Wolf Block law firm will dissolve

Hit hard by defections of top lawyers and tight credit markets, partners at Wolf Block voted this afternoon to disband the 106-year-old law firm, a Philadelphia institution that for generations played a central role in the city's civic, legal and governmental affairs.

The decision was made during an emotional partners meeting at the firm's Center City offices. Lawyers from offices in other cities were video-conferenced in.

Like many other firms, Wolf Block had been hit by a sharp fall-off in revenue as credit markets seized last fall and the housing market collapsed. But the firm also had been plagued with defections by top fee generators and faced further defections in the coming months.

The prospect of those losses made it difficult for the firm to obtain the bank credit it needed to tide it over until the economy revived and its billable hours increased.

Insiders said bank credit was available, but at rates that many partners considered unacceptable. There also was concern that if partner defections continued, a dwindling number of lawyers would be left to service the debt.

"We are deeply saddened by the decision to unwind," said Mark Alderman, chairman of the firm's executive committee. "But we intended to conduct ourselves during this difficult time with the pride, focus, humility and determination that have characterized Wolf Block lawyers for more than a century."

The firm has been hit hard by the decline in the real estate market and municipal finance.

Firm leaders had hoped that the advent of the Obama administration would help to make up for some of that shortfall.

Late last year, Wolf Block allied itself with the lobbying firm of David Urban, former chief of staff to U.S. Sen. Arlen Specter (R., Pa.), in the belief that its close ties to the Obama administration would make it the choice for corporate clients seeking assistance in gaining government contracts and a share of the government's financial bailout.

But lobbying, even at the most established and successful law firms, typically accounts for only a relatively small share of overall revenue. And whatever additional business came in clearly wasn't enough to offset hemorrhaging in other Wolf Block business lines.

Little more than a year ago, several of the firm's top litigators left to join the Center City firm of Hangley, Aronchik, Segal and Pudlin. That departure and others over the years tended to underscore Wolf Block's reputation as a firm wracked by internal discord.

One top city lawyer who declined to be identified said that the firm's troubled reputation made it more difficult to recruit top talent, and that this, in turn, hobbled Wolf Block's ability to build an economically diverse practice.

The firm said that it would remain open for several months to wrap up matters for clients and to provide a transition for its employees.

In its statement, it said that ongoing partner defections and tight credit had posed insurmountable obstacles to the firm's survival.

"The partners concluded that continued efforts to finance the firm's operations in the face of these obstacles was unwise and could risk greater hardship later to firm clients and employees than if the situation were to be managed now in an orderly and responsible manner," the statement said.