Continuing to Downsize, Patton Boggs Shutters New Jersey Office

, Legal Times

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Patton Boggs' Ed Newberry
Patton Boggs' Ed Newberry

Patton Boggs will close its Newark office after the firm lost almost $12 million there last year after insurance work arising from the Sept. 11 attacks dried up, according to Edward Newberry, Patton Boggs' managing partner.

Newberry said in an interview with The National Law Journal Monday that the firm announced the closure to partners at a monthly meeting on Feb 20. The closure of the New Jersey office was first reported by POLITICO on Monday.

Newberry, who is based in in the firm’s home office in Washington, said the move to shut down the Newark office was part of planned restructuring, rolled out over the past year, and not because of any bigger financial woes at the firm. He also attributed ongoing restructuring since last year to stagnated growth in the legal industry.

"Literally, I don't think there was anyone that was surprised" in the New Jersey office, Newberry said. "It was precisely according to the plan we laid out last July."

The New Jersey managing partner of Patton Boggs, John McGahren, left the firm in August — seven years after starting the Newark office. His departure came amid a downsizing in Newark from 80 lawyers early last year to less than 50 by the fall, according to the New Jersey Law Journal.

About 10 to 12 of the 25 employees in the Newark office will move to Patton Boggs’ New York location, while five will stay in New Jersey, he said. The rest will be laid off. The firm has nine partners, 10 associates, five of counsel and two senior paralegals working in New Jersey, according to its website as of Monday.

"These are cuts that should have happened a long time ago," said one Patton Boggs partner.

At its peak, the New Jersey office handled $50 million of business for the firm from the World Trade Center Captive Insurance Company — about one-seventh or more of Patton Boggs' total revenue of about $335 million in 2010, Newberry said. The account worked with thousands of tort cases involving payments after the Sept. 11, 2001, terrorist attacks.

The case settled around 2010, Newberry said, taking with it millions of dollars in revenue. The New Jersey business crumpled in two phases, he said, from $50 million to less than half that in 2012, then further plummeted in 2013 from $20 million to $1.8 million in revenue, Newberry said.

"It took time to wind down," he said. "We still had the big office there."

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