Thelen Reid Brown Raysman & Steiner is set to dissolve, becoming the second US firm to do so in the last month.
As TheLawyer.com reported last week (28 October), Thelen’s partnership counsel voted in favour of dissolution less than a month after West Coast firm Heller Ehrman took the same action. It is anticipated that Thelen will close its doors on 1 December.
Thelen, which has 400 lawyers in its ranks and was formerly a Pinsent Masons alliance partner, attributed its demise to poor economic conditions and mass defections totalling more than 100 lawyers during 2008.
A source close to the firm said: “Thelen couldn’t survive the credit crunch. I imagine a number of other firms will be facing the same problem.”
A statement released by the firm said: “For the past several months, Thelen management has aggressively sought a full-firm merger. Unfortunately, the most promising merger opportunity was derailed by conflicts, and all other full-firm merger discussions terminated last week.”
The firm is in default of its primary credit agreement, having breached a partner departure covenant that restricts the number of partners who may depart within any 12-month period.
As a result, Thelen’s bank now has control over expenditure. The firm’s management is in discussions with the bank regarding its wind-down budget, which will allow the firm to continue paying certain expenses.
The management has appointed a three-partner administrative committee to work with the bank and conduct the winding-down process. Partners will not receive profits, but will receive minimum draws until 15 November.
Thelen said it would pay its employees 60 days’ salary, as well as all accrued vacation pay.