When Heller Ehrman dissolved in late September, associates and employees were informed via a firm-wide email.
Since then, Heller management has had email communication with employees, but (to our knowledge) they have not revealed their official dissolution plan.
We got our hands on the 43-page operating document. In addition to a detailed discussion of the firm’s balance sheet, the plan lists the firm’s priorities during the dissolution. One priority is to preserve and protect the firm’s assets “for the benefit of, first, the creditors, … and thereafter the Shareholders of the firm and the former Shareholders of the firm.”
The full dissolution plan can be downloaded below. Check it out and see what interesting nuggets you find.
If any Heller Ehrman attorneys were hoping that a major firm would sweep in and hire a whole bunch of Hellerites, the Dissolution Committee is warning you not to hold your breath. The Recorder reports:
On Tuesday, Peter Benvenutti, the chairman of the dissolution committee now controlling the firm, confirmed whispers that Baker & McKenzie and Winston & Strawn, both one-time merger candidates, had withdrawn proposals to pick up large groups of lawyers and their expensive real estate. While Benvenutti would not say whether deals on this scale are being discussed with any other firms, he did say there’s interest in taking over certain of the firm’s leases, and “we expect to have clarity in a day or two.”
At this point, why would Baker or Winston Strawn take on expensive lawyers when they can just sit back and cherry pick the superstars they want? We haven’t heard any story of a Heller rainmaker saying “If I come, these 30 people are coming with me.”
Heller Ehrman continues to stave off involuntary bankruptcy, despite not being able to pay employees their accrued vacation time. But Heller’s breakup continues to take weird twists.
The latest bizarre news comes from Seattle, where some associates have wondered whether they are about to be evicted from their offices. Tension was so high that Heller management had to send around a clarification email:
TO ALL HANDS (SEATTLE):
I have heard various rumors in the hallways to the effect that the Seattle office will close imminently and therefore that everyone needs to move out pronto. To clarify, here is the status.
The landlord has not issued a notice to vacate. If such a notice were issued, the notice period would be ten days. For reasons too long to explain, we overpaid rent throughout 2008. When those overpayments came to our attention, the firm asked that they be applied to cover (completely) the October rent obligation. The landlord has since asserted that the overpayments instead should be applied toward a fee that was due in connection with our give-back of space on 58. The Dissolution Committee is working with our outside counsel and communicating with the landlord to hopefully resolve this issue, and to clarify with the landlord any issues relating to removal of property from our space. To the best of my knowledge, closure of this office is not imminent and the date of closure remains to be determined, based on the pace of collections versus ongoing costs and also based on the banks’ decisions about what spending they will approve.
A law firm on the edge of solvency “overpaid” their rent? We hope that the explanation for this oversight is too long and difficult to get into, but we wonder if it is just too embarrassing.
Associates that we are speaking to say that it is just starting to sink in that they will be out of a job soon. Hopefully the Seattle associates will get as much time as possible to come to grips with this reality, instead of showing up at the office one day only to find locks on the door.
Update: The Blog of the LegalTimes reports that Arnold & Porter has picked up the latest Heller refugees. The big fish is Kenneth Chernof, Heller’s managing partner in the D.C. office. Any associates coming along for the ride?
This won’t come as a galloping shock to the pessimists out there, but Heller Ehrman is not going to pay out the accrued vacation time of their associates and staff. The disappointed employees were told today via a firm-wide email:
On behalf of the Dissolution Committee:
To Our Employees:
The Dissolution Committee is sending this message to keep interested employees as informed as possible of relevant developments. A number of people have raised questions about accrued vacation pay payable upon termination. We regret to inform you that the banks’ which now control our ability to write checks — Bank of America and Citibank — have informed us that we may not pay terminating employees for accrued vacation. This decision was made despite our strenuous, repeated efforts to convince the banks otherwise.
We will continue to seek the banks’ permission to pay these amounts as soon as possible. The Dissolution Committee did obtain the banks oral permission to fund the payroll due next Friday in all other respects. We are now awaiting their written confirmation, which we expect to receive later today.
We sincerely regret that the banks are preventing us from paying our terminating employees the full amount to which they are entitled at this time. We wish it were otherwise, and we will continue to press the banks to change their position.
The Dissolution Committee
As we’ve discussed before, the banks really do have the ultimate authority when it comes to these situations. However, Heller made many protestations in the immediate aftermath of the dissolution that associates and staff would be paid all that they were owed.
Is “orderly dissolution” a thing of the past? Hellerites weigh in after the jump.
While law firms try to cherry pick Heller Ehrman’s departing attorneys, some companies are also trying to pick up Heller Ehrman’s business.
But there is a way to be decent about these things. The people at VentureSource might need to brush up on their etiquette. The venture capital resource group sent out the following email to many of their subscribers, including some people who are still affiliated with Heller Ehrman:
Heller Erman[sic] dissolved its practice last week. This week, dozens of venture capital firms and portfolio companies may be in search of new legal representation.
See all the clients–including their financial details and key contacts–available in VentureSource. You can also use the database to spot other potential clients in every industry and region in the U.S., Canada, Europe, Israel and China.
Don’t wait: Call me at [redacted] or send me an e-mail to subscribe to VentureSource or set up a personal demonstration.
Position Your Business to Benefit from the Fall of Heller (& Others)
Verily, the funeral baked meats did coldly furnish forth the marriage table.
Cooley Godward Kronish LLP announced today that 15 partners from Heller Ehrman will join the Firm. Ten partners will join Cooley in Silicon Valley, four in Seattle, where Cooley will open an office, and one in Washington, DC. In addition to comprising the core of Heller’s Venture Law Group (VLG) in these offices, the partners joining Cooley include the heads of Heller’s firm-wide business and intellectual property transactions practices, the co-heads of its energy and clean technology practice, the co-chair of its life sciences practice and two VLG co-founders.
Heller receives an apology from VentureSource after the jump.
It’s been a few days since we checked in on the slow breakup of Heller Ehrman. But today brings news of a coveted partner picking his soft landing. The Daily Journal reports:
Top antitrust litigator Robert G. Badal will be departing Heller Ehrman for Wilmer Cutler Pickering Hale and Dorr’s Los Angeles office, which he plans to join as a partner on Friday.
Badal is Heller’s first Los Angeles partner to publicly confirm that he is leaving the troubled firm since it began its dissolution last week.
Badal, also an intellectual property litigator, was vague about whether he is bringing other Heller attorneys with him. … “There may be a few people from Heller that might join Wilmer over time,” Badal said.
Badal called Heller’s dissolution “regrettable” and said that he chose Wilmer Hale because of its strong Asia practice.
After the jump we see if Heller associates and staff can get some soup.
It’s official: Heller Ehrman is dissolving. We have no desire to pile on, but major firms don’t close their doors everyday.
So, how does the dissolution process work exactly?
The first thing Heller is required to do by law is to give notice to all their employees under the Worker Adjustment and Retraining Notification Act (WARN). Heller complied with this requirement this afternoon:
I regret to inform you that The Firm has adopted a plan of liquidation and will shut down substantially all of its operations on or about November 28, 2008. At the time of the shutdown, the employment of The Firm’s employees will be permanently terminated. Until then, please be aware that The Firm has work for you and expects you to report to work. Employees will be paid full salary and benefits until the shutdown. Where applicable, employees with accrued but unused vacation time may be scheduled for vacation prior to November 28.
You do not have displacement or bumping rights for other positions within The Firm. However, in order to conduct an orderly liquidation, The Firm may continue to employ a very limited number of employees after the date of the shutdown. If you wish to be considered for such work, please notify me by email; The Firm will let you know about past November 28 work within the next few days.
This letter constitutes notice to you pursuant to statute. As a terminated employee, you may be entitled to certain benefits, which will be the subject of a separate communication. The shutdown is being treated as a plant closing under relevant law, and includes the termination of employment of employees employed at 333 Bush Street, San Francisco, California 94104.
In the event you require additional information, please feel free to contact [redacted]
Additional analysis of Heller’s breakup, after the jump.
At a firm-wide meeting held at 1 p.m. Pacific time, Heller associates were informed that there would be an “orderly dissolution” of the firm, starting on Monday.
Associates have been given 60 days’ notice, with pay.
But it’s not a severance payment. Associates are expected to show up and participate in the “orderly dissolution.” As one tipster puts it:
[O]ver the next 60 days the focus will be collections, finding employment for associates and shareholders, ethically transitioning client matters from Heller to other firms when associates and shareholders take their clients with them, and general administrative clean-up. There will be a small core staff that remains after the 60 days in order to deal with finance matters, etc.
Another Heller insider tells us:
Everything is contingent on the vote tomorrow which needs 2/3 of the Shareholders to approve dissolution. And banks control all cash.
Individual meetings are still taking place. We’ll bring you updates as we have them.
We hope that everybody lands on their feet.
Update (7:45 PM): More Heller information appears here. It looks like getting paid for accrued vacation time will be the next battleground.
* I’m still waiting for somebody to give me one good reason for the third year of law school. Anyone? All of my loan repayment checks say, “For 1L year only.” (Yes. The vast majority of them bounce). [The Shark]
* What to watch for during today’s associate video conference at Heller Ehrman. [Heller Highwater]
At yesterday’s shareholder video conference, the leadership of Heller Ehrman assured the partnership that their line of credit was still open. That doesn’t mean that they can survive, just that they still have some time to make their next move.
Meanwhile, after the meeting, Heller Chairman Matthew Larrabee finally communicated with associates and staff:
I am profoundly sorry that I have not been in direct communication with you recently. We realize that there has been a lot of news coverage about our firm, and it is wrong to have that be your source of information. We have been focused on urgent and significant issues that are facing the firm and carefully considering our options. We also have been focused on trying to get answers to the many questions that we know need to be addressed.
While that may explain some of the private meetings and small-group discussions that have been held recently, we know that there has been a lengthy gap in communication that needs to be filled as soon as possible.
To that end, we are planning to hold meetings with everyone before the end of this week via video conference and/or local, in-person discussions. You will receive an invitation to participate as soon as we can finish gathering important information we know you seek.
Again, I apologize for not communicating with you sooner. We realize the anxiety that you are feeling and we are doing everything we can to find answers to your questions.
But what is left to say? As one tipster put it:
[T]he whole place here is nuts. I’m kinda soaking up a salary until a decision gets made, but we’re operating under the assumption that we’re gonna fold.
Pour a shot on the ground for Heller? Probably in a few weeks for sure.
A wise man once said, “The waiting is the hardest part.” Take heart Hellerites, the long dark of dissolution is almost at an end.
The holiday season is upon us, and yet again, you have no idea what to get for the fickle lawyer in your life. We’re here to help. Even if your bonus check hasn’t arrived yet, any one of the gifts we’ve highlighted here could be a worthy substitute until your employer decides to make it rain.
We’ve got an eclectic selection for you to choose from, so settle in by that stack of documents yet to be reviewed and dig in…
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past six years. You can reach them by email: email@example.com.
We currently have a very exciting and rare type of in-house opening in China at one of the world’s leading internet and social media companies. Our client is looking for an IP Transactional / TMT / Licensing attorney with 2 to 6 years experience. The new hire will be based in Shenzhen or Shanghai. Mandarin is not required (deal documentation will be in English) but is preferred. A solid reason to be in China and a commitment to that market is required of course. This new hire will likely be US qualified (but could also be qualified in UK or other jurisdictions) and with experience and training at a top law firm’s IP transactional / TMT practice and could be currently at a law firm or in-house. Qualified candidates currently Asia based, Europe based or US based will be considered. The new hire’s supervisors in this technology transactions in-house team are very well regarded US trained IP transactional lawyers, with substantial experience at Silicon Valley firms. The culture and atmosphere in this in-house group and the company in general is entrepreneurial, team oriented, and the work is cutting edge, even for a cutting edge industry. The upside of being in an important strategic in-house position in this fast growing and world leading internet company is of the “sky is the limit” variety. Its a very exciting place to be in China for a rising IP transactional lawyer in our opinion, for many reasons beyond the basic info we can share here in this ad / post. This is a special A+ opportunity.
If your firm is in ‘go’ mode when it comes to recruiting lateral partners with loyal clients, then take this quiz to see how well you measure up. Keep track of your ‘yes’ and ‘no’ responses.
1. Does your firm have a clearly defined strategy of practice groups that are priorities of growth for your office? Nothing gets done by random chance, but with a clear vision for the future. Identify the top practice areas for which you wish to add lateral partners. Seek input from practice group leaders and get specifics on needs, outcomes, and ideal target profiles.
2. In addition to clarifying your firm’s growth strategy, are you still open to the hire of a partner outside of your plan? I’ve made several placements that fit this category. The partner’s practice was not within the strategic growth plan of my client, but once the two parties started talking with each other, we all saw how it could indeed be a seamless fit. Be open to “Opportunistic Hires.” You never know where your next producing partner might come from, so you have to be open to it. I will be the first to admit that there is a quirky element of randomness in recruiting.
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