Office after office sits vacant, desks bare. Packing boxes clutter the thickly carpeted hallways. The atmosphere of quiet is not the normal hush of a blue-chip law firm, but the unnatural silence of a firm that is dying.
Bergson, Borkland, Margolis & Adler is dissolving effective April 30, a casualty of the harsh economic and political realities of practicing law in Washington in the 1980s. It is a climate in which some firms have suffered, some have prospered and some have rebounded after lean times, but nearly all have changed to some degree the style and substance of their practices.
In the 1970s, Bergson Borkland was thriving. One of the city's premier "boutique" antitrust firms, it had tripled in size in 10 years, from 13 lawyers in 1970 to 40 by 1980. It boasted an enviable roster of Fortune 500 clients and two floors of plush Dupont Circle offices. Young lawyers interested in specializing in antitrust litigation and reluctant to let themselves be swallowed into a giant firm gravitated to Bergson Borkland.
"It was a very high quality firm with exceptionally well-qualified lawyers," said Georgetown Law Center Dean Robert Pitofsky, a former member of the Federal Trade Commission. "Bergson Borkland was one of the classic midrange firms that people found quite attractive."
The demise of Bergson Borkland -- which had about 20 lawyers at the time of its decision to disband -- is not traceable to a single, catastrophic event. Rather, the firm's death stems from a variety of ills, some that were specific to Bergson Borkland, many that afflicted a number of other firms in town.
Antitrust work, like many other regulatory specialties, plummeted under the Reagan administration. Bergson Borkland did not try soon enough to diversify into other areas of law, and it had a difficult time when it tried to retool. Once it did so successfully in the environmental area, it fell victim to job-hopping by law firm partners when its chief environmental lawyer left to join another firm.
Out-of-town firms that once referred clients to Bergson Borkland opened Washington branches. There was sheer bad luck, such as the loss, after 30 years, of a major client that merged into another corporation and decided to switch to the parent company's law firm. And, like a sick patient who develops complication after complication, Bergson Borkland was unable to extricate itself from the downward spiral -- a momentum that contributed to the collapse.
"I'm angry at a profession that has become so cutthroat that there is no longer a place for a firm of the quality and character of Bergson Borkland," said Robert L. Wald of Wald, Harkrader & Ross, a firm that has had its own struggles to survive in the current legal marketplace.
Bergson Borkland was founded in 1950 by Herbert A. Bergson, who headed the Justice Department's antitrust division under President Truman, and by Herbert Borkland, also an antitrust lawyer. Bergson, the guiding spirit of the firm, was a man who "felt very strongly that antitrust was the only kind of law a gentleman would practice," said Angus Macbeth, a former partner.
Six years later, they were joined by Howard Adler Jr., a former Justice Department lawyer and clerk to D.C. Circuit Judge David L. Bazelon, and by Daniel H. Margolis, a Harvard Law School graduate who also had worked in the antitrust division.
For years, Bergson's vision of a specialty antitrust firm flourished.
"In the '70s we were busier than hell," Margolis recalled. "Our existing clients and new clients were getting sued. They needed advice on what they could do and shouldn't do."
Much of the firm's growth during that period was fueled by a few large, complex and labor-intensive cases, particularly the government's antitrust suit against the three major television networks, in which Bergson Borkland represented ABC. At one stage, 13 of the firm's 45 lawyers were handling ABC-related work, said Margolis, the network's chief lawyer at the firm.
The dynamic of large cases that demanded a large number of lawyers to staff led inevitably to growth. "You don't have any choice but to grow . . . " Adler said. "You don't want to turn away work, and you have strong pressures from the young people to get bigger."
At one stage, Margolis said, Bergson Borkland had more antitrust lawyers than Cravath, Swaine & Moore, the prestigious New York law firm that handled the mammoth International Business Machines Corp. antitrust case.
"It wouldn't take any genius to figure out that if we were as large as the largest firm that was doing this, you didn't want to put all your eggs in one basket," Margolis said.
While the firm always did a minor amount of other corporate work for clients, the concept of broad diversification met with some resistance from Bergson, who died in 1977. "He had a different view of practicing law," Margolis said. "He was a specialist. He never wanted the world's largest law firm." Borkland died in 1969.
"Maybe we were too slow in diversifying," Adler conceded. "You could say that our success all through the '70s meant we were so preoccupied and busy doing our work that we did not adequately deal with the structure of the firm."
Then the Reagan administration took over and all but stopped bringing the antitrust cases that were the firm's bread and butter.
"They reshaped antitrust policy in this country," Margolis said. "We lost cases in the Supreme Court in the 1960s that would never have been brought by the department now."
The revolution in antitrust law "had not been foreseen," Adler said. "When other Republican administrations came, there had probably been an increase in antitrust."
At the same time, the proliferation of branch offices here started to take its toll. "The increase in the number of firms who feel they can do antitrust was at least as important as the slackening of enforcement," Adler said.
The antitrust suit against ABC was settled in the fall of 1980, freeing a dozen lawyers. Cases for Crown Central Petroleum Corp., Hammermill Paper Co. and AMF Inc. also wound down about that time. "There was nothing else in the pipeline" to replace them, Margolis said.
Meanwhile, during the boom years of the 1970s, the firm had elevated a number of lawyers to partnerships without regard to their abilities to bring in business. Seven lawyers made partner in 1978 alone.
"They were great in every sense except that they didn't have any clients," Margolis said. The firm found itself with a 1-to-1 ratio of partners to associates, an unhealthy balance in a business in which the bulk of the profit is made through associates, who are generally paid one-third to one-fourth the revenues they generate.
The bottom line, Margolis said, was that "unfortunately, we just had too many mouths to feed."
In 1982, Bergson Borkland took the drastic step of cutting itself in half. Some partners chose to leave. Others, seeing the terms on which those partners were bought out, volunteered to depart with the same economic arrangements, Margolis said. A few were squeezed out.
The remaining partners agreed to take equal pay temporarily. The stipend, one former partner said, was "considerably less" than $100,000 -- far below the average income for a partner in a Washington firm.
"There was a good deal of strain right at that time, a good deal of tension between younger partners and older partners," one former partner said.
With their future at the firm looking bleak, "the associates fled," Margolis said. "We tried to hold onto them but . . . institutionally it becomes demoralizing."
By 1983 the firm was left with 15 partners and a single associate, who was then made a partner. Bergson Borkland started the long, frustrating process of trying to rebuild.
The firm's attempts at diversification were slow to pay off. Two environmental lawyers had joined the firm in April 1981 from government posts -- Angus Macbeth, a deputy assistant attorney general in the Justice Department, and Jeffrey G. Miller, acting assistant administrator for enforcement at the Environmental Protection Agency.
But environmental law was a fallow field in the first few years of the Reagan administration, and, as former top enforcement officials, Macbeth and Miller were barred by revolving-door regulations from working on many of the existing cases.
"We kept busy, but we didn't bring in a lot," recalled Miller, who spent half his time representing towns or citizens groups for free and hoping to have the court award him fees if he won the case. The firm's existing clients, he said, "did not produce a significant amount of environmental work. Most corporations have existing ties . . . . If they want to try somebody else out, they'll wait until something new comes along -- and not that much new was coming along in those years."
An energy lawyer, Julia Richardson, joined Bergson Borkland in 1980 from the D.C. office of a Columbus, Ohio, firm, seeing the move as a chance "to go to a quality firm and develop an energy practice."
Although Richardson did some energy work for existing clients, she was "frustrated by her inability to attract clients" on her own, Margolis said. In 1985, when energy work had grown to about 10 percent of the firm's billings, Richardson decided that the firm might be more successful if it had a larger cadre of energy lawyers, Margolis said.
She started "going out lunching to find four or five energy lawyers to merge with," Margolis said. "Instead, she ended up getting wooed away." Richardson, who joined Verner, Liipfert, Bernhard & McPherson here as a partner and took a Bergson Borkland associate with her, declined to comment on the reasons for her departure.
The firm tried to find merger candidates and to bring in partners from outside in such areas as international trade and taxation, growing fields that would have melded nicely with Bergson Borkland's expertise. Although there were several nibbles, Adler said, "We came in second bidding . . . . There were a lot of frustrations as we tried to attract the people that we wanted."
Despite those difficulties, the firm started to make a comeback. The trade publication Legal Times reported in June 1983 that Bergson Borkland, "hard hit by regulatory cutbacks, seems to be recouping." That year, Macbeth landed a major client, Waste Management Inc., the country's largest waste disposal company, and billings in the environmental area grew to one-third of the firm's practice by 1985, according to Margolis. The firm took on a large piece of litigation with the Federal Communications Commission involving radio beepers. Last fall, it managed for the first time in years to hire an associate straight from law school.
"It did work for a while," Margolis said.
Then the firm was hit with a double whammy.
First, it learned last fall that it would lose ABC, once its largest client, in a merger with Capital Cities Communications Inc. that was consummated Jan. 3. The surviving entity, Capital Cities/ABC Inc., opted to retain Capital Cities' longtime law firm, Wilmer, Cutler & Pickering of Washington, over Bergson Borkland.
Second, Macbeth -- whose environmental work had become so important to the firm that Margolis and Adler offered to make him a name partner -- announced his departure for the D.C. office of Sidley & Austin, a major Chicago firm. Macbeth took an associate with him, and environmental lawyer Miller later left for Verner Liipfert.
"The first two years they were here there was a lot of wailing and moaning about whether we'd done the right thing," Margolis said, referring to Macbeth and Miller. "We carried them for two years, they were good lawyers and they worked on other matters. Eventually, lightning struck. The diversification was beginning to work . . . .
"The notion of loyalty to firms . . . has been undermined a great deal," Margolis said, with more sadness than anger. "It's kind of like everybody says, 'My practice is my practice and not the firm's practice.' "
Macbeth said he decided to accept the offer from Sidley & Austin because "basically we hadn't been able to restructure in a way to make me feel sufficiently secure." Although "the environmental business was growing," he said, "if we'd ended up in four or five years with 10 to 12 lawyers doing environmental work, you'd get worried that if something happened to environmental work, which is perfectly possible, what the hell are you going to do?"
On Jan. 8, one month after Macbeth sent around a letter announcing his departure, Bergson Borkland's 14 remaining partners gathered in a conference room to debate the firm's future.
Margolis told the others that he was willing to stay, but only if each of his partners promised not to desert the firm. When "a few who made a difference gave sufficiently equivocal answers, then it was pretty clear that we perhaps had better all look to our own needs," he said.
The meeting, Margolis said, was "quiet and sad." The partnership vote was unanimous, except for Margolis' abstention.
Miller was one of those who said he could not promise to stay. "I said, 'I have been talking to other people and I intend to continue to,' " he recalled. "Environmental law is a specialty and . . . I did not relish being off by myself with people who, although I liked them and respected their legal abilities, weren't really any help to me in my practice."
Lawyers at the firm these days are spending most of their time arranging their futures. The task, some headhunters said, is not easy in an era when antitrust lawyers are not in high demand. "The particular specialty they have is abundant in this town," said Susan Schneider, a partner in a legal search firm here. "They pound the pavements. They move. They'll get jobs; it just is hard."
Some have already found positions. Margolis, 60, and partners James H. Kelley and Larry D. Sharp are joining the four-lawyer D.C. office of McGuire, Woods & Battle, a large Richmond firm. James R. Loftis III is heading to Collier, Shannon, Rill & Scott here. Barry R. Goldsmith is going to the Securities and Exchange Commission. Miller left for Verner Liipfert last month.
Adler, 61, said he is still having discussions but is looking this time around for a larger firm. "If you can't beat 'em," he said, "join 'em. Right?"