Thacher Proffitt Loses Half its Lawyers as 100 Jump to Sonnenschein
Updated: Thacher Proffitt & Wood, rumored to be on the brink of dissolution, has suffered a debilitating blow with the loss of about 100 of its lawyers to Sonnenschein Nath & Rosenthal.
Four practice groups and their chairs, including 40 partners, are making the move, according to a Sonnenschein press release. The groups are structured finance, corporate and financial institutions, real estate, and litigation and dispute resolution.
Among those making the move is Robert McCarthy, the chairman of Thacher’s planning committee, the New York Times reports. “We’re still working on what happens to Thacher,” McCarthy told the Times. “Its viability going forward was not likely.”
Thacher had lost about 100 lawyers during the past year and had offered its offices for lease, fueling speculation the firm was near dissolution, ABAJournal.com reported earlier this month. A story published Dec. 12 in Crain’s New York Business put Thacher’s headcount at 200 lawyers, meaning the law firm has lost half its lawyers with the Sonnenschein move. Thacher Proffitt also recently lost its head of litigation, Richard Hans, to DLA Piper, the American Lawyer reports.
The move follows King & Spalding’s recent decision to withdraw from talks to acquire substantially all of Thacher due to concerns about bank debt and lease exposure, the American Lawyer reports in a separate story. King & Spalding had also considered hiring only Thacher’s structured finance lawyers, the story says, but those talks collapsed as Sonnenschein began negotiations for the group.
The acquisition increases Sonnenschein’s headcount to about 800 lawyers, still short of the 1,000 mark sought by chairman Elliott Portnoy. He told the Kansas City Star in an interview earlier this month that Sonnenschein had added 64 new lawyers this year, after laying off 37 lawyers in May and about 24 more in October.
Portnoy told the Times that Sonnenschein partners took on the structured finance lawyers because they believe financial markets will recover. “This is a group of lawyers who aren’t just structured-finance lawyers, but lawyers who provide a large set of services to the world’s largest financial institutions, banks and investment banks,” he said.
He expects the lawyers will bring with them Thacher’s $500,000 contract to advise the Treasury Department on part of the Wall Street bailout.
Sonnenschein is acquiring the lawyers at a time when structured finance practices are suffering, but Portnoy tells the ABA Journal that the addition will not be a drag on firm revenues. “The lateral additions have been structured in a way that it will be additive to our net income in 2009,” he says.
“We have a very broad practice mix and geographic platform, which helps us in challenging times such as these,” he adds in the ABA Journal interview, covered in a separate ABA Journal post. “We think the upside is substantially greater than any potential downside.”
The group joins Sonnenschein on Jan. 1. Above the Law posted an internal memo announcing the move.
Updated at 9:55 a.m. to include link to an ABA Journal interview with Portnoy.
