Lawyers Flee, Layoffs Follow After Biglaw Firm's Pay Problems

Uh-oh! This firm is leaking lawyers like a sieve.

It’s been quite some time since we’ve spoken about the merger between Locke Lord and Edwards Wildman. After partnership approval from both firms, they officially decided to tie the knot in December 2014, and sealed the deal on January 10, 2015. As we noted from the outset of this deal, as with any law firm merger, it should have been expected for “some folks to leave, voluntarily or involuntarily, both leading up to and after the transaction.” Now, almost one year has passed since the Locke Lord Edwards combination came to fruition, and the aftermath has not been pretty.

According to a recent exposé in the Boston Business Journal, in the wake of the merger, once defections at Locke Lord Edwards started, they never stopped, and the firm’s Boston office has taken a major hit. Here’s more on the firm’s current sad state of affairs:

Since the end of April, 31 lawyers from the Boston office have left the firm, including 10 partners. Those departures represented more than 20 percent of the firm’s partnership ranks in Boston and over a quarter of its total attorney headcount in the city. …

The firm now has 95 attorneys listed in its Boston office on its website, including those who split their time between offices in other cities. In April, it had 118.

Fewer lawyers, of course, means the need for fewer staff members to support the lawyers who’ve yet to abandon their posts, so according to Locke Lord Edwards chair Jerry K. Clements, the firm has “adjusted the staff accordingly” — through layoffs. Clements refused to say how many staff members had been laid off since the exodus began.

If that’s not enough to make lawyers flee from Locke Lord Edwards like rats from a sinking ship, then perhaps this will be: the reason so many of the firm’s attorneys have been leaving is due to compensation issues (some of which stem from Edward Wildman’s pre-merger dire financial straits). According to inside sources who spoke under the condition of anonymity, because the firm was so under budget, the amount of money partners received in their monthly draws was reduced in late 2014, but it was too late; the acute drop created a situation such that some draws had already exceeded yearly earnouts.

The turn of the calendar brought the merger with fiscally stronger Locke Lord, but the combination did not deliver the stability that some legacy Edwards Wildman attorneys may have hoped for. After the merger, Locke Lord sent a memorandum to legacy Edwards Wildman partners that said any debt they owed the firm would be forgiven if they stayed with Locke Lord for the next two years, according to several of the lawyers. An attorney who has since left the firm described the offer as “almost like an indentured servitude.”

It seems that many of these departing partners have adopted a “debt be damned” attitude, despite the fact that Locke Lord Edwards claims they still owe money. Clements would not comment on the firm’s ongoing compensation issues, and neither would legacy Edwards Wildman attorney Matthew V. P. McTygue, the Boston office’s managing partner. Instead, McTygue only offered platitudes about hope for the future: “If you look at what Locke Lord has done with their other mergers, they have a consistent track record with making the firm more profitable, and I think we are all excited about that opportunity.”

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This merger may have catapulted Locke Lord Edwards into the future top 50 of the revenue-based Am Law 100 rankings and the future top 50 of the headcount-based Global 100, but if the firm doesn’t find a way to stop leaking lawyers like a sieve, there could be real trouble ahead. If these problems aren’t corrected, the firm may be faced with too many empty seats to bear for the next round of musical chairs. After all, as Kent Zimmermann of Zeughauser Group mused, “When you see the chair next to you empty, and the other chair next to you empty, it makes you [wonder] if you’re in the right place.”

Have you got the inside scoop on what’s going on at Locke Lord Edwards? Drop us a line.

If your firm or organization is reducing the ranks of its lawyers or staff, whether through open layoffs, stealth layoffs, or voluntary buyouts, please don’t hesitate to let us know. Our vast network of tipsters is part of what makes Above the Law thrive — we’ll never ignore you. If you have information to share, email us or text us (646-820-8477). Thank you!

UPDATE (2:30 p.m.): Jerry K. Clements, the chair of Locke Lord Edwards, has written an interesting rebuttal to the Boston Business Journal’s coverage of its post-merger woes. We’ve obtained a copy of her letter. Flip to the next page to read it in its entirety.

Dozens of attorneys leave one-time Boston law giant after pay shortfalls [Boston Business Journal]

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Earlier: Law Firm Merger Mania: Locke Lord / Edwards Wildman Deal Wins Approval

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