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Law firms large and small shuttered in 2019. Some, like LeClairRyan, were done in by mounting expenses and waves of defections. Others, like the intellectual property boutique McCaulley Dowell, were driven to close up shop by pressures that most other firms didn't face. Meanwhile, a spate of small firms closed after their leading partners split.

LeClairRyan

Am Law 200 firm LeClairRyan was 2019's biggest failure. While head count rose in the decade before the firm's collapse, its profits were stagnant, with costs rising in step with revenues. The firm missed budget in 2011 and several subsequent years. With partner defections mounting— including name partner Gary LeClair, who joined Williams Mullen in July—the firm filed for bankruptcy in September, after having tallied 273 lawyers the year before.

Sources told The American Lawyer that compensation was opaque and complicated, with some partners benefiting from guaranteed payouts even as others poured in capital and took haircuts as profits fell. Overhead, like office space, was also expensive, and got even more expensive on a per-lawyer basis as departures mounted.

One of LeClairRyan's efforts to succeed was its partnership with UnitedLex, the legal technology company. What started with a transfer of hundreds of employees who did discovery work in 2013 grew into a joint venture, ULX Partners, which was envisioned as an entity that would supply back-office support to law firms. Bankruptcy filings later revealed that LeClairRyan had just a 1% stake in the entity, however, and owed about $12 million to ULX.

Budd Larner

New Jersey's Budd Larner had seen changes over the years, but the departure of key partners and groups of lawyers in 2018 and 2019 proved to be too much, and it shut its doors in July. The firm transitioned from insurance defense to offering a broader range of services, and its head count peaked around 110 lawyers in the 1980s, a period that also saw the firm represent plaintiffs in tobacco litigation. The firm has office locations in Short Hills and Cherry Hill, New Jersey, as well as New York and Philadelphia.

About four years ago, the firm's attorney head count was around 75. In the lead-up to its closure, it was in the 20s. The full story of the firm's failure still hasn't been told, and it hasn't filed for bankruptcy, but the alleged theft of $900,000 by its chief technology officer in the years leading up to its closure probably didn't help things.

One former partner, Joshua Weiner, previously told Law.com that the firm was managed "more as several different firms rather than one firm."

Day Ketterer

The end came quickly for Day Ketterer, a full-service midsize firm based in Canton, Ohio, that listed about 43 lawyers on its website in late September and listed 17 equity partners in court filings. While the firm's history stretched back to 1872 and it had shown signs of life as recently as 2018, when it snapped up a six-lawyer firm in nearby Akron, the local paper reported rumors of Day Ketterer's demise less than two weeks before it folded up shop.

The firm said in a dissolution resolution filed in state court that while it was financially sound, recent lateral moves, retirements and anticipated retirements over the next three to five years would have led to the firm's demise.

"The firm will soon be unable to generate distributable income to compensate its attorneys sufficiently to retain them and to attract high-quality and productive lateral attorneys," the resolution said.

Carter Conboy

Carter, Conboy, Case, Blackmore, Maloney & Laird, a firm in Albany and Saratoga Springs, New York, will be dissolving Dec. 31, according to the Albany Times-Union. The firm, which lists 22 lawyers and four staff on its website, said its lawyers will be joining other firms or launching their own, but it didn't specify what led to the decision to close up shop.

Brian Carr, a shareholder at the firm, confirmed the news in a brief phone call Dec. 23.

McCaulley Dowell

About a year after former Ropes & Gray's IP practice head Richard McCaulley teamed up with his law school classmate Anthony Dowell to launch McCaulley Dowell, the IP boutique in Chicago was no more. The firm's partners said they faced difficulties of scale—a small team made it hard to win new work, and a lack of new work made it hard to grow the team—and said the patent litigation that they specialized in has dried up in recent years, due to changes in federal law and adverse court rulings.

The pair have since moved on to new firms, with McCaulley joining Haley Guiliano and Dowell joining Gutwein Law.

Bloom Hergott

A great deal of business litigation is settled with kind words and nary a detail made public, but the resolution of Johnny Depp's dispute with his former lawyer Jake Bloom of Bloom Hergott was bitter. In entertainment industry publications, Depp's lawyers crowed that they'd won an "eight-figure" settlement from Bloom and sued his firm "out of existence." Bloom's lawyers said their client was simply satisfied to have gotten off "the endless Johnny Depp litigation train."

Depp's courtroom victories over Bloom Hergott, which took $30 million in fees from him on the basis of an unwritten agreement, were widely seen by lawyers for Hollywood talent as a move that would reshape their client relationships. The former partners of Bloom and Alan Hergott are continuing to practice under the name Goodman Schenkman & Brecheen.

Partner Splits

Just as in previous years, a smattering of small firms closed in 2019 when lead partners chose to split and practice law in other shops. Law.com reported earlier this year that six-lawyer Morris & McVeigh, one of the oldest law firms in New York City, planned to close its doors, with its managing partner and another of its attorneys taking their tax and estates practices to Blank Rome.

Meanwhile, bicoastal entertainment law firm Gray Krauss Sandler Des Rochers, with 21 attorneys, broke up, with its partners spinning off several new firms in the process. In an interview, partner Jonathan Gray stating said he wanted to focus on his clients and on his own production work, rather than having to devote so much time to firm administration.

Good Times, Bad Times

Even as the larger legal industry saw good times in 2019, some firms survived to the end of 2019 after a very challenging year.

In the case of D'Amato & Lynch, a shrinking Manhattan firm known for its insurance defense work, the firm's website has gone offline. It has been sued for back rent by a former landlord and accused by a former client of depositing a $1 million check that was meant to settle a case into its operating account.

The ex-client, First Mercury Insurance Co., said in court papers that D'Amato "advised that it was no longer able to handle" the insurance firm's work. Luke Lynch, the firm's head, hasn't responded to questions about whether the firm is winding down.

CKR Law, too, struggled this year. The firm, which reportedly failed to pay partners for several months earlier this year, announced at various points in 2019 that it was affiliating with Yingke Law Firm and then Jingsh Law Firm, both large Chinese law firms. In November, it announced that its managing partner, Jeffrey Rinde, would soon helm two firms, both CKR Law and Jingsh Law Firm LLP.

Liddle & Robinson, which represents white-collar professionals in employment suits, is set to wind down, although it continues to litigate and settle cases. The firm filed for bankruptcy earlier this year after its sole remaining partner, Jeffrey Liddle, did the same. A Chapter 11 trustee was appointed in December after the U.S. trustee and the firm's primary creditor complained that the firm was dragging its feet on the wind-down process. Liddle may start a new firm, although he hasn't said whether that's in the cards.

Read More:

How LeClairRyan's Grand Plans Unraveled

Budd Larner Expected to Close This Summer, Sources Say

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