Firm Forecloses on Non-Equity Partner’s Office

Mitchell Zypress, a well-rested, non-equity partner at Kirkland & Ellis LLP, came to the office last Monday around 10 in the morning with a grande, half-caff soy latte in hand and an empty agenda waiting for him. As is the case with most transactional lawyers in this economic downturn, Zypress hasn't worked a full day in months. Unfortunately, when he arrived at his 14th floor corner office with picturesque view of Chicago's Lake Shore Drive, he came face to face with the realization that his lack of productivity had finally caught the firm ‘s attention. A packet of documents with a pink “Firm Foreclosure” cover page was tacked to his office door like a scarlet letter.

As Zypress reviewed the packet, the color started to drain from his face. The unthinkable had happened; the firm had instituted foreclosure proceedings on his office. The notice stated that while he was welcome to continue practicing with Kirkland & Ellis, the firm just could no longer continue to provide him with an office. The foreclosure documents stated that Kirkland had lent significant money to Zypress in the form of nine years of salary and that he had defaulted on his obligation to provide the firm with either an influx of paying clients as a “rainmaking” partner or a minimum of 2500 billable hours during the past calendar year as a “workhorse” partner.

Zypress was relieved to learn that he would be afforded a cure period during which he would have a chance to work out this defaulted office loan with his lender and employer, Kirkland & Ellis. Unfortunately the acceleration clause in the foreclosure notice was none too kind. In order to cure the default and avoid being left office-less, Zypress would have exactly 90 days to either record the 1400 billable hours he was short last year or to bring in a dozen new clients to the firm.

Realizing that he would certainly not be able to cure in time, Zypress decided that he would avoid the embarrassment of being dragged from his desk by the Office Services department. He emptied out his office and proceeded to set up a temporary shop in the firm cafeteria. As soon as he was relocated, he then sent his colleagues an email stating that he had “taken one for the team in this economy” and was planning to lend his office space to the recently unemployed CEO of the firm’s client, Merrill Lynch. Needless to say, Zypress still tries to go out for lunch as much as possible.