Posts Tagged 'lifeboats'

Why Is Heller Opposing Class Certification?

You may remember that the former employees of another esteemed law firm which imploded last fall – Thelen Reid – were able to have Thelen’s counsel, Latham & Watkins, stipulate to class certification.  

And while the counsel for the Thelen group is the same counsel which our class action group is using – Blum Collins – it appears as if Heller’s employment counsel, Manatt Phelps would rather fight such class certification.

This approach makes no sense at all unless the intent of John Fox, Manatt’s lead attorney on this matter, is to rack up lots of billable hours and soak money out of the estate’s pool of meager assets.  By opposing class certification, Heller is stating clearly that they don’t believe in paying their former employees what they earned while they worked for the firm.

In fact, Heller Drone has learned that during discussions as to class certification and the merit of the claims of the ex-Heller employees, the following concept was pushed: ex-Hellerites had so much accrued vacation because they loved working at the firm so much and never had a chance to use it.

Once you stop laughing at the asburdity of such an idea, wait a minute while humor turns to anger, as it should.  You should be angry that Heller feels a sense of entitlement in not paying wages that you as an ex-employee earned.  I could see them opposing the WARN Act penalties and some of the other items discussed on this blog.  

To want to fight in court over the basic principle of recognizing that there is a class of ex-employees that were thrown overboard from the S.S. Heller while shareholders scrambled for their lifeboats is not funny.  It is shameful.

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Today’s Firmwide Meeting – What To Watch For

Here are some things you might be on the listen for at the upcoming video conferences/meetings:

1. Efforts to weasel out of obligations to employees: If employees work or have worked, they must be paid. Employees also must be paid their accrued vacation and reimbursed expenses.  Employees may be entitled to severance pay under state or federal WARN laws. In a WARN mass lay-off it doesn’t matter whether employees quickly find new jobs (on their own or by moving with a group to a new firm), severance is owed.

I assume Heller management may have some kinds of deferred compensation plans/perks; depending on how these were set-up, some money may be owed to employees. Same is true with bonus and stock investment plans.

Listen carefully when management talks about health insurance: Heller management might be legally entitled to cut-off medical plans very quickly and/or limit the number of employees to who COBRA is available.  Listen for an unequivocal confirmation that there are no issues with the 401k or any other retirement funds that might affect our ability to access/rollover our accounts.  And ask when the plan(s) are being shut down.

2.  Blaming the banks: If there is any degree of weaseling on obligations to employees, management/shareholders will try to blame it on the banks, e.g., “gosh, we’re really sorry, but the bank won’t let us pay you.” If you hear that, alarm bells should be ringing loudly because it’s a weasel attempt to get off the hook but still look like a good guy.

Banks don’t force customers to break laws. No bank is going to tell Heller management that they cannot pay what is legally owed to their employees. It’s true that the banks might tell the shareholders that they – the banks – won’t lend/advance money for the shareholders to pay their obligations, but that’s very different than saying “you can’t pay them.” If the banks won’t lend/advance the money, then it’s up to the Firm and the shareholders to find another way to come up with the money to pay the employees. An LLP isn’t the absolute person protection that some like to think (just ask the Brobeck partners).

Employees work for one, many, or all partners. At least in California, wage claims can be made against not just the firm, but also or alternatively against individual partners.

3.  “Sorry, there’s no money:” Another statement that should set off the alarm bells. Of course there’s money, and lots of it. Not only are there accounts receivables, but there’s also a huge asset in the value of the business which has been, is being, and will be taken to other firms. A portion of that value is owed to Heller or, if and when it goes into dissolution, the Heller estate.

For example, though not well publicized, there’s quite a list of firms that took in former Brobeck partners and ended up paying millions to the Brobeck estate. If the bank debt is secured (and possibly backed-up to some extent with personal recourse guarantees from shareholders), so the banks stand first in line to be paid off. Still, there should be a lot of money left after the banks are paid off.

In Brobeck’s case, and keep in mind that Brobeck had run up a huge bank debt, the amount recovered after the banks were paid totals over $75 million, possibly as much as $100 million. With Heller’s reputation as financially conservative, it is most likely that bank debt is much lower than Brobeck’s was, but its receivables and the value of business taken away should be at least as high as Brobeck’s, thus the assumption that there is indeed money available.

The questions, however, are how much of that money Heller management really want to collect, and what they really want to do with it. Heller management probably won’t mind hitting up most clients for the accounts receivables, but they might very likely not want to go after other firms for the value of business taken from Heller. The Heller shareholders are out there trying to sell themselves and their books of business, trying to make the best compensation deals possible for themselves, and that’s a lot easier to do if the acquiring firm thinks it’s getting the partner(s)’s book free and clear, i.e., won’t have to pay anything to Heller for the value of the book. So it’s easy to imagine that the Heller shareholders and management will agree not to pursue recovery of money for the value of business taken to new firms—even though that money could be used to pay what’s owed employees and other unsecured creditors.

4.  “The partners are losing much more:”  At one other blog, a partner is complaining about having lost his capital. The affect of some shareholders moaning about their lost capital is to make some/many employees feel sympathetic to the shareholders or even guilty for asking to be paid. It’s as though shareholders are saying “my loss is much greater than yours, you should be glad you haven’t lost as much as me, and you certainly shouldn’t be asking me to pay for your loss.”

In my view that’s total hooey. Economic loss, and the harm caused by it, is relative. Comparison of absolute numbers is not only misleading, but also downright deceptive. On average, Heller shareholders made over $1 million a year. Despite their grumbling and their seemingly constant pursuit of ever more money, these are wealthy people. In all likelihood, the partners’ wealth and position will allow them to bear and recover their loss much easier and much faster than the average staffer can.

In the Brobeck collapse, no partners lost their homes and ended up living in shelters, but staffers did. So if you hear shareholders trying to minimize employees’ loss by comparing it to their own, then you might have to decide whether they’re doing so because they’re clueless idiots or manipulative weasels.

5.  The Nuremberg Defense: It’s not uncommon for people to have trouble accepting and acknowledging that their actions or inactions have hurt others. Most of us seem to have a need to be thought of as a good person. I wouldn’t be surprised to hear that a lot of shareholders, especially the rank and file ones, are telling themselves and whoever will listen some variation of “it’s not my fault.” Some will say they didn’t know, some will say there was nothing they could do, some will say both. And most of the employees will feel sorry for some or all shareholders, and will let them off the blame hook. What’s most important now, however, isn’t taking blame for the past, but rather taking responsibility in the present and future. Fault is a red herring. Right now it doesn’t really matter how this happened or who caused it or who knew what was going on. What does matter is that they all know what’s going on now. For however many years, they reaped the considerable benefits of partnership, of being an owner of the firm. If the ability to think of themselves, and have others think of them as a good person, then they have to accept and own up to the fact that as owners of the firm they have legal and moral responsibilities to their employees. They might not be to blame for things going sour, but if they don’t step up now to make sure all employees are treated fairly then they will be at fault.

6.  The False Heroes: This is definitely related to the last point. Some shareholders might make quite the show of patting themselves on the back for taking some employees with them to their new firms. These types act like letting a few people into their lifeboat not only discharges their responsibilities to all the employees, but more obnoxiously that they’re some kind of heroic saviors. As noted elsewhere, only those who can directly benefit the shareholder(s) are given a seat in a lifeboat. Others, especially administrative staffers, won’t get offered a seat.

The way I see it: if a hundred people get thrown into the water on your watch, pulling a half dozen into a lifeboat doesn’t make you a hero. Heroes are those who make sure no person’s left behind. And say or think what you will about Tower Snow, but he did not leave Clifford Chance until he’d made sure every employee found a new job.

* * *

I continue to believe that Heller management and shareholders will behave responsibly and honorably to their employees. I fervently hope none of the alarm bells mentioned above will ring anywhere throughout Heller. As in the past, I’ve written this hoping that it’ll prove completely unnecessary, but with the sad recognition that there’s at least some small possibility that it won’t be.

Over and out.

Heller Drone
Cruise Director

Are Some Life Perservers More Golden Than Others?

This is some serious sh*t to think about.  I just received several emails overnight from ex-Brobeckians and ex-Hellerites who a) have great concern and empathy and support for Heller Ehrman, especially the non-shareholder crowd and b) point out some important areas where we should be pressing management for more information. 

Again, this is not put out there to fan the flames, or create panic.  It is NOT the equivalent of shouting fire in a crowded movie theater.  It is more like shouting “should there be a fire, here is what may happen and how to be prepared.”   As usual, use this, any and all information so that you can be an informed participant and make sure you are among the living when all is said and done.

Will the shareholders try to hammer together and approve a new shareholder agreement when they meet – either next Tuesday or before hand?

Don’t laugh and don’t say to yourself, “they wouldn’t do that.” People at Enron and WorldCom probably said the same thing.

If they do ever agree on anything as a group, it would probably be to rewrite the shareholder agreement so that there is as little personal liability (and responsibility) on the part of the remaining shareholders as possible. That is why shareholders are leaving asap and taking their capital contributions with them, if they can.

Are there enough lifeboats?

That depends. There are lifeboats and then there are lifeboats. Keep in mind the not-to-be-unexpected behaviour above. This is called lifeboat preparation.

What does this mean to you and me as support staff? As the shareholders get into their well-stocked lifeboats and quickly row away, do you really think they will look back at us? They don’t fear becoming a pillar of salt (as if the S.S. Heller were that wicked a place . . .) but rather they are ashamed at their own lack of personal responsibility and walking the walk about support staff.

Remember the pecking order that shareholders want to enforce in terms of rescue: shareholder, associate, paralegal, then support staff. Sorry, just bein’ honest here.

And what helps you get selected? Well if you can help that shareholder get into the beachhead of that new island of refuge (meaning their new firm), they will let you on to their lifeboat, giving the appearance of being caring and honourable. This is a true episode of Survivor: Heller Ehrman if there ever were one. Which reminds me, perhaps I should call up Stacy Stillman for advice . . .

No pushing, no shoving – an orderly evacuation please! Or will it be . . .

The shareholders will do almost anything for others to think that this is not Brobeck redux. Appearances are important. But on the other side of the ship, the one out of view of the media, you could likely see this (if you were allowed to):

– the shut down of Heller as soon as possible. Quick means least expensive cost to the shareholders;

– retention of a skeleton staff and attempts to minimize the cost of unemployment and COBRA payments;

– encouragement of people to leave voluntarily. Don’t be tricked into this unless you have an offer in hand. Stay to the end. If you don’t have a pink slip you may not qualify for unemployment or COBRA.

Servicing the clients – isn’t that just servicing the shareholders?

Yes and not in a good way. To keep employees performing at whatever level they need, you will hear lots of hooey about the importance of serving and protecting clients’ interests. And because of that, many of us, given our loyalty to the S.S. Heller and our work ethic, will bust our tuchases for them rather than spending the time looking for a new job or doing whatever is needed to take care of ourselves.

Think about it. You may well seriously drown later, especially if you stick around based on vague promises of being rewarded for your efforts. Don’t be fooled. You and I know that much of the time support staff has more respect for and loyalty to clients than shareholders. Shareholders only care about their clients or rather the clients who they can take with them and make money from.

Heed what happened at Brobeck: they drank the purple kool-aid about “client service,” but the reality was that many clients were abandoned because they weren’t big enough for any of the partners to care about taking.

How could benefits and issues important to support staff be affected?

I am going to beat this dead horse until it jumps up and screams “I can walk!” I am telling you to watch out for your benefits – this is what costs Heller the most, has helped retain its strong crew, but will be the first thing yanked away and right under your eyes if possible. Here’s why:

– Don’t assume the medical plans are the same and not all medical plans are safe. Depending upon how they are set up, and with the amount of time it takes to bill for services, etc. you may be in for a shock even weeks after the ship is evacuated. One of the provider choices at Brobeck was United Health Care, which worked sort of like a trust account. Brobeck was supposed to pay the premiums into the account. When someone had medical services, their doctor would send a bill to United Health Care, and the bill would be paid out of the “trust account.” What happened, however, was near the end Brobeck stopped paying into the account, and when the bill came in from the doctors, United said, sorry, there’s no money in the account, so the doctors then sent their bills directly to the patients-employees.  If you have had recent medical treatment and are unsure how the billing/payments work, contact your doctor and get the bill submitted pronto.

– Drugs? “Why yes, please! And keep ’em coming!”  Seriously though, if you have a standing prescription like allergy medicines, cholesterol statins, etc. go get them this weekend whether you have FSA money or not. Take advantage of the low prescription prices as part of your benefits that you’ve worked hard for. If you can swing it, stock up like you are one of Sarah Palin’s kids getting ready for the weekend.

– Same goes for medical procedures. Don’t put off what you need done but make sure it is covered and gets reimbursed quickly. Note to self: schedule face lift in Acapulco this weekend but don’t bring Joyce Wildenstein this time.

– I know I’ve been reassured about the 401k but think about how important this is to you and you’d be justified in being worried.  The 401K problem at Brobeck came about because – unknown to the support staff – Brobeck had stopped paying the fees to the bank that administered the fund nearly a year before the closure announcement. So, when the closure announcement came – and lots of employees were depending on their 401k funds to get through, the bank froze all the accounts because of the unpaid fees. It took months to unravel and unfreeze the accounts, and Brobeck staffers ended up having to pay the owed fees to get their money out.

We really need some definitive proof on this – even if it means calling up Vanguard or the other plan administrators.

* * *

That’s enough to make you sea sick isn’t it?  Well keep it together and wander over the the Lido Deck where Isaac is serving up a 333 Bush Street Martini Lunch special.

And come on guys, please comment on this.  Good or bad.  We’re beginning to hear voices in our heads and nasty visions of Shelley Winters as Belle Rosen saying, “In the water, I’m a skinny lady.”  How about a contest where the one who comes up with the most inspired name for a cocktail, can be the first one to push Fram & Company’s lifeboat off the deck?

Over and out.

Heller Drone.  “That’s D R O N E not D R O W N”

Where Do I Get A Lifeboat?

Quite frankly brother/sister – you’ll have to make your own. Don’t expect management to provide them. Don’t expect there to be a seat for you and yours.

But don’t despair. That’s why this site is here. We’ll all help you create a lifeboat. I’ve already had to do it once before when I was at Brobeck. And that experience has taught me the questions to ask, what doesn’t smell right when everyone tells me it smells like honeysuckle, and how to make management hold up their end of their commitment. It is very well and nice to say in all your marketing materials about the great work environment and how everyone is “like family” but until something like this happens, I expect that family to be the Mansons or the Borgias.

Here’s how you can contribute and how you can get help – it’s a two way street:

– if you have ANY job leads, even ones not in your field, even ones not involving law firms, please submit them using the email link listed in the Contact Us section;

– don’t let anyone tell you it is disloyal or disrespectful to speak up about what is happening at Heller Ehrman – this is the same mentality that questions a person’s patriotism because they exercise their freedom of speech and question the practices of their government;

– keep checking in here for developments with what we hope to be reliable information, not idle gossip or sleazy blog attacks.


Life preserver.jpg
Remember the words of Rev. Frank Scott (Gene Hackman in The Poseidon Adventure):

". . . sitting on our butts is not going to help us either. Maybe by climbing out of here, we can save ourselves. If you've got any sense, you'll come along with us."

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Heller Highwater (hellerdrone.wordpress.com)
Last Modified: September 14, 2008

- Don't be a dill weed.

- Treat other people the way you want to be treated.

- Ladies and children first.

- This is a rescue, not a bitch session.

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Heller Highwater is not:

- a place to practice viscious and vindictive "whisper down the lane" rumour-mongering;

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- a place for diatribes against specific people or specific incidents;

- a place to heap pity on poor Heller Ehrman staff by outsiders;

- a place that discriminates or sets margins noting who is outside and who is inside - we even welcome supportive Heller Ehrman attorneys!;

- meant to further the demise of Heller Ehrman, LLP.

Heller Highwater is:

- a place for support, a place of empowerment, a place of passion;

- a place to learn about job leads, resume preparation, skill building, training, new opportunities, and how to succeed in a new workplace;

- a place to keep up on the latest news as to how Heller Ehrman management intends to treat its support staff as it winds down its operations - will it be every woman for herself? or will it be "let me hold the door for you and is there anything else I can do for you"?

- a place of refuge.

Note: in no way, shape or form is Heller Highwater sanctioned, supported or even recognized, (but it is very likely monitored) by the management of Heller Erhman, LLP. The opinions represented here and on each and every page of Heller Highwater do not constitute the opinions of Heller Ehrman, LLP or its shareholders or its management. In addition, the comments left by visitors do not reflect the opinions of Heller Highwater.