The press release lists several reasons for the firm's decision to close, namely economic factors, including "recessionary pressures and numerous partner departures over the past year, both of which have negatively impacted firm revenues."
Also contained within the press release, was an interesting consequence due to the exodus of partners this year. Thelen has breached a "partner departure covenant that restricts the number of partners who may depart the firm within any twelve month period. As a result, the firm’s bank now has control over expenditures." As a result, Thelen is negotiating paying employees for their accrued vacation pay and also 60 days salary: "The response to date from the bank is that it will fund employee salary through Nov. 30, but will not pay accrued vacation pay," according to the release.
Luckily, it seems that some of Thelen's 400 attorneys will find a home at Nixon Peabody, a firm located on the East Coast. The Reporter wrote:
"While reports of top Thelen lawyers, including Chairman Stephen O'Neal, negotiating to move to new firms have surfaced lately, the biggest move currently in the works seems to involve about 60 partners and associates going to Nixon Peabody. The East Coast-based firm sent offer letters to the group, the vast majority of which is in San Francisco, according to a source close to Thelen. Among them is partner Jennifer Kuenster, co-chairwoman of commercial litigation and member of Thelen's partnership council. The group includes lawyers from the mass torts and labor and employment practices, the source said."
As for those who don't have potential jobs in their queue, The Reporter quoted a Thelen attorney as saying, "We felt I think as a group that there was full disclosure and a true commitment to help folk who don’t have jobs lined up."
Thelen is an AmLaw 100 law firm and has offices throughout the US and one in Shanghai. Best-known and respected for their work in the fields of construction and government contracts, energy and utility, corporate finance, commercial litigation, China securities, and mergers and acquisitions among others. Thelen was founded in 1924 in San Francisco.
The announcement was another punch to the area's large legal community. Just a little over one month ago, San Francisco also saw the collapse of another well-known and well-respected firm, Heller Ehrmann. Heller Ehrmann had been in operation for 116 years.
