The historic Philadelphia law firm, Schnader Harrison Segal & Lewis, which had been operating for nearly a century before it announced its closure in August, has been hit with a lawsuit from a former non-equity partner. The firm, which used to rank at number 358 on the NLJ 500, listed only 88 attorneys on its website when it disclosed dissolution plans.
Jo Bennett, the ex-partner, has instigated a class-action lawsuit against Schnader Harrison, alleging that the firm utilized pension contributions to pay equity partners and maintain the firm’s operations, effectively harming other employees. Bennett is pursuing this legal action on behalf of all participants and beneficiaries of the firm’s retirement and savings plan, which number in the hundreds. These allegations suggest violations under the federal Employee Retirement Income Security Act.
For more details about the case, visit this Reuters report.
The lawsuit alleges that in 2022 and 2023, Schnader Harrison mishandled employee contributions to the pension plan and mingled the withheld employee contributions with the firm’s general assets. It is held in the complaint that these employee contributions were exploited to finance the law firm’s operations and to dispense payment distributions to equity partners, as the firm staggered.
“At the same time as the equity partners proceeded to pay themselves, the firm was struggling to meet its other financial obligations,” according to Bennett’s lawsuit.
Bennett had served as a partner at the firm for seven years. One of her lawyers in this case, Adam Garner, informed Reuters that his client’s suit raises significant questions about fiduciary misconduct committed against the once distinguished firm.
If the allegations are proven true, they will seriously damage Schnader Harrison’s reputation, which legal insiders had formerly referred to as a “Philadelphia institution” before its downfall.
To learn more about the case, you can read the full report on Reuters.
Obviously, this news piece is a stark reminder of the impacts of financial mismanagement in a law firm setting. For more on this topic, you may find it interesting to read about a similar situation where another ‘historic’ midsize firm decided to close its doors for good by visiting this article.