Stroock Departures Intensify as 27 Lawyers Decamp to Steptoe

Steptoe & Johnson is picking up a 35-person team, including 27 lawyers, from Stroock & Stroock & Lavan, a storied Wall Street firm struggling with a slew of recent partner defections.

Confidence in firm leadership at Stroock is an issue and losing this team to Steptoe might be the piece that destabilizes the firm, said a source familiar with the matter.

Julia Strickland, managing partner of Stroock’s Los Angeles office and head of its national financial services litigation, regulation and enforcement group, is joining the Washington-based Steptoe, along with three other partners in Los Angeles and New York.

Steptoe is also adding Michele Jacobson, chair of Stroock’s general litigation practice and co-chair of its insurance and reinsurance group as well as Robert Lewin in New York. Several lawyers are also joining Steptoe in its Chicago office.

These departures are just the latest for Stroock, which earlier this month walked away from merger talks with Nixon Peabody.

Stroock has for months been exploring a possible merger with several law firms, including Steptoe as well as McGuireWoods and Squire Patton Boggs, as its partner departures mount.

“Our talks with other firms continue, we are making good progress and we are excited about the opportunities they present,” Stroock said in a statement.

A Run on Partnership

Stroock has been searching for a merger partner since more than 40 of its restructuring lawyers left for Paul Hastings last year. Since then, the firm has lost more than 20 partners, according to Leopard Solutions data.

Law firms are fairly delicate structures and once partner departures begin, it can be hard to stop them. If past defections are any indicator, it could spell disaster for a firm. More than 70 partners had left LeClairRyan in the year prior to its bankruptcy filing in late 2019. Sedgwick lost more than 30 partners before it dissolved in January 2018. Dewey & LeBoeuf lost roughly 200 partners before it imploded in May 2012.

As partners depart, firm funds and confidence in its leadership disappear. At some point in the departure cycle, law firms may breach loan covenants, eventually triggering the dissolution of the firm.

Stroock maintains that “our higher rate and most profitable practices remain intact and continue to serve clients at the highest level,” the firm said in a statement.