LeClairRyan, the three-decade-old Richmond law firm that just a few years ago had nearly 400 attorneys but has been battered in recent months by mass departures, is going out of business.
The firm, which keeps its local office in the SunTrust Center downtown, announced Wednesday its shareholding partners voted to “commence an orderly wind down of the firm’s business.”
“The decision to wind down was reached after the firm concluded that doing so was in the best interest of our clients, colleagues, and creditors,” it said in Wednesday’s release.
The depleted firm has lost dozens of attorneys over the last two years, a steady stream that turned into a mass exodus beginning late last year and has continued unabated.
The departures culminated late last month with the exit of cofounder and namesake Gary LeClair, who jumped to Williams Mullen and brought a handful of LCR lawyers with him.
Firm leadership did not comment beyond the prepared statements issued in a press release.
CEO Erik Gustafson, who last month said the firm was weighing options for its future, said in the release: “On behalf of my colleagues, we are deeply saddened to make this announcement today.
“I am thankful to all of the clients who have chosen to work with our team over the last 30 years, and I am grateful for the exceptional lawyers and professionals who continue to work with dedication and determination towards winding down the firm in an orderly fashion,” Gustafson said.
The firm did not provide a timeline for the wind down process, though sources inside the firm who asked not to be named said it’s expected to shut doors at many of its offices by the end of August.
The firm said a dissolution committee is working with its lender to ensure continuity of client service until it ceases operations. It said it will continue to serve those clients that have matters that are already commenced.
It acknowledged that many clients will continue to follow departing attorneys and it expects those attorneys to land elsewhere.
“As has been reported in the press over the past few weeks, some of our colleagues have already moved to new firms that can appropriately support the needs of the clients that choose to follow them,” the release stated. “We anticipate the remaining attorneys will likewise do the same over the coming weeks.”
The firm was down to fewer than 170 attorneys as of this week, a figure that’s likely already decreased in the wake of Wednesday’s announcement. Founded in 1988 by LeClair and Dennis Ryan, the firm peaked in terms of lawyer headcount about three years ago with nearly 400 and more than two dozen offices around the country.
While Gustafson said in recent weeks he wasn’t authorized by the firm to discuss the reasons behind the mass departures, many former partners said the attorney exits were fanned in part by the firm not making budget and therefore not having money to fully pay out partners in the last several years.
Those former partners also say they haven’t been repaid for the equity they paid into the firm to become shareholders. They say they are owed a collective $8 million to $9 million, and fear they’ll never see any of that money as the firm dissolves.
Others point to the firm’s appetite for growth and efforts to become a national firm, which began to ramp up around 2008, as playing a role in its current predicament.
The firm said publicly as recently as February that it remained profitable, despite its revenue having declined by $60 million since 2015 to $122 million last year.