyers who have left the Atlanta office,” an ATL tipster told us. “I am under the impression that the Atlanta office will basically be shuttered except for a few people handling media-law only work.”
Assuming that the firm continues to exist as a standalone entity. It seems possible that the firm could merge out of existence — if it’s lucky enough to find a partner:
Dow Lohnes leaders must now decide which path they will follow. Those familiar with the current situation are eager to see what transpires.
“It’s a good firm, and I don’t blame management, because it’s easy to play Monday morning quarterback,” says one former Dow Lohnes lawyer. “Mergers don’t always work. It’s such a tough market. The question really is — can the little guy survive?”
I might actually rephrase the question: can the medium-sized guy survive? Global firms with dozens of offices and thousands of lawyers seem to be fine, and elite boutiques with one or two offices and highly specialized practices appear to be thriving. It’s firms like Dow Lohnes — squarely domestic, with a few hundred lawyers, and limited offerings in terms of top-shelf, destination practices — that have to worry.
For a more detailed account of the dip in Dow Lohnes’s fortunes, check out the full Am Law Daily piece at the link below. If you have additional thoughts to add, about DL or any other law firm in distress, feel free to email us or text us (646-820-8477).
Defections, Key Client Loss Take Toll at Dow Lohnes [Am Law Daily]