Biglaw

Biglaw Firm Finally Admits It's Closing

Associates have been informed their last day at the firm will be August 30th.

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The dream that was LeClairRyan is over. Of course, for those of us following along with the once Biglaw firm, this was expected; after all, last week we reported LeClairRyan had begun the process of dissolution of the firm. Which was after a 2+-year-long span of trouble, including partners deserting the firm en masse (notably including name partner Gary LeClair); being prevented by their lender from returning departing partners’ capital contributions; giving staff WARN Act notices of mass layoffs; and being sued for back rent and for gender discrimination. But through it all, the firm, somewhat stubbornly, has refused to comment — until now.

Yesterday, the firm released a statement saying its members have “voted to commence an orderly wind-down of the firm’s business.” And going on to note:

“The firm, through its dissolution committee, is working in cooperation with its lender to ensure the continuity of client service until such time as the firm ceases to actively practice law and turns its attention to post-practice activities.”

As reported by Law.com, in a statement on the closing of the firm, CEO Erik Gustafson focused on a smooth transition for the firm’s clients:

“On behalf of my colleagues, we are deeply saddened to make this announcement today,” now-former CEO C. Erik Gustafson said in a statement. “Through our transition, we will continue to focus first and foremost on the success of our clients, as we have always done. I am thankful to all of the clients who have chosen to work with our team over the last 30 years, and I am grateful for the exceptional lawyers and professionals who continue to work with dedication and determination towards winding down the firm in an orderly fashion.”

So, what happens now? Well, associates have reportedly been told their last day at the firm will be August 30th. Headhunters have been contacted to assist with finding new firms for any groups of attorneys that somehow missed the writing on the wall and are still at the firm. It is currently unclear whether the firm will wind up in bankruptcy court, or if they’ll manage to navigate the dissolution of the firm without that process.

What’s happening at LeClairRyan may, in fact, be a harbinger for other Am Law 200 firms. At least according to Bill Brandt, chairman of Development Specialists and a law firm restructuring expert:

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However it proceeds, LeClairRyan’s situation highlights the perilous positions of some firms in the Am Law 200, especially in the Second Hundred.

Brandt said firms in LeClairRyan’s size bracket—in roughly the 200-partner range—are in a tough position. “Those midrange Am Law firms” don’t have the geographic and practice base to pull in lot of clients, but they can’t manage themselves like a boutique, he said. “They are very vulnerable right now.”

We’ll definitely keep our eyes and ears open to see what ripple effect LeClairRyan closing may have on the larger legal industry.

headshotKathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

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