Heller Rewards Rainmakers, But Some Storm Away
Changes at Heller Ehrman that were designed to improve profitability have upset some longtime partners, spurring some of them to leave.
Twenty-five partners left the firm last year, and so far this year, 16 have departed, the American Lawyer reports.
Some of the recent lawyer departures may have been because of the firm’s efforts to boost profits, but others who left were valued big business generators and practice group leaders, the article says. They included Patricia Gillette, co-head of the firm’s employment group, and Jerry Marks, managing partner of the Los Angeles office.
The changes began in 2003 when the law firm acquired the 60-lawyer Venture Law Group, which represents emerging growth companies, in an effort to beef up its corporate practice, the American Lawyer reports. Heller also hired 14 corporate lawyers from the San Diego office of Brobeck, Phleger & Harrison. Critics said the acquisitions didn’t live up to expectations. Rather than pursuing mainstream corporate work, some of the new lawyers instead focused on private company and venture capital work that didn’t produce a lot of fees, critics told the magazine.
More recently, the firm “began paring down the partnership, focusing on core practices and rejiggering the compensation structure to reward business generators,” the story says. Big producers are getting more money; one former partner said 80 percent of the compensation analysis is now based on rainmaking, compared to 50 percent in the past.
Some lawyers told American Lawyer that the new focus on business generation has destroyed the firm culture. Others said they weren’t making enough money, even under the new compensation structure. Most said the law firm doesn’t have a strong sense of direction.
“The question isn’t so much whether Heller can do better,” the article says, “it’s how long shareholders are willing to wait for it to happen.”
Heller chairman Matthew Larrabee points out that the firm’s corporate income increased by 5 percent last year, generating $210 million. He says a decline in overall gross revenue last year was an aberration. “Being competitive economically concerns us, and I think for that very reason we have changed over the past few years,” he told the magazine.
