The Sunday Times had a very interesting article on the fallout from Brobeck's fall. It offers some areas of concern for GAs at other firms in the Death Pool.
The Unraveling of an Un-Law Firm
By JONATHAN D. GLATER
BROBECK, PHLEGER & HARRISON tried to be the un-law firm, young and hip instead of staid and boring.
With expansive offices in a downtown San Francisco office tower, it was not the kind of place where lawyers wore white shirts and striped ties. While young associates at other firms complained about endless hours, pushy partners and boring work, Brobeck, according to a former associate there, was often fun. And profitable: the firm's roughly 150 partners took home an average of $1.2 million each in 2000, and associates were paid wages as high as those offered at many older, powerhouse firms in New York.
Its clients, including companies like Cisco Systems and Compaq Computer, were ebullient, riding to fabulous wealth on the crest of the new Internet economy.
So when partners told employees in January that the firm would be closing, many of the roughly 450 lawyers and nearly 1,000 staff members there weren't just stunned. They felt betrayed.
They found that their firm had not paid administrative fees for its 401(k) plan, locking them out of their accounts for months. Many found themselves suddenly without health insurance. Some have been stuck with unreimbursed firm expenses. And many say they have not received information about any of these problems — let alone about how to deal with them — from their bosses.
Many former senior partners said they were embarrassed by the collapse of the firm and no longer wanted to have their names associated with it. Privately, they said they, too, were hurt badly financially by the firm's problems, which became acute when its debts became immediately payable as a result of the departure of a number of partners.
The collapse of any business can be devastating to employees. But the fallout from Brobeck's demise, which has already spawned a lawsuit by former employees, has exposed many of the resentments that are usually hidden in a law firm. Staff members like secretaries and computer technicians say they were treated much worse than the well-paid associates, and many Brobeck employees resent the hundreds of thousands of dollars that they believe the partners paid themselves even as the firm's prospects deteriorated.
Perhaps most striking is the way Brobeck's downward trajectory resembled that of any other company in trouble, even though the firm occasionally provided strategic advice to companies in financial trouble.
There are bitter parties on all sides and much slinging of blame.
Charles Bencomo, who worked in computer support in the firm's office in New York, said he was surprised to learn in mid-February that he could not withdraw funds from his 401(k). In early 2002, Brobeck stopped paying UMB Bank to administer the firm's plan, which held more than $160 million.
Employees knew the firm was having some trouble — it had gone through layoffs last year — but "for that to happen was pretty shocking," said Mr. Bencomo, who now works in computer support at another law firm, McDermott, Will & Emery. Many of Brobeck's employees were eventually able to pull money out of 401(k) accounts, and all should ultimately be able do so.
Mr. Bencomo said he was still bitter that the firm did not contribute a bonus of 5.5 percent of his salary to his 401(k) account, as it had in previous years. But at least he was able to find another job, he said.
"I was fortunate," Mr. Bencomo said. "I was able to land on my feet. But there are a lot of people who couldn't."
Full text:
http://www.nytimes.com/2003/06/22/bu...22FIRM.html?th
