Wolf Block lacked a plan

It had a prodigious pedigree. Longevity. Political connections. And, for the longest time, a reputation as the law firm for cutting complicated real estate deals.

But the one thing Wolf Block apparently lacked, and which proved key to its undoing yesterday, was a strategic plan for surviving a boom-to-bust economy.

And as a mid-size firm competing for business against national practices and sharply targeted boutique outfits, it got squeezed.

The size of the firm, home to 300 lawyers, was just one challenge, observers said. Troubles surfaced several years ago as lawyers began leaving. Things reached critical mass when the real estate market took a nosedive, cutting into the firm's specialty.

When two merger efforts failed, management's rescue was in jeopardy.

In an industry where lawyers bail after squabbles over how the spoils are split, the defections hinted at dissatisfaction with the firm's management style, said Robert Denney, a law-firm management consultant in Wayne.

"When you start to get a steady stream of defections going on over a period of one, two, three years, and they come from different areas of the practice, that's a sign of trouble," he said. "Deep-seated."

The defections eroded the company's profits as departing lawyers took their clients to competing firms.

At the same time, the firm's managers struggled to complete a merger that they had hoped would diversify Wolf, Block, Schorr & Solis-Cohen L.L.P. sufficiently to survive the economic downturn.

"When I read about and heard about the two failed mergers, that's just a sign there's something wrong there," Denney said.

For years, the firm's focus as a real estate dealmaking powerhouse had served it well. Regional developers would look no further than Wolf Block as their first choice, said George Burrell, a former political adviser to ex-Mayor John F. Street and a Wolf Block alum from the late 1970s.

But that became its Achilles' heel: The firm did not have a varied portfolio to protect against a real estate market that has gone comatose.

The firm had neither grown large enough to diversify nor pruned itself to a niche-based outfit to survive.

"If you think about Wolf Block over the past couple of years, they seem to be a firm that is betwixt and between," said David L. Cohen, who led Ballard Spahr Andrews & Ingersoll L.L.P. after serving as former Mayor Ed Rendell's chief of staff. "They're not a big firm, they're not a small firm, they're not even a mega-regional firm."

Burrell said other midsize firms might be vulnerable, too.

"I think you'll see small niche firms that continue to find their way," he said. "But the firms that are in the middle of the spectrum with too many lawyers to be considered small and not enough lawyers to be considered mega, will find it difficult to compete."

Wolf Block tried to bulk up. But as it lost both merger efforts, more partners left the firm, Cohen said. The problem began to feed on itself.

The loss of one partner can have a major impact on a firm's bottom line, said Cohen, now a top executive at Comcast Corp.

"It's not too hard to imagine that, given the impact of the economy, Wolf Block could have lost 20 percent of its revenue base over a six-month period of time," Cohen said.

Abbe F. Fletman was among the partners who left. She departed three years ago and is a shareholder at Flaster Greenberg in Philadelphia.

"Structurally, when you have a firm that's as big as Wolf Block, not every equity partner could have a say in the firm," said Fletman, 49.

After eight years at Wolf Block, Fletman said, yesterday's news of its dissolution felt "like a sibling died."

While she has fond memories, she left, in part, because Wolf Block's size "didn't lend itself to Athenian democracy.

"I was looking for some place where I could have a bigger impact on the firm."