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With the abrupt ending of mass tort litigation over the diet drugs known as fen-phen, Porzio, Bromberg & Newman laid off 53 people, including 16 lawyers and 21 paralegals, on July 18. The firings follow earlier layoffs over the last few months which collectively have reduced the Morristown, N.J., firm by close to a third — from about 110 lawyers after hiring of first-year associates last September to 75 at present. The firm had been defending Madison-based pharmaceutical giant Wyeth before Superior Court Judge Charles Walsh in Bergen County, but the work dried up when the firm representing most of the remaining 943 cases administratively withdrew the complaints. “A week ago, I anticipated that the litigation would go on for a longer period of time, but it ended abruptly last Thursday afternoon [July 14],” says managing partner D. Jeffrey Campbell. The dismissed employees, who included 16 support staff, were instructed to attend a 2:30 p.m. meeting on July 18, but no one knew who else received the message as the e-mails were not copied. Campbell says he informed them of the need to cut staff, and that they would be locked out of their computers and would have to leave by 6 p.m. Boxes were placed on their desks to help with packing while the 53 were at the meeting. “It was a heinous way to do it,” says one associate who was let go, adding, “There must have been a better way to do it.” Still, this associate acknowledges that the winding down of the litigation seemed evident and that some lawyers had begun looking around for work elsewhere. The firings came just 11 weeks after the firm was ranked the second-best place to work in New Jersey by the magazine NJBIZ, the state Chamber of Commerce and a statewide employer council. Porzio was rated the top law firm in the rankings. The firm is trying to assist the lawyers in landing somewhere with referrals to other firms and to consultants. “Our partners have been calling colleagues to try to place these people, and one has already gotten a job while a few others have gotten interviews,” says Campbell. Campbell says further that he discussed the possibility of cutbacks with associates at the conclusion of the case. Those let go received a severance package and continued medical coverage during the severance period. For the majority of the lawyers, the severance was about six weeks’ pay. The firm laid off one counsel, 14 associates and one contract lawyer. All of the terminated associates except one were laterals recruited over the past two to three years as the firm ramped up for fen-phen. The counsel was Charles Erway III, who joined the firm as an associate in 1987 after practicing in New York for seven years. Erway, 56, was elevated to counsel when the firm created the title in 1990. A products liability, toxic torts and appellate lawyer working on the Wyeth matter, Erway speaks Mandarin and Cantonese Chinese as well as German. Erway, described by one colleague as an excellent brief writer, did not return a message left at his home on Friday. The now-departed laterals, most ranging in age from 28 to 35, came for the most part from top firms, including Newark’s Gibbons, Del Deo, Dolan, Griffinger & Vecchione; McElroy, Deutsch, Mulvaney & Carpenter and Bressler, Amery & Ross, both of Morristown; Hackensack’s Cole, Schotz, Meisel, Forman & Leonard; and Newark’s Saiber, Schlesinger, Satz & Goldstein. Two were lured to the firm’s Manhattan office, one from New York City’s Law Department and another from the multistate firm of Mintzer, Sarowitz, Zeris, Ledva & Meyers. One senior associate, Jennifer Hurley, who has been practicing for 21 years and hails from the Chicago office of the national firm Holland & Knight, was among the downsized. FEN-PHEN PHASE II Earlier this year, Porzio Bromberg let go another seven to eight contract lawyers assigned to the fen-phen litigation, which has involved hundreds of depositions, huge volumes of document production and countless hours of review by medical experts of electrocardiograms of plaintiffs who claim heart-valve damage from taking the cocktail of diet drugs. The litigation is actually the second phase of the work. A nationwide class action was settled in 2000, following the removal of the drugs from the market by the Federal Drug Administration in 1998 after tests disclosed possible heart damage from the fen-phen combination. But some 50,000 potential claimants opted out of the deal, which resulted in a $3.7 billion trust fund. Almost 5,800 of the opt-outs were in New Jersey. Those cases were consolidated with Superior Court Judge Walsh in Hackensack, with Porzio Bromberg defending, along with Washington, D.C.’s Arnold & Porter and the regional firm of Reed Smith. Campbell says the second phase kept the firm busier than the class action phase, an observation borne out by the last remaining plaintiffs firm with a substantial number of claimants, Williams Bailey of Houston. “There were hundreds of depositions for each plaintiff, their spouse, their regular doctor, their cardiologist, and the experts,” says Williams Bailey associate Armi Easterby, who says his firm is laying off from five to seven attorneys as a result of the withdrawal. Easterby says, though, that the withdrawal is for the purpose of trying to settle the cases, saying they could be re-filed next year. PORZIO GREW FAST Porzio Bromberg has been growing for several years, more than doubling in size from mid-1999, when the firm reported having 51 attorneys. It topped 70 lawyers by mid-2003 and reached 90 lawyers by early 2004. While a lot of the growth is attributed to mass torts, there has been expansion in other areas, including bankruptcy, commercial real estate, corporate transactional work and regulatory compliance and government affairs work on behalf of pharmaceutical clients. Laterals have come aboard from major firms such as Clifford Chance as well as from many of the big in-state rivals. Porzio Bromberg first appeared in the New Jersey Law Journal’s Top 20 survey of the largest grossing New Jersey firms in 1996, placing 20th for the year 1995 with revenues of $15.9 million and 43 lawyers. It has placed between 13th and 17th since, but broke into the top 10 in the survey published last month, finishing ninth and grossing $50 million. The firm is highly leveraged — having a high ratio of associates to partners — which has produced impressive profits per partner, topping out at $708,000 last year. Porzio Bromberg had another huge mass tort case, representing New York-based international mining company ASARCO Inc., which faced many thousands of asbestos claims, all in states other than New Jersey. But the relationship as national counsel ended in mid-2003, when ASARCO was bought out and new management took over. Managing partner Campbell says the Wyeth litigation began to heat up as the ASARCO work was ending, thus allowing the firm to retain most of its lawyers. The firm recently lost top partner Robert Brennan to the bench and in April lost one of its upcoming stars — Daniel Winters, manager of its Manhattan branch — to Reed Smith. Winters, who made partner last November, is 36. Though he handles toxic torts, as well as computer technology matters, and was involved in the Wyeth defense, his departure was unrelated to the litigation, he says. Another younger partner, environmental lawyer Jeffry Koenig, went in-house in January. EYES ON THE WORK AT HAND Campbell says the firm continues to do well. He has said in the past that the firm has no fixed goals regarding size, saying the firm is staffed based on the work at hand. Moreover, Porzio Bromberg, he points out, achieved good results for Wyeth, with many hundreds of claims being tossed by Judge Walsh and with most of the remaining cases now being withdrawn. “Sometimes you have less work because you get a good result for your client, and that’s, after all, what it’s all about,” says Campbell. One lawyer close to a few Porzio lawyers opines that the firm should have perhaps used more contract lawyers rather than recruit laterals for the Wyeth work, saying some associates may have assumed they’d be reassigned to other areas when the mass tort cases slow down or end. Campbell, in response, says some contract lawyers were indeed hired, while some associates in the fen-phen case were in fact reassigned. But he says the firm simply can’t carry that many lawyers with the current caseload.

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