Stephen O'Neal, Thelen chairman
Image: Maya Alleruzzo
O'Neal and 30 or so lawyers from Thelen's signature construction and mass torts practice are currently in talks with Washington, D.C.'s Howrey, with hopes of closing a deal within the next 10 days, a person familiar with the situation said.
The beleaguered San Francisco firm has lost more than 100 attorneys this year, and an internal memo in July assured staff that the firm was actively pursuing merger partners. Since merger discussions with Nixon Peabody died several weeks ago, Thelen has been looking to other firms to pick up practices or offices, according to a Thelen partner. There has been frequent speculation and rumor that the firm is on the edge of dissolution.
A much anticipated all-partner meeting is being held Tuesday, according to a Thelen partner, although the agenda hasn't been made available to rank-and-file partners. The meeting had been set for last Thursday, but was rescheduled at the last minute.
"It's certainly clear to us as industry observers that Thelen has reached a tipping point," said William Nason, a recruiter with San Diego-based Watanabe Nason Schwartz & Lippman. "It's amazing to us how quickly firms dissolve when they get to that point."
O'Neal referred questions to a Thelen spokesman, who declined to comment. Howrey Northern California Managing Partner Henry Bunsow said, "Howrey has been in talks with attorneys from Thelen, and is open to such talks, but nothing has been finalized yet."
O'Neal, a construction litigator by trade, has led the firm since 2005. He oversaw the 2006 merger with New York's Brown Raysman Millstein Felder & Steiner, which has not been widely viewed as a success. Three name partners -- Peter Brown, Richard Raysman and Jeffrey Steiner -- have left the firm since the merger.
Thelen's construction practice is one of the firm's best-known.
It was not clear Friday which other lawyers are in talks aside from O'Neal. But in the San Francisco office, construction law partners David Buoncristiani and John Heisse are headliners. Buoncristiani is known for representing Bechtel Corp., one of Thelen's biggest clients.
Rumors of O'Neal's talks had been spreading around Thelen Friday, and at least one partner said lawyers were not pleased.
"Most people are kinda pissed off that he's spending more time on his own situation than the firm's situation," said the Thelen partner, who did not want to be named.
Litigation-only firm Howrey has been in expansion mode in Northern California, and new construction and mass tort litigators would only add to that.
Separately, Thelen energy partner Ellen Bastier and some of her colleagues are expected to join Reed Smith. Bastier, one of Thelen's rainmakers, is known for clients such as Vestas Wind Systems. Recruiters and people formerly with Thelen recently estimated her book at various levels above $5 million.
Other suitors for pieces of Thelen include Nixon Peabody and Alston & Bird, several sources have said.
