500 US jobs to go as Testa Hurwitz partners vote for March wind-up
250-lawyer East Coast venture capital leader set to close doors following shock dissolution vote
January 19, 2005 at 07:03 PM
3 minute read
Boston VC leader Testa Hurwitz & Thibeault is to close its doors by mid-March – laying off around 550 staff – following last week's dramatic dissolution vote.
The partner vote, held on Friday (14 January), agreed to terminate the 32-year-old practice, one of the East Coast's best-known venture capital and technology specialists, handing 200 associates and 320 support staff 60-day termination of contract notices.
Under the partnership deed, a two-thirds vote was needed to back the dissolution, although it is reported that only one of the firm's partners voted against the move.
Retired name partner George Thibeault has agreed to head the dissolution committee, which includes former managing partner Bill Asher, business practice chair Mark Smith and chief operating officer John Walsh.
The firm cited the resignation of 10 partners in December from its core private equity practice and the failure to secure a merger as the driving force behind the decision, which was first reported on legal-week.com.
Testa managing partner George Davitt told Legal Week: "We looked at merger options with many high-quality firms but, with so many partners looking at back-up plans, a suitor did not make sense."
Rivals pointed to the death in 2002 of founding partner and dominant force Dick Testa as a prime reason for the collapse.
"Dick ran the firm like a personal project and when he passed on prematurely, it was left without leadership, succession, culture, traditions or glue," said one senior Boston partner.
The lack of geographic diversity and the prolonged downturn in the technology sector were also cited as contributing factors.
"Once the technology work evaporated, Testa tried to expand into other areas but was still a corporate technology-focused firm," commented one rival Boston managing partner. "Going from working on 57 IPOs one year, to zero the next is a sign of how bad the market was for them."
Testa becomes the fourth high-profile US law firm closure in the past two years after Boston rival Hill & Barlow, San Francisco's Brobeck Phleger & Harrison and Chicago's Altheimer & Gray.
However, unlike Brobeck and Altheimer, Testa has no bank debt leaving only real estate liabilities for its sole office in Boston.
Boston firms Choate Hall & Stewart and Goodwin Proctor are already reported to be taking nine and 18 Testa partners respectively.
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