Further to yesterday's ALB report, US-based law firm Thelen has told its partners it is looking to close its doors by December 1st. Thelen’s demise follows the firm’s failed merger talks, Pillsbury Winthrop’s raids on its China office and a number of high level hires from the firm’s “crown jewel” construction litigation team in the US.

A management council met yesterday to recommend the closure to its full partnership, who have a week to vote on the final outcome. The firm confirmed that recessionary pressures and hefty partner losses contributed to the recommendation.

"The decision to dissolve the firm was precipitated by several economic factors, including recessionary pressures and numerous partner departures over the past year, both of which have negatively impacted firm revenues," read a statement released by the firm.

The firm admitted that the hefty partner losses over the last year breached an agreement with its bank, which now controls the firm's expenditures: "The firm is in default of its primary credit agreement, having breached a partner departure covenant that restricts the number of partners who may depart the firm within any twelve-month period."

The 84-year-old firm has been involved in unsuccessful merger talks in the last year in a bid to save the firm from its financial woes.

"Unfortunately, the most promising merger opportunity was derailed by conflicts, and all other full-firm merger discussions terminated last week," the statement read.

An administrative committee comprising three partners will work with the bank in the winding up process. The firm will pay employee salaries and vacation pay through to the end of November, but will not pay accrued vacation pay.