Pride before the fall - awkwardly, Halliwells got a lot right
Having spent hours poring over this week's analysis of the fall of Halliwells, I come today not to bury the firm but to praise it. With Legal Week having spoken to dozens of close observers of the firm's collapse, it became apparent that some have conveniently forgotten what Halliwells achieved during its striking ascent. Perhaps that is inevitable. It is human nature to lean heavily on hindsight when condemning the decisions of others - it is a habit that journalists, particularly, fall prey to. But individuals, especially those running businesses, don't have the benefit of hindsight.
September 08, 2010 at 04:47 AM
3 minute read
Having spent hours poring over this week's analysis of the fall of Halliwells, I come today not to bury the firm but to praise it. With Legal Week having spoken to dozens of close observers of the firm's collapse, it became apparent that some have conveniently forgotten what Halliwells achieved during its striking ascent.
Perhaps that is inevitable. It is human nature to lean heavily on hindsight when condemning the decisions of others – it is a habit that journalists, particularly, fall prey to. But individuals, especially those running businesses, don't have the benefit of hindsight.
Nowhere is this more apparent than in how the now-notorious decision regarding the property-related payout distributed to the firm's equity partners in 2007 is now discussed. It was certainly a deal that contained risks and it failed to address the imperative of investing in the future of the business. But given Halliwells' track record of growth, it was a more calibrated bet than some have allowed. There is also the small matter that the firm suddenly faced a very deep recession, which virtually no-one forecast.
Certainly, Halliwells made mistakes – but frankly I've seen a lot worse in 14 years covering business. For all the brickbats now hurled at the firm, Halliwells was an impressive performer from the mid-1990s until it began to over-reach around 2006, and it was widely lauded at the time. Indeed, there was much to admire in the firm's entrepreneurial spirit.
So what lessons are there to take from Halliwells' fate, if you reject casting the firm's management as pantomime villains? For me, the key point is that this episode shows that law firms rise and fall on the unity of their partnership. Plenty of firms bicker, but those that don't have the ability to put issues aside when testing times come are very, very vulnerable.
As a related issue, communication from management matters. A lot. The biggest failing of the Spinningfields deal was not the size of the payout, but the decision to conceal it from the fixed-share partners. This destroyed trust and badly split the partnership. A more ambiguous point is that Halliwells' fate shows that fast-growing law firms are inherently more vulnerable as expansion makes it harder to enforce process and guard profits.
Relatedly, entrepreneurial law firms typically have entrepreneurial partners – and clients are more likely to move with departing partners. That's a very tricky balance for law firm leaders to manage, since most want to achieve growth but are less keen on the instability caused by clients following mobile rainmakers.
A final point – partnerships are very bad at shouldering debt. By the standards of a corporate, Halliwells had conservative debts, but in retrospect it was enough to destabilise a large legal business. But I suspect we'll be learning from this drama for a while yet.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllMcDermott Hits Paul Hastings In London Again As Macfarlanes Also Swoops For Talent
2 minute readRe-Examining Values: Greenberg Traurig's Executive Chairman on the Lessons of the Pandemic
4 minute readDiversity Commitments Feel Hollow When Firms Cosy Up to Oppressive Regimes
Trending Stories
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250