Matthew Larrabee walked into his office at Dechert in October and pulled up a chair to a new desk and a fresh start.
The 54-year-old former leader of Heller Ehrman was building from the ground up at Dechert, this time with a track record that included the dissolution of his previous firm during his tenure as its chairman. "I'm trying to communicate to the world that I'm back in practice and that this is what I'm good at," Larrabee said. "It's still a work in progress."
A litigator by trade, Larrabee served as chairman of San Francisco's Heller Ehrman from 2005 until September 2008, when its partners voted to shut down the 118-year-old firm.
He now is working on antitrust and securities matters with clients such as
Oppenheimer Funds Inc., Whole Foods Market Inc. and U.S. Securities Corp. Starting over, as opposed to winding down, which was the focus of his final weeks at Heller, is a relief, he said. "I love practicing law. I had fun for 25 years before I went into management."
The recent collapse of Heller Ehrman, Thacher Proffitt & Wood, Thelen and WolfBlock sent about 1,800 attorneys into a dreadful job market, among them firm chairmen and dozens of practice leaders who once served as foundations of their former law firms.
In many ways, these former leaders have a harder sell in landing a new job than the attorneys they once led. They must prove that the talents that took them to the top are transferable. Recovering from the black eye of their firms' downfall, they also have to show that they're willing to take direction and be cooperative players on a new team.
At the same time, they must work under a new compensation arrangement that may pay them far less than what they earned before their former firms began to crumble and may be more contingent on their own performance as a practitioner.
Leading Heller Ehrman, which had about 700 attorneys when Larrabee became chairman in 2005, meant that he had to focus full time on management duties. When he made the move to Dechert, he didn't have the traditional hefty book of business that makes laterals attractive to other firms.
But it was his experience in leading an expansion initiative at Heller that Dechert liked. Part of his job at Dechert is to build the firm's business on the West Coast, Larrabee said.
Larrabee declined to compare his current compensation to the amount he made at Heller Ehrman.
TOUGH SPOT FOR FORMER MANAGERS
Lateral movement among attorneys in general has become increasingly common. During the past five years, the number of partners moving from one top firm to another has increased by 14 percent. In 2008, attorneys at Am Law 200 firms made 2,509 moves, according to The American Lawyer, an affiliate of The National Law Journal that tracks partner moves at the nation's most profitable firms. In 2003, lateral moves totaled 2,199.
Despite more firm-to-firm movement overall, lateral shifts among managing attorneys have not kept pace, practitioners and consultants report. Leaders who've relinquished their practices to assume management responsibilities -- an increasingly common situation as firms have grown -- are in a tough spot if they want to go elsewhere when their leadership role comes to an end. Having passed along former clients to other partners in their old firms, they may lack credibility with partners in the new firm who haven't had the chance to observe them as practitioners before they became leaders.
Law firms generally are more likely to hire those who have maintained their own practices rather than manage full time, said Richard Gary, a law firm consultant who was chairman of Thelen from 1992 to 2003. Gary had orchestrated the merger between Thelen, Marrin, Johnson & Bridges and Reid & Priest in 1998, the largest bicoastal law firm merger at the time. When Gary stepped down as Thelen's chairman, he had to decide whether to rebuild a practice or use his leadership skills in another way, he said. He chose consulting.
"At that stage, I was more interested in the strategic issues that law firms face," Gary said. "It is not an easy thing to do, to rebuild a practice." He noted that many law firms have parachute provisions or other compensation formulas to help attorneys ease out of management roles.
Leaders planning lateral moves each face unique challenges, but former leaders at closed firms have an even trickier transition, Gary said. "They have a cloud on their resume that they need to overcome," he said. "Firms may not be looking to hire them as potential leaders given that they led their former firms into dissolution."
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