Brobeck seeks loyalty oath from partnership

The management of ailing California giant Brobeck Phleger & Harrison has sought an oath of loyalty from its partners to arrest its staff haemorrhage, as it nears decision time in merger talks with potential white knight Morgan Lewis & Bockius.
The Lawyer can reveal that at the Brobeck partner retreat earlier this month, the firm discussed partner defections and merger prospects.
Sources close to the meeting said the firm asked partners to swear an oath of loyalty, and management also asked that all partners forgo large year-end distributions to help the firm.
One source also claimed that the firm's management attempted to introduce an amendment to the partnership constitution that would prevent defecting partners from recovering partnership capital. Under the current constitution, it must be paid back on a monthly basis to departing partners.
Brobeck has been losing partners for months and it is understood that other West Coast, national and New York firms are currently holding intensive discussions with individuals and groups that they want to poach.
Some such firms have said that, as a result of the meeting, partners have decided to stay at Brobeck. However, others have indicated that their lateral hires are still on track.
Brobeck's management did offer some good news: that the firm would recover the final tranche of a conditional fee award for the Western MacArthur case in February, alleviating some financial woes.
Sources close to Morgan Lewis say that the management of both Morgan Lewis and Brobeck want a merger as soon as possible. A major stumbling block is whether Morgan Lewis can reasonably accommodate Brobeck's top-billing partners, who it is understood are not happy with the remuneration offer on the table. According to some sources, the rated intellectual property group has argued strongly against the current offer.
Brobeck's heavy commercial property burden is the other potential deal-breaker. A Morgan Lewis source said: "The issue is how much of the lease and other credit obligations the Brobeck partners will eat." The firm wants Brobeck to ringfence its financial obligations before any merger.
Brobeck securities partner Bill Sullivan said: "We did not discuss partner defections at the retreat."