An Exodus Of Attorneys Out Of Irell & Manella
Who is leaving, where are they going, and what do the departures mean for the future of Irell?
After the recent disappointing bonuses at Irell & Manella, some of our sources predicted significant attrition out of the firm. We’re just a few days into the new year, and that prediction has come to pass.
But the departures don’t exclusively or even mainly involve associates. Instead, the exodus is being led by a pair of prominent partners.
John Hueston, who served as chair of Irell & Manella’s Trial and Crisis Management practice, and Brian Hennigan, who served as co-chair of the Corporate Crisis and White Collar Defense Practice, have left the firm. One source referred to Hueston as a “stellar attorney” with “a fair amount of work,” including a book of business big enough to get “his” associates made into service partners. A second tipster described Hueston as a “significant rainmaker” and Hennigan as “very well regarded.” As noted by the Daily Journal (sub. req.), which broke the news of their move, both are former federal prosecutors with many high-profile cases under their belts.
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The duo will be forming a new firm, Hueston Hennigan LLP, as set forth in their press release:
Nationally known trial lawyers John Hueston and Brian Hennigan today announced the formation of a new law firm focusing on high-stakes civil litigation and white collar defense….
They are joined by an all-star group of departing Irell partners, including Marshall Camp, Alison Plessman, Moez Kaba and Doug Dixon, and by Alexander Giza, most recently a partner at Russ, August & Kabat.
“We intend to build a leading, national trial and litigation law firm, focusing on high-stakes civil and white collar cases, but with a significant commitment to pro bono and public impact matters,” said Hennigan, who will serve as the firm’s first managing partner. Hueston, a former lead Enron prosecutor, agreed. “This is a once-in-a-career opportunity to create a focused, national trial practice with the best lawyers I know,” said Hueston.
The firm has big ambitions. Their press release quotes law firm consultant Peter Zeughauser’s comparing the firm to Quinn Emanuel, Boies Schiller, and Keker & Van Nest. Game on.
Zeughauser added, “The boutique structure allows them a little more freedom to pursue the types of cases they want to.” Translation: Hueston Hennigan may have greater flexibility in setting fees, like many boutiques broken off from Biglaw firms. Rigidity in rates has been an issue at Irell over the years. As one source said to us, “After 2008, when many firms were lowering their rates, or offering other discounts, Irell continued to raise rates. While [legendary litigator Morgan Chu’s] patent work has mostly been able to support these higher rates, I believe Irell finds itself increasing priced out of general litigation work, including bread-and-butter commercial dispute cases.” Perhaps things be different at Hueston Hennigan in this regard.
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According to the Hueston Hennigan website, which is already up and running, the new firm will have offices in Los Angeles and in Newport Beach. Those are, of course, the cities where Irell & Manella currently has offices — which makes sense, because John Hueston and Brian Hennigan are taking a significant number of Irell lawyers with them. Of the seven founding partners, six all are Irell alumni. (UPDATE (9:45 p.m.): Alex Giza was at Irell before joining Russ August & Kabat, the firm he left to join Hueston Hennigan.)
When all is said and done, the number of Irell lawyers joining Huston Hennigan could range from 25 into the thirties, sources said. Hueston and Hennigan told the Daily Journal (sub. req.) that they expect about 30 lawyers to make the jump.
UPDATE (1/7/2014, 2:50 p.m.): According to The Recorder, more than 30 lawyers will be leaving Irell for H&H. Irell’s headcount prior to the departures was about 187, so 30+ departures is significant.
“Apparently, a lot of attorneys — especially juniors — are being asked to leave Irell and join H&H,” one tipster told us. “[Irell] is a madhouse. Many of the young star associates are leaving and there will be a serious void. They are trying to stop the bleeding, but it’s tough.” Compensation at H&H is expected to be comparable to Irell.
One source of ours who will be joining the new firm shared this enthusiastic reaction: “I feel really excited. The new partners are all either living legends or rising superstars. I feel bad for my friends left behind, especially non-IP associates — the future looks a little more uncertain now.”
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Which brings us to the next big subject: what does this exodus mean for Irell & Manella? Several tipsters shared similar reactions:
- “I guess Irell has completed its transformation to a patent-only firm….”
- “[The departing lawyers account for] the majority of Irell’s non-patent work…. Irell has moved from a general-practice firm to a firm that just did patent lit and securities/white-collar [to] just a patent-heavy firm.”
This is not exactly a good thing, due to the reduced diversification and possible problems for IP litigation in 2015. As in-house counsel Mark Herrmann observed yesterday, “I’m hearing from partners at big firms that IP litigation is already starting to decrease slightly. And I’m hearing from others that the decline is likely to accelerate into 2015 and continue for a while.” He identified several developments in the law that are bad news for IP litigators — and he didn’t even touch a possible crackdown on so-called “patent trolls,” which could further reduce activity in the area if it ever happens.
This all takes us to the multimillion-dollar question: WWMCD, or “What Will Morgan Chu Do?”
For those of you not familiar with him — but if you’re reading Above the Law, you are surely familiar with him — Morgan Chu is perhaps the nation’s top IP litigator. He has been described by the Chambers Guide as “beyond doubt the most gifted trial lawyer in the USA,” who “delivers staggering results for clients.”
The first thing you need to know about Morgan Chu is that he’s a god of IP lit. The second thing you need to know about Morgan Chu is that he just turned 64 (on December 27; happy birthday, Mr. Chu). This means he’s less than a year away from hitting Irell’s mandatory retirement age of 65.
“There is a lot of uncertainty as Morgan is nearing the mandatory retirement age for the partnership,” one tipster told us. “If he decides to hang it up, I do not expect Irell to survive much longer. And for recruiting, I can’t imagine why anyone interested in anything other than patent would ever pick Irell in upcoming recruiting cycles.”
Could the firm perhaps make an exception for Chu, given his bulging book of business? We’ve heard vague reports that accommodations have been or are being made to keep Chu in the partnership past 65. But even if Chu doesn’t retire this year, “nobody can practice law forever,” as one Irell associate leaving for Hueston Hennigan put it.
We reached out to Irell for comment. Managing partner Andrei Iancu said of the departing lawyers, “We have enjoyed working with each of them over the years, and we wish them well in their new endeavor.” The firm did not respond to a separate query about the mandatory retirement age.
Congratulations to John Hueston and Brian Hennigan on the launch of their new firm. And good luck to Irell & Manella as it contemplates a future based even more heavily on IP litigation and (eventually) without the services of Morgan Chu.
(Flip to the next page for a former Irell lawyer’s long and interesting analysis of recent developments at Irell.)
