More Info About The Morgan Lewis / Bingham McCutchen Deal

How many Bingham associates are being invited to join Morgan Lewis, and what will happen to Bingham's Kentucky back-office operation?

Details about the tricky transaction between Morgan Lewis and Bingham McCutchen have been hard to come by. And it might not be due to any hiding of the ball by Morgan Lewis; it might just be due to the fact that many of the details have yet to be worked out.

That’s a bit frightening to contemplate given the size and complexity of this “mass lateral hire” of 226 Bingham partners, plus an undetermined number of other lawyers and staff. But in light of how quickly the transaction transformed from a standard-issue merger into a new and unusual “hybrid” deal, the number of blanks to be filled shouldn’t shock anyone.

We can actually fill some of those blanks. How many Bingham associates have been invited to join Morgan Lewis? What is the fate of Bingham’s fairly new back-office operation in Lexington, Kentucky? Keep reading for answers….

(Please note the UPDATE added below about the fate of Bingham’s incoming and summer associates.)

First, on the number of Bingham McCutchen associates going over to Morgan Lewis & Bockius, we have this report from an MLB source:

I thought you might like to know that Morgan Lewis associates received an email last night asking to help with retention of the 225 Bingham associates receiving offers. This is the first information we at MLB have received about any non-partners joining the firm or, really, any information other than what has been in official press releases.

Sponsored

This number seems to make rough sense. Morgan Lewis has stated that it expects to have almost 2,000 lawyers after the Bingham-related dust settles. Pre-Bingham, Morgan Lewis had 1,400 lawyers. If it now adds 226 partners, 225 associates, and some undetermined number of other lawyers (counsel or of-counsel or staff attorneys), that should take it to within striking distance of 2,000.

So that’s what going on with current associates. What about future associates of Bingham, i.e., the law students who worked at Bingham as summer associates this past summer and received offers to start work as full-time associates in 2015? And what about people with offers to summer at Bingham next year? Sources report that these poor souls have received no communication yet about their fates — and are “flipping out” as rumors fill the void of information. The ones who chose Bingham over other firms to summer at might be regretting their choice right about now.

UPDATE (12:50 p.m.): A Morgan Lewis spokesperson issued this statement: “We have made offers to all incoming associates and summer associates to join us with the other lawyers from Bingham to whom we have made offers.” Yay!

Second, on the subject of Bingham’s back-office operation aka “Global Services Center,” some outlets (such as Am Law Daily) have reported that it’s an open question. But four different sources tell us that it’s not — and that Morgan Lewis has decided to wind down the GSC:

“Morgan Lewis appears to be closing the GSC after a meeting that took place in the office [yesterday].”

“Certain departments will lose their jobs on Friday, some will be gone at the end of the year, and all will be gone from the Lexington center in June. Do not know if anyone will be offered permanent positions.”

“Bingham: staff in Lexington currently being fired or given temp offers that end between 12/31-6/30.”

“My [spouse] works in the Lexington KY back office for Bingham. They are NOT going to be able to keep their jobs. From my understanding of the 11/17/14 announcement that was made, the ‘global services center’ will be shut down by June of 2015, with employees leaving in waves. They’re supposed to be emailing everyone [this week] with their official job end date.”

Sponsored

One can’t help but feel bad for Bingham staffers from around the country who moved themselves and their families down to Kentucky only to find themselves jobless a year or two later.

Finally, will Bingham avoid bankruptcy? Yesterday we cited sources who stated that Bingham will go through an orderly dissolution that will not include bankruptcy, with Bingham’s debt “paid and zeroed out by the end of the year.” But one wise tipster pointed out to us that sometimes the best laid schemes of mice and men often go awry:

As a former Howrey partner, I would note that Bingham’s intentions to dissolve with zero debt does not necessarily mean that the firm won’t end up in bankruptcy. Howrey’s remaining partners voted in a favor of an orderly dissolution too, only to have the creditors file an involuntary petition against the firm.

Remember also that there are other classes of claims besides landlords and vendors; there may be claims under the WARN Act, for example. Moreover, creditors may have a different perception or understanding of Morgan Lewis’s intentions and take the view that Bingham has been left insolvent once the partners, assets, and receivables are gone.

Yikes. We could be looking at a prisoner’s dilemma here. Let’s hope that Bingham’s creditors, perhaps comforted by the presumed backstop of Morgan Lewis’s coffers, show some patience and don’t do anything rash that could ruin the wind-down process for everyone.

We reached out to both Bingham and Morgan Lewis for comment. A Bingham spokesperson referred inquiries to Morgan Lewis; Morgan Lewis did not get back to us.

As you can see from the information we’ve shared above, we here at ATL can serve as a clearinghouse for information during these uncertain times for Bingham and Morgan Lewis. But we need your help to do so. Please email us or text us (646-820-8477) with information you have received so we can work together to assemble this puzzle. Thanks.

Morgan Lewis-Bingham deal is a unique transaction in law firm circles [Philadelphia Business Journal]
Bingham McCutchen May Be Playing the Bluegrass Blues [American Lawyer]

Earlier: A Closer Look At The Morgan-Bingham Deal
Bingham To Go Bust In Wake Of Morgan Lewis Raid
Bingham McCutchen Readies Itself For Rescue
Bingham Cancels Partner Retreat; Will The Morgan Lewis Deal Go Through?
Bingham McCutchen: Is The Patient Stabilizing?
The Rise And Fall of Bingham McCutchen
What Needs To Happen For the Bingham / Morgan Lewis Deal To Proceed
Law Firm Merger Mania: Bingham McCutchen And Morgan Lewis Reach A Deal

Scissors Cut Money

Enter your email address to sign up for ATL's Layoff Alerts.