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Shanghai, Dubai Or Bye-bye?

Publication Date: 
November 27, 2008
The Economist

Professor Joseph A. Grundfest is quoted and the Securities Class Action Clearinghouse is referenced in The Economist in a story about the demise of two of San Francisco's most venerable law firms:

On December 1st Thelen, one of San Francisco’s most venerable law firms and until very recently one of America’s 100 biggest, will cease to exist. At the end of 2007 the firm announced annual revenues of $345m, and a profit per partner of $805,000—barely 4% less than in the very lucrative year of 2006, and following a merger that had nearly doubled its size. Its demise will come just three days after the dissolution of Heller Ehrman, another giant San Francisco law firm. During the 20th century, these two firms handled the legal work that underpinned the construction of such tangible marvels as the Hoover Dam and the Golden Gate Bridge.


A semi-annual report from the Stanford Securities Class Action Clearinghouse, due in January, will reveal whether the plunging stockmarkets are providing new work for those law firms that most miss their Wall Street clients. Joseph Grundfest, the Clearinghouse’s director, expects that the sort of “bet-your-life law firms”, the ones “dedicated to the legal equivalent of brain surgery” will keep their clientele intact. But the survival of companies such as Skadden, Wachtell and Cravath, which top the profits-per-partner rankings, will be no consolation to the “lesser elite” firms which also serve the Fortune 500, and which face a more uncertain future.

Mr Grundfest is not alone in speculating that the downturn will precipitate a shake-out among medium-sized firms. But some of these outfits, based outside New York and lurking beneath the AmLaw 200, spy opportunity. Wayne Risoli of Chamberlain, Hrdlicka, based in Houston, says his firm has poached at least eight Fortune 500 clients from bigger firms in the past year. GDF Suez, Black & Decker and Frontier Oil are among his firm’s new customers—along with two Fortune 50 companies he prefers not to name.