* A dramatic closer look at Wolf Block’s collapse. [Philadelphia Magazine]
* The media buzz this week on Sotomayor: Her decision in the New Haven firefighters case could be a key issue during her confirmation hearings. [USA Today]
* Minnesota’s Supreme Court will hear arguments today in the Coleman–Franken election race. Yes, it is still going on. [Wall Street Journal]
* GM files for bankruptcy today. Wasn’t it always just a matter of time? [Associated Press]
* U.S. Bankruptcy Judge Arthur Gonzalez has approved Chrysler’s sale of most of its business to Fiat. [Bloomberg]
* A Georgia man is facing execution for murdering an off-duty cop in 1989, even though seven out of the nine witnesses have recanted their testimony. Should SCOTUS intervene? [New York Times]
* A dramatic closer look at Wolf Block’s collapse. [Philadelphia Magazine]
There doesn’t appear to be a Wolf Block miracle in Philly today. The firm is dissolving. A press release was just issued by Bradford Hildebrandt, whom the ABA Journal reported this morning had been brought in by the firm to oversee a possible wind-down.
The partners of WolfBlock LLP have voted to commence an orderly unwinding of the firm’s business.
WolfBlock will remain in the practice of law for several months to protect the interests of its clients, employees and creditors. The decision to unwind was reached in view of a confluence of unfavorable factors: the economic recession, especially in the firm’s core real estate practice; the constriction of credit occasioned by the ongoing banking crisis; and the intended and anticipated departure of significant partners and practices.
We’re not sure which practice groups in particular felt they’d be better off on their own.
Time to brush up on your WARN law, again. The Intelligencer reported that the overall headcount at Wolf Block is 290. There’s a lot of sadness in Philly today.
Read the full release after the jump.
We hope you enjoyed last week, a “relatively quiet week” in layoffs. We’ll see if the relative calm holds as we get closer to the time for firms to make another payroll.
Several sources have said members of the executive committee met Saturday to discuss a possible dissolution of the firm. The matter is said to be set for a full partnership vote as early as Monday. A decision to dissolve the firm would need to be approved by at least 75 percent of the partnership, one source said.
After the jump, the now familiar story of failed mergers as precursors to dissolution.
Here’s a little something to break up the layoff news.
On Tuesday, we reported that U.K. firms might look to cut associate salaries (instead of just freezing them) in order to avoid layoffs. In response to our reader poll, 65% of you said that you preferred a salary cut to firm layoffs.
We hope that Wolf Block associates favor cutting salaries more strongly than the ATL readership at large. Because they are all about to take a pay cut.
Multiple tipsters report that Wolf Block chairman Mark L. Alderman informed associates this morning that all associates would be taking a 10% pay cut, effective with the next pay check.
A firm spokesperson confirmed the news a short while ago:
We can confirm that associates will have a 10% reduction in base compensation prospectively. However, we have significantly increased the bonus pool for associates to make their overall compensation more performance-based.
Wolf Block people that we spoke with emphasize that there has been a “significant increase” in the bonus pool. We don’t have those numbers yet..
Of course, unlike our poll, Wolf Block is doing this in addition to firing employees. The firm already laid off 15 associates and staff back in December.
Still, one at least hopes the move helps the firm avoid further layoffs.
Will other firms follow Wolf Block’s lead? Or will Wolf stand alone?
Update (1:42): We can now also report layoffs at Wolf Block that happened earlier this week. Our sources report that 15 staffers and 6 associates were let go on Tuesday.
Another tipster is reporting extra details from the pay cut meeting this morning.
The chairman said that the firm is monitoring status of revenues on a monthly basis.
The implication this tipster got was that more cuts could be coming if things do not improve.
If you watched any ESPN this weekend, you might have caught SportsCenter’s ridiculous coverage of Philadelphia 76ers coach Maurice Cheeks getting fired. Cheeks is the fifth NBA coach to get fired before Christmas (which is a record, apparently) and somebody at ESPN decided that it was appropriate to merge the “bloodbath” of NBA coaches into the larger story about nationwide unemployment numbers.
Therefore, I’ve decided to hand over the rest of this post to Stephen A. Smith so everybody can learn the latest about another Philly institution (Wolf Block) with the appropriate level of histrionics.
Holla! I got this from a SOURCE last week that Wolf Block was layin’ down the smack on 15 cats right before your Christmas or your holidays or WHATEVER YOU WANT TO CALL IT. They got the straight heave-ho yo!
My source tells me that the REDUCTIONS were based on the economics of America, not the performance of their ballers.
After the break, management talks straight.
In response to the economic slowdown, Wolf Block has delayed the start date of its entry-level lawyers for two months. The firm said all but one of eight recent law school graduates were told not to report for work until November 10 rather than the normal start date shortly after Labor Day.
Hiring partner Andrew Chirls said the first-year associates, who get paid $135,000 a year, will receive a $5,000 stipend to tide them over.
That works out to $2,500 a month, or $30,000 on an annual basis. But hey, at least they don’t have to work for it.
If you’re interested, there’s more — including info about summer-associate offer rates — after the jump.
In the immortal words of Roxette, “It must have been love; but it’s over now.” Last month, we marveled at all the law firm merger rumors making the rounds. These days, however, merger talks are falling apart, left and right.
As we first reported, the contemplated merger between Heller Ehrman and Baker & McKenzie is officially dead. For the skinny on their breakup, see Legal Pad. Apparently client conflicts were the deal breaker (as they so often are; they’re the law-firm equivalent of serious religious differences, or really bad STDs). Baker & McKenzie will have to settle for being a firm with a measly $2.2 billion in annual global revenue.
And now this, from the National Law Journal:
In the days that followed the joint announcement by Wolf Block and Akerman Senterfitt that their merger talks hit a snag over a conflict, sources have pointed to deeper issues affecting the drawn-out discussions…
One source aware of the merger discussions said the combination would be a good thing for both firms but said Wolf Block leadership is unwilling to work out certain tax and pension concerns.
There is concern among some of Wolf Block’s partnership over having to pay a significant amount in taxes upon merging with a corporation, the source said. There is also concern over having to make up for Wolf Block’s unfunded pension liabilities. Both of the issues could cause partners to “take a real financial hit,” the source said, adding that a loan could solve those problems, but firm leadership seems unwilling to go that route.
We’d end with the requisite punchy quip, but unfunded pension liabilities leave us uninspired.
(It’s a Friday, in August, after 3 PM. Why are you still here?)
Trouble with WolfBlock-Akerman merger talks over more than conflicts [National Law Journal]
Conflicts Blamed for Failed Heller Merger Talks [Legal Pad]
Bakers breaks £1bn mark with 20% revenue boost [Legal Week via ABA Journal]
Earlier: Heller Ehrman Is NOT Merging With Baker & McKenzie
Law Firm Merger Mania: Collected Rumors and News
We’ve previously covered Denver and Hartford. Today our series of posts profiling associate compensation in various smaller legal markets — smaller than New York or Washington or Los Angeles, at least — turns to Philadelphia.
What’s going on in the City of Brotherly Love? Based on some recent articles we’ve read, it seems that the standard starting salary in Philly hovers between $135,000 and $145,000.
At $135K: Schnader Harrison Segal & Lewis; Ballard Spahr Andrews & Ingersoll; Duane Morris; Blank Rome; Wolf, Block, Schorr & Solis-Cohen; and DLA Piper.
At $145K: Morgan, Lewis & Bockius; Dechert; Drinker Biddle & Reath; and Pepper Hamilton.
Will Philly move to the $160K scale anytime soon? If so, when? And who will lead the charge?
In the cheesesteak metropolis, starting salaries aren’t the only issue. Per a commenter:
[W]hen you do [Philadelphia], please make sure to point out our mid-level comp which sucks. We get about a 5k raise per year (though [in] some years we do get 10k but not most). After 7 years we’re just clearing 200k.
Interesting — and depressing. Is so-called “compression” higher up the seniority ladder a more pressing salary issue in Philly right now than the state of starting salaries?
Please discuss, in the comments. Thanks.
Hangley Aronchick Raises Associate Salaries to $135,000 [Legal Intelligencer (subscription)]
Pepper Hamilton Raising First-Year Associates’ Salaries by $20,000 [Legal Intelligencer (subscription)]