Two New Practices Emerge from Law Firm Closure

Legal heads turned when partner Peter Boyles announced in June that he and the 16 other attorneys in the Traverse City office of Smith Haughey Rice & Roegge (SHRR) were leaving to start their own firm.

Although the deal had not been finalized at the time, Boyles said rumors about the separation were starting to circulate, so he decided to announce the new firm, to be called Parker Adams Harvey & Judson, PLC.

But then the pending separation took several unanticipated twists.

One of SHRR’s most senior Traverse City partners, Charles Judson, died in July. It also became unclear whether several other lawyers would continue Boyles’ new firm. The Traverse City partners then began wondering if it made sense for them to split off into one firm, or separate into two practices.

“As Grand Rapids patiently worked through the options with us, things were changing,” said Boyles, a trial lawyer who worked for SHRR almost 21 years. “It looked like it wouldn’t work financially. This is a big ship to turn and that became daunting as well. We decided that it would be easier to work with two smaller groups.”

A deal was struck to create two new law firms that would start business August 1. Boyles became the managing partner of Parker Harvey, a nine-attorney firm that includes two of counsel lawyers.

Former SHRR attorney Janis Adams is the managing
partner of the second firm, Danbrook Adams Raymond, which has three attorneys.

Three SHRR lawyers in the Traverse City office either retired or are not currently practicing law. A fourth moved to another firm.

SHRR, based in Grand Rapids, was the largest law firm in Traverse City according to a 2015 report in this publication. The Michigan law firm has 60 lawyers with offices in Ann Arbor, Grand Rapids, Holland, and Muskegon and provides legal services and counsel in more than 30 practices areas.
Leaders of the three firms say the split was civil, while acknowledging that it involved intense, complex negotiations, which started in January.

“It was amicable all the way around,” Adams said. “But it was difficult to do from a process standpoint for an office that had been here for over 25 years. All options were considered and respectfully discussed.”

William Jack, SHRR’s chief executive officer, agreed.

“Given the quality of the people in Traverse City and Grand Rapids, I don’t think it could have gone more smoothly,” Jack said. “That’s a testament to the members of the firm.”

SHRR will continue to do some litigation work in Traverse City but will no longer have an office presence there, he said.

“It’s bittersweet for me individually,” said Jack about his former Traverse City colleagues. “It was absolutely the right thing to do, but they’ve been a part of me for 25 years.”

Leaders of the three firms declined to discuss various financial details of the separation, including revenues generated by the Traverse City office. Adams said 95 percent of SHRR’s Traverse City clients moved to the new firms.

The Grand Rapids home office will feel the effects financially, said Jack.

“It will have a revenue impact on our firm,” he said. “But I’m optimistic we’ll be just fine.”
Parker Harvey is planning to move to the PNC Bank building on Garfield Avenue. Dan brook Adams Raymond’s offices are located in the Lake Michigan Credit Union building on Front Street in Traverse City.

Boyles said the seeds of separation were planted in 2015 when the firm undertook a strategic planning exercise.

“We did an analysis of the state of the firm,” said Boyles, who was on its board of directors at the time.

“Looking at the financials, we began to question the benefit of a Grand Rapids firm having a Traverse City office. It’s expensive to have satellite offices. You lose some of the efficiencies.”

The Traverse City office also had a different practice mix than the rest of the firm. The local office was more a full-service firm while SHRR was “litigation heavy,” Boyles said.

“We had been trying for years to diversify in Grand Rapids and become more of a full-service law firm. But it was difficult to attract and retain attorneys who were not litigators,” he said. “We [in Traverse City] came to the realization that it made sense to focus on what we do best. We started thinking, ‘Is there a way to unwind this in a way that can work?’ ”

Jack said SHRR had become more of a statewide firm, while lawyers in the Traverse City office were focused on regional clients. And he agreed with Boyles that the Traverse City office had a different mix of legal services than the rest of the firm.

“We had specializations that didn’t exist anywhere in [SHRR,]” he said. “We tended to have more individual clients in things such as estate planning, probate and real estate, and not as many middle-market business clients as Grand Rapids.”

One of those specialties was employment law practiced by Adams, who decided to continue that in her own firm. Her new firm also offers several other specialties, including liquor licensing, and wealth preservation and succession.

“The situation soon crystalized for each of us,” Adams said. “We decided to become two firms focusing on different practice areas. We intend to have an amicable relationship between the firms and will have referral arrangements with each other.”

Like any separation or corporate restructuring, the lawyers and support staff worked through months of uncertainty as the split from SHRR was being negotiated.

“We had people who were here for 27 years and there was cause for them to be uncomfortable,” Boyles said. “But people stayed cool and kept their heads as they worked through multiple issues.”

Four support staffers were laid off in the separation and were given severance packages, he said.
Jack said SHRR and the two new Traverse City firms will refer cases to each other in the future.

“The people in Traverse City are first class,” he said. “We wish them the very best.”

 

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