The halls are almost ghostly and tears are still being shed by those who remain, but the humor of the staff members still scattered throughout the floors of Wolf Block's Philadelphia office is evident -- as is the frustration.
The artwork taken down at Wolf Block's Philadelphia office the day the firm voted to dissolve was replaced with tiny, paper cutouts of scenic pictures stuck to the remaining hooks on the wall. In place of floral arrangements typically found at the entrance to each floor, staff members compiled their own decorations -- including Wolf Block mugs and a copy of "Dogbert's Top Secret Management Handbook."
The gravity of the situation can be seen when looking at empty offices that contain just a discarded plant or the marks in the carpet where furniture used to be. And in the mailroom, where the once hectic center now has few people but many mail crates with names of firms like Blank Rome, Ballard Spahr, Cozen O'Connor and Stradley Ronon -- the firms where Wolf Block attorneys have since found new homes.
With Wolf Block less than two weeks away from ceasing to exist, the reality of its dissolution has exposed the raw nerves of both partners and staff. While everyone wants the "why" answered, partners seem to be looking back and pointing fingers while staff are left to wonder what the future has in store. A string of e-mails from longtime Wolf Block partners sent firmwide in early May expressed both sadness about the firm's failure and anger toward what they saw as failed leadership.
The remaining staff -- there are only a few spread out down each of the hallowed halls at 1650 Arch St. -- said they don't know when their last day is or who will be picked to stay longer and help close down operations of the firm. Letters sent by the firm in compliance with federal WARN Act requirements said employment would end within a 14-day period beginning May 23.
In response to a slew of e-mails from staff members complaining about the three-person wind-down committee's perceived lack of responsiveness, committee member Brian Flaherty set a question-and-answer meeting for Wednesday afternoon to answer any questions about employment, WARN notices, insurance and other topics. He said they would answer questions to the best of their ability and would have someone get back to the staff if they didn't have the answer. Kathleen Sonntag, a secretary with Wolf Block for 37 years, and Loretta DeMay, a 10-year veteran of the firm who has served as former chairman Robert Segal's secretary since joining, couldn't say enough about how wonderful a place Wolf Block had been to work. But that makes their current situation all the more heartbreaking, they said.
Neither saw the dissolution as something that had to happen. Sonntag said the captain -- referring to former Chairman Mark Alderman -- left the sinking ship and they haven't heard from him since. DeMay said the firm should have replaced the leadership years ago when it was clear attempts to improve the firm weren't working.
Sonntag could only describe the dissolution as "greed and mismanagement." "No matter how much they made this year, they needed more next year," she said.
FORMER PARTNERS HAD ENOUGH
And that was just the sentiment of a string of e-mails sent to the entire firm from of counsel Donald Joseph, retired partner Jerome Shestack and Segal himself. In an e-mail sent May 1, Joseph apologized to the staff but also said that many of the partners and senior attorneys were victims as well. He said, however, that even the partners who were victims bore some blame for not fighting harder to change a culture he said for many lawyers was "difficult." He questioned why Wolf Block never took the route Schnader Harrison Segal & Lewis did after some failed mergers in 2001 when the firm cut partner compensation to help ensure its survival.
"I cannot prove it, but knowing the culture [of Wolf Block], if [Schnader's approach] was mentioned I would be quite surprised if it was allowed to be seriously considered," Joseph said in the e-mail.
In an interview, Joseph said he regretted a few of his statements in the e-mail in that he thought it unfairly placed blame on firm leadership's inability to say "no." He said the firm had really been declining for years and the blame could be placed on the "eat-what-you-kill" culture of many large law firms, including Wolf Block. He also said the decision to sometimes borrow money to pay out bonuses showed bad judgment and poor business sense. Joseph concluded his e-mail on a happier note, saying the "gallows humor of it all" still permeates throughout the office and that strong spirit will carry them through to better times.
In response to Joseph's e-mail, Shestack said it had been a pleasure to practice law at Wolf Block, but there were some in the firm who figured in its demise. "Your optimistic note is appreciated," Shestack said. "But it's hard to bypass the fact that the dissolution happened because of the abysmal failure of leadership and a few greedy lawyers unwilling to cut back on high compensation."
Shestack confirmed to The Legal Intelligencer that he sent that e-mail.
Segal, whose own leadership tenure along with a few others had been questioned by many who have conjectured about the demise of Wolf Block, laid out the specific problems he saw that led to the firm's collapse.
"It certainly is refreshing to read the truth after reading the media spin full of illegitimate excuses and self-serving reasons put forth by those responsible for the dissolution," he wrote in response to Shestack's e-mail.
He pointed to the use of a line of credit at the beginning of a fiscal year to pay out bonuses for the prior year's performance.
"When they felt the real earnings were inadequate they just borrowed to pay themselves what they thought they were worth," he said. The firm was unable to borrow that money at the end of their 2008 fiscal year, which ended Jan. 31, 2009.
Segal also pointed to what he said was poor fiscal management and spending "ridiculous sums" on business development and marketing to the tune of millions a year. "[S]enior leadership, who practiced financial insanity and, together with outsiders who stood to benefit from large fees, led their partners like lemmings to dissolution," Segal wrote. "The leadership took care of itself (having had talks, if not firm deals, with other firms prior to the dissolution) and left those who were not their favorites ... to fend for themselves."]
Segal said in the e-mail that after nearly 49 years with Wolf Block, he doesn't have the desire to join another firm and will be splitting his time between Orleans Homebuilders, The Goodman Co. in West Palm Beach, Fla., and his home offices. Shestack has joined Schnader Harrison as a retired partner, and Joseph will continue teaching at Rutgers School of Law-Camden.
Requests for comment from Segal were not returned, though several other sources confirmed he wrote the e-mail. Alderman said that while he had heard about the e-mails, he would rather not comment because he hadn't personally seen them.
When asked about his firm's decision to cut partner compensation, Schnader Harrison Chairman Ralph Wellington said that after two tough mergers and a recession, firm leadership and the highest compensated partners "took for one year a very significant reduction in compensation to show confidence in the long-term prospects of the firm."
When asked whether that would be something feasible in the current market given large firm models, Wellington said it becomes more difficult to get partner buy-in as firms grow. For a firm with 50 or 100 partners, it might be doable, but the larger the partnership, the more difficult to build consensus for such a step, he said.
According to the latest Am Law 200 survey, Wolf Block finished out 2008 with 153 partners, including 56 equity partners.
For DeMay, a widow, and Sonntag, two years away from retirement, the future is unknown. Neither has found a new job, and they don't have high hopes given the current market and all of the staff layoffs at other firms.
"The law can say what it wants, but if you're 62, no one will hire you," Sonntag said of her job prospects.
The firm has had recruiters come in for the last two weeks to go over resumes, and they have been good about letting people take time off to go to job interviews, DeMay said.
The remaining staff have been in there every day, working harder than ever to clear out files, the records room and years of memories accumulated on their desks. "You have no idea how sad it is here," Sonntag said. "I expect some day to come and my key for the building won't work in the concourse and that's how I'll know" my job is officially done.
While she said she still doesn't know if this has really sunk in yet, things are easier to bear now than they were in the first few weeks after the dissolution when there would be constant "goodbye" e-mails from departing partners who were reminiscing.
DeMay came in early one morning because she had to leave early for one of the many doctor's appointments she has set up before her insurance runs out. She said she was a little bit scared because the office that is usually teeming with attorneys and staff was silent. Sonntag said she was playing Elton John on her computer Wednesday morning.
Who would say anything about it, she asked?
