As the largest law firm failure in U.S. history, the death of Dewey & LeBoeuf has naturally commanded much of the industry’s attention this year. At the same time the ongoing saga of Dewey’s demise has managed to obscure the fact that 2012 has seen a batch of smaller shops around the country close their doors as well.
Gardere Wynne Sewell’s addition of patent litigation partner Paul Storm to its Dallas office last week, for instance, effectively spelled the end of the intellectual property boutique he founded in 2005.
While Storm LLP — which had about 20 employees at its height — officially shuttered its operations on Dec. 31, 2011, Paul Storm told Daily Report affiliate publications The Am Law Daily and Texas Lawyer in separate phone interviews Friday that he continued working as the firm’s sole partner under the name Storm PLLC.
And though a story in The American Lawyer‘s Fall 2012 Intellectual Property Supplement suggests that — contrary to conventional wisdom — not all IP specialty shops are doomed, Storm says it was clear to him that his business model was no longer working. By focusing on plaintiffs-side patent litigation, he says, the firm was often forced to spend heavily while waiting for cases to pay dividends. And when Storm LLP sought defense-side work from major corporate clients, it frequently found itself facing off against larger rivals.
“It was a constant battle,” says Storm, whose firm leased 15,000 square feet of space at the top of the Bank of America Plaza skyscraper in downtown Dallas for nearly five years before downsizing to a more modest space in nearby Arlington, Texas, in December.
The move and the slight change of his firm’s name came about the same time that former firm partner Christopher Kling sued Storm over unpaid bonuses, according to a story published at the time by Texas Lawyer. The litigation is ongoing, says Storm, who told Texas Lawyer he disclosed the suit to Gardere before joining the firm. Kling didn’t respond to a request for comment, but his lawyer, R. Rogge Dunn of Dallas’s Clouse Dunn, told Texas Lawyer that discovery has been exchanged and depositions scheduled in the case.
In January, Thompson & Knight hired former Storm LLP partner Sarah Paxson and associate Anthony Miller in Dallas. Storm himself was set to join the Am Law 100 firm, but a conflict prevented him from doing so, according to a Thompson & Knight spokeswoman. (Another former Storm LLP partner, Mark Perdue, received some unwanted attention in June, when his wife was arrested on child pornography charges, according to Texas Lawyer.)
Paul Storm, who has 22 years of experience trying cases in state and federal courts, as well as before the International Trade Commission, says he spent the next several months on his own finishing up cases and collecting on outstanding accounts receivable. While several other large firms contacted about him about coming on board during that period, he says, in the end Storm decided 231-lawyer Gardere — which had $149.5 million in gross revenues last year — offered the best fit.
“I wanted some place that was bigger, but not too big,” says Storm, who told Texas Lawyer that Gardere’s patent prosecution practice was also a draw. Storm is taking his longtime assistant with him to the firm.
A somewhat larger firm that also appears to be nearing its end is Wilmington, Del.-based Connolly Bove Lodge & Hutz, which recently saw a group of 20 commercial litigators break off to form a new firm under the name Connolly Gallagher, according to sibling publication Delaware Law Weekly, and Los Angeles – based IP partner Bruce Chapman jump to Sheppard, Mullin, Richter & Hampton.
The departures come a little more than two months after Delaware Law Weekly reported that Connolly Bove, one of Delaware’s oldest law firms, was on the verge of breaking up by splitting its commercial litigation and IP practices into separate entities. Factors cited by Delaware Law Weekly as contributing to the firm’s demise include debt incurred through an expensive office lease and a decline in patent litigation work.
Venerable firms in Minnesota and Wisconsin also closed their doors this year. The Business Journal of Milwaukee reported last month on the closing of 116-year-old Cook & Franke, which quietly dissolved earlier this year — an event that coincided roughly with the February death of name partner Harry Franke — but was not officially announced until August.
Meanwhile, in the neighboring North Star State, the Minneapolis-St. Paul Business Journal reports that Moore Costello & Hart, which was founded three years before Minnesota was granted statehood in 1858 and once counted U.S. Supreme Court Chief Justice Warren Burger as a partner, ended its 157-year run in August.
The legal market in the nation’s capital also saw a notable firm closing in April when Washington, D.C. – based Janis, Schuelke & Wechsler announced it was dissolving after three decades practicing law. Name partners Henry Schuelke III and Lawrence Wechsler joined Blank Rome, while Richard Janis departed for Manatt, Phelps & Phillips.
Around the same time, The Am Law Daily reported on St. Louis – based Gallop, Johnson & Neuman’s preparations to close its doors after 36 years amid the defections of various groups of partners for Am Law 200 suitors as Polsinelli Shughart and Lathrop & Gage. Gallop Johnson is now in the process of winding down its operations.
Even for smaller firms, breaking up isn’t always easy to do. One firm in the midst of an acrimonious split is New York’s Arkin Kaplan Rice, according to sibling publication the New York Law Journal.
Earlier this year, one group of former firm partners sued another over the latter’s alleged refusal to vacate Arkin Kaplan’s offices. The two camps have spent subsequent months trading insults and accusing one another of impeding the firm’s dissolution. Last month the New York Law Journal reported that a New York state court judge was urging all parties to find a way to settle their differences.
Brian Baxter writes for The Am Law Daily, a Daily Report affiliate.