US firm’s partnership votes for orderly dissolution after Baker & McKenzie talks collapse; 90-day deadline to sell assets
Coudert Brothers, the world’s first truly international law firm, has hit the self-destruct button to bring an end to its 152-year history.
As first revealed on www. thelawyer.com (18 August), Coudert finally threw in the towel last Tuesday when the firm held a conference call for all of its partners, who agreed that they could all seek alternative employment.
Coudert is now set to become the fourth high-profile US firm to collapse in the last two years, following in the footsteps of Altheimer & Gray, Brobeck Phleger & Harrison and Testa Hurwitz & Thibeault.
The conference call lasted three and a half hours. During what one Coudert partner described as a “sad and gloomy discussion”, the partnership formed what it called the ‘Special Situations Committee’ to arrange for the orderly disposal of the various offices in an attempt to gain some money to pay off the firm’s debts.
The collapse of Baker & McKenzie’s merger talks with Coudert sparked the vote that released partners from their fiduciary duties to the firm. They will try to carry out business as usual during the next 90 days, as the committee attempts to sell its assets, the most valuable of which is understood to be the lease of the New York office, with an estimated value of more than $20m (£11.1m).
“After exploring various options, the partners of Coudert have authorised the firm to enter into combinations of offices and practice groups with other firms to reflect the strengths of the firm. Such combinations will be done in an orderly process and announced over the next several weeks,” said a Coudert spokesperson.
The announcement brings to a close two years of misery, during which time the firm has had three chairmen and plummeting profit and has endured a steady stream of departing partners, culminating in Orrick Herrington & Sutcliffe’s May 2005 raid on Coudert’s London, Moscow and Paris offices.
It was at this point that chairman Clyde ‘Skip’ Rankin told the departing partners: “You’re going to kill this firm.”
The departures of the teams to Orrick sparked a last ditch attempt at Coudert to boost its attractiveness to potential merger partner Bakers. The firm dumped its San Francisco and Germany off-ices. Bakers was attracted mainly by Coudert’s 100-lawyer New York office, although many former partners cited New York’s allegedly poor financial performance as one of the key factors in the firm’s demise.
The problems go back even further. In the 1990s, chairman Tony Williams set out to make Coudert the truly global firm that it had threatened to be after it became the first US firm in Paris in 1879, China in 1979 and London in 1960.
It was Williams who secured mergers in Australia, Belgium and Germany. Germany in particular was perceived as a failure internally. The partners originally voted down the German combination after a report had advised against it. The firm’s management, though, forced it through. Ultimately, this overexpansion cost it dear.
Coudert chairman Tony Williams, who oversaw massive international expansion, resigns. Steven Beharrell takes over.
David Huebner becomes chairman.
Beijing team of two lawyers and three associates defects to Squire Sanders & Dempsey.
DLA Piper acquires Milan office of four partners and 25 assistants.
Plug pulled on merger talks with Squire Sanders.
Huebner resigns; Clyde ‘Skip’ Rankin becomes chairman.
DLA Piper takes two partners and four associates from Coudert Bangkok.
Orrick Herrington & Sutcliffe takes all eight London-based partners and three Moscow-based partners.
Coudert closes Berlin, Frankfurt and San Francisco offices.
Management embarks on a series of crisis meetings as exiting partners demand dissolution.
Baker & McKenzie calls off merger talks. Coudert confirms break-up of firm.