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As if taking on a dying firm’s millions of dollars in debt, poor morale and plummeting practices wasn’t bad enough. Two years after Akin Gump Strauss Hauer & Feld’s tumultuous merger with the defunct Los Angeles-based Troop Steuber Pasich Reddick & Tobey, the firm has been dragged into an arbitration battle over the alleged misdeeds of Troop’s former management. It must be hard for Akin Gump to put its heart into the arbitration, since only a handful of the 54 Troop lawyers who joined Akin Gump’s L.A. office in 2001 remain at the firm. The arbitration was brought by nine former Troop partners who say that the former executive committee misled them into staying at Troop, even as its profitability was plunging, just to dissuade partners from jumping ship and sabotaging a potential merger. The executive committee, say the former Troop partners in an August arbitration filing, “manipulated the financial statements in such gross and unimaginable ways as to render them completely phony … to mask the already abysmal profitability of the firm.” The claimants, who make a number of other allegations of wrongdoing, name Akin Gump, the sole defendant, as the “successor-in-interest” to Troop. The firm has retained Proskauer Rose’s Lois Thompson in the arbitration. Thompson did not return phone calls. But Akin Gump management doesn’t think the former Troop partners — mostly litigators who resigned from Troop prior to its merger with Akin Gump — have much of a case. “You’re a partner at a law firm, and you don’t know what’s going on?” says David Allen, the head of the Los Angeles office. “I mean, come on.” Akin Gump originally took on 54 Troop lawyers, but that number includes several who left immediately after the merger, including members of the entertainment transaction group. Soon after, the former Troop labor group scattered to other firms. Last year Akin Gump laid off 12 corporate attorneys, effectively shutting down its entertainment practice — one of the biggest reasons it merged with Troop in the first place. “We just couldn’t make that practice work,” says Allen. “It wasn’t going to be profitable for us.” The firm’s L.A. office has gone from roughly 130 lawyers to 110. Early this year, two of Troop’s founding partners, who were consultants at Akin Gump, left for Sheppard Mullin Richter & Hampton to start a studio-side entertainment group as senior advisers with their old partner, Louis Meisinger, the former general counsel of The Walt Disney Company. According to the head of that practice at Sheppard, former Troop partner Robert Darwell, there are now about 16 former Troopers at the firm. (Darwell is not a claimant in the arbitration.) The Troop claimants say because they don’t yet have their hands on the pertinent financial documents, they can’t make an accurate damages claim except that they’re in the millions. With that kind of money now on the line, was the merger a disaster? Rick Burdick, chair of Akin Gump’s business transactions department, wouldn’t go that far. “The Troop firm, when it merged, ended up being a lot more fragile than we anticipated,” he says. Akin Gump probably won’t make that mistake again.

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