Testa, Hurwitz Implodes –

The Boston offices of law firm Proskauer Rose were a case study in organized chaos two weeks ago, with moving boxes in the hallways and prospective new attorneys in the waiting area.

This may sound anathema to the fastidiousness typically displayed by Boston law firms, but it is hardly unique. In fact, a large number of area firms are in similar disarray, as they scramble to scoop up attorneys and clients from the remains of Testa, Hurwitz & Thibeault (THT).

THT had been Boston’s leading private equity law firm for several decades. Dick Testa, who commanded such loyalty that rival firms often complained of how difficult it was to hire away the firm’s partners or clients, ran it until his death in December 2002. The partnership then began to unravel. In June 2003, for example, emerging company star John Hession left to join McDermott Will & Emery, while three Intellectual Property attorneys – Steven Bauer, Joseph Capraro and Daniel Bernstein – left to open New York-based Proskauer’s Boston office last February. More recently, fund formation partner Tom Beaudoin joined Wilmer Cutler Pickering Hale & Dorr.

The biggest blow, however, came in the fall, when 10 partners decided to leave en masse, with seven going to Proskauer Rose and three going to Bingham McCutchen. The “Seven Dwarves” – as they were known within THT’s High Street offices – included private equity group co-heads Robin Painter and David Tegeler, while the “Three Stooges” included transactional standout Steven Browne.

“Things happened very quickly after the 10 decided to leave,” says Bill Schnoor, a THT private equity attorney who recently agreed to join Goodwin Procter.

While individual partners were trying to make backup plans, THT managing partner George Davitt was trying to find a merger or acquisition partner. He held several meetings with unnamed firms, but was simply unable to close the deal.

“Integrating an entire law firm is difficult to do, particularly if you’re more interested in one group of attorneys than another group within the same firm,” suggests Alex Temmel, a partner with Proskauer Rose’s private equity group.

Davitt says that he finally gave up on the merger prospect the week of Jan. 4, at which point he personally received permission to begin looking for another job. During an early morning partners meeting on Jan. 14, the partnership agreed to disband.

The result, of course, has been the aforementioned organized chaos. The biggest winner to date – in terms of landing THT attorneys – has been Goodwin Procter. It has added 18 other THT partners in addition to Bill Schnoor, and is expected to add about two associates per new partner. It also grabbed five partners from rival McDermott Will & Emery, including private equity transaction titan – and former Goodwin Procter partner – John Egan.

Sources say that Proskauer Rose made a serious play for Egan, but that he agreed to rejoin Goodwin Procter, in part, thanks to a meeting with Schnoor, who one rival attorney referred to as a “pit bull” when it comes to recruiting.

Proskauer declined to comment on the Egan situation, as did Schnoor. For its part, all McDermott Will & Emery has said about Egan and company is that it “wishes them well.”

Legal market sources say to expect continued movement over the next several weeks, as resumes continue to fly. Most of that will continue to come from THT, although a few more Egan-like moves are said to possibly be in the cards.

Clients also are making decisions, although at a much slower rate. Many of them still are trying to learn more about reworked firms, while others wait to see where their particular attorneys (both partners and associates) land.

“This has been the strangest month of my entire professional career,” says one area attorney, whose firm has been right in the thick of the resume hunt. “I’d like to say that it can’t get any stranger but, then again, I would have never thought that Testa would implode.”