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Morgan, Lewis & Bockius may have spurned a merger with Brobeck, Phleger & Harrison, but the Philadelphia-based giant is still interested in hooking up with some of the soon-to-be-defunct firm’s lawyers. Two of the 1,100-lawyer firm’s top litigation partners spent Monday courting Brobeck partners — particularly litigators in the firm’s San Francisco and Los Angeles offices. A Brobeck partner who participated in a meeting — attended by Brobeck partners in person, via videoconference or conference call — said that Jami McKeon, chair of Morgan, Lewis’ business and corporate litigation practice, and James Pagliaro, leader of its global litigation practice, are interested in hiring litigation attorneys, but discussed expanding their offer “to include larger groups of Brobeck attorneys.” “They also said partners in [East] Palo Alto can join them if they are willing to move to San Francisco — or, if there is enough interest, they can open in Palo Alto,” the Brobeck partner said. Morgan, Lewis’ moves came as Brobeck lawyers were besieged by competitors looking to pick the firm’s top stars. A few deals look like they may be about to close: Paul, Hastings, Janofsky & Walker is a leading contender to acquire Brobeck’s San Diego office, which has the bulk of the firm’s intellectual property litigators, said a source close to the deal. And East Palo Alto corporate honcho Warren Lazarow seems headed for O’Melveny & Myers with several other partners. “Law firms are assembling intake teams to process the Brobeck people,” said law firm recruiter Lawrence Watanabe, who is representing Brobeck’s San Diego office. “I was on the phone until midnight on Friday and Saturday night and at 6 a.m. Sunday morning.” But Morgan, Lewis looks like the firm most interested in picking up a large number of Brobeck lawyers. However, it’s not clear if the attraction is mutual. Some Brobeck lawyers expressed lingering resentment about Morgan, Lewis’ decision to pull out of merger talks — a move that helped speed the firm’s demise. And at least a few Brobeck partners are considering reconstituting the firm, possibly under the Brobeck name. “The situation is so new and so unsettled that different people are thinking of and exploring just about every option you can mention,” a Brobeck partner said. “A lot of people would like to stay together.” Officially, management at both firms remained mum about a possible offer to the remaining lawyers. “I can’t comment on that,” said Morgan, Lewis Chairman Francis Milone. “This is an unusually difficult position that all of us are in right now.” Several Brobeck partners have already landed at other firms. Austin partners Edward Fernandes, Paul Bessette and David Whittlesey joined ex-litigation chief Steven Zager at Akin, Gump, Strauss, Hauer & Feld, along with a senior counsel, counsel and 11 associates. And Silicon Valley corporate partner Benjamin Quinones joined Pillsbury Winthrop on Monday. For the partners and others who remain, much of Monday was spent grappling with Brobeck management’s decision last week to pull the plug on the firm. Brobeck — which spent the weekend in discussions with its bankers — said it was considering laying off some of its 600 staff members prior to the firm’s official dissolution. “We will begin looking at which staff members can go more quickly, and which can remain to satisfy needs of clients,” said John Pachtner, the firm’s director of communications. Several partners continued to express surprise at the speed of Brobeck’s collapse and wondered if the firm’s top managers had abided by the terms of the partnership agreement when they acted Thursday to disband the firm. “I don’t think I’ve ever once seen a dissolution vote allowed by an executive committee,” said Blane Prescott, a law firm consultant with Hildebrandt International. “It’s always required [to be done] by a partnership vote.” Morgan, Lewis and Brobeck had been in merger discussions since October, and many partners assumed the deal was about to be finalized. “There was a lot of surprise,” one Brobeck partner said when the top partners announced the firm would disband. Partners are still trying to piece together the chain of events that led the firm’s top brass to a decision to disband. But they believe the decision unfolded like this: Morgan, Lewis was spooked by the departure of top rainmakers — and by extension, top clients — and ended merger talks. That, in turn, frightened Citibank, which had loaned the firm as much $90 million. The bank, partners said, may have told the firm to pay up immediately. In response, the firm’s policy committee — which includes most of the firm’s top managers — decided they had no recourse but to disband the firm. Loans to firms generally specify the conditions under which the loan would be immediately due. Those might include if a firm lost more than 5 percent of its partners or if accounts receivable dipped below a set amount. “If you violate your covenants, the bank may have the right to take possession of all your accounts, freeze your cash,” Prescott said. While Brobeck would not say who made the final decision, the firm’s policy committee is the most likely candidate because of its role as the leading body overseeing firm decision-making. The committee includes Chairman Richard Odom; Richard Parker, the firmwide managing partner; Lazarow, the head of the firm’s corporate group; and Debra Pole, a top mass torts litigator. Some partners said Monday they think the committee acted too swiftly. Or as one partner put it: “It seemed like an uncontrolled event. Even if the bank is saying you’re in default, that does not mean you have to rush out to commit suicide. You can have a meeting with the banks and see where to go.” The partner is critical of the way the merger negotiations were conducted and said he was surprised Brobeck put all of its eggs in the Morgan, Lewis basket. “If we had been able to talk to more firms simultaneously, that might have given us more options,” he said. “When the music stops you don’t have a dance partner.” But Prescott, who has handled several mergers, said that idea probably doesn’t hold water. “That’s a nice theory, but it’s hard to deal with more than one firm in depth at any one time,” Prescott said. “If I’m dating you, and I find out you’re dating three other people, how serious can you be?”

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