Powell Trachtman Winding Down as Shareholders Move On

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Photo: Shutterstock[/caption] After 30 years in business, King of Prussia-based firm Powell Trachtman is winding down, as one group of attorneys, including the firm's last remaining founding shareholder, prepares to join Wisler Pearlstine, and another group strikes out on its own with a new firm. Powell Trachtman co-founder Michael Trachtman, along with fellow shareholders David Burkholder and Mary Pedersen, announced this week that they're joining Wisler Pearlstine in Blue Bell to form a new venture called the Wisler Business and Entrepreneurship Center, which will focus on providing legal services to midmarket and small companies. Meanwhile, another group of Powell Trachtman attorneys—shareholders Frederick Brehm, Frank Nofer and Michael McCarter, along with associate Michael Zettlemoyer—announced the formation of a new firm called Brehm Nofer & McCarter, which will focus on representing design professionals in insurance defense and products liability matters. All four attorneys are shareholders in the new Conshohocken-based firm and, according to Zettlemoyer and Brehm, there are plans to bring on several more Powell Trachtman attorneys in the coming weeks. These latest moves come on the heels of the departures of shareholders Gunther Carrle and Paul Logan at the start of the year. Logan left to join Post & Schell as a principal in its construction practice and Carrle went in-house at engineering consulting firm McCormick Taylor. Both were name shareholders of the firm, which was known as Powell, Trachtman, Logan, Carrle & Lombardo, and Logan was a co-founder. Logan's departure left Trachtman as both the sole remaining co-founder and the sole remaining name shareholder. Powell Trachtman co-founder Ralph B. Powell Jr. retired from the firm several years ago and has since passed away, and former name shareholder Bruce Lombardo was most recently of counsel to the firm. Trachtman said his decision to move on from the firm "was really a product of the fact that, as things evolved toward the end of 2017, I was the last standing founder and all of my colleagues that I worked with 30 years ago to found this firm have moved on, either ... by retirement or semi-retirement or death or going in-house or that sort of thing." "Having been the last standing founder, I had an opportunity to take a fresh look," Trachtman said, but was quick to note that none of the departures, including his own, were the result of any internal disputes among the remaining shareholders. Instead, it was a more natural evolution, he said. Trachtman said the firm, which had about 25 attorneys prior to the most recent departures, has long comprised two main complementary practices: a commercial practice, which Trachtman oversaw and which was aimed at representing businesses in all aspects of their operations, and a litigation practice geared toward representing professionals in the design and construction industries. Powell Trachtman "was an interesting business concept for a lot of decades," Trachtman said, calling the firm's practice split "a 2+2=5 arrangement," but adding that "it ran its course somewhat. ... The glue that kept it together and made it the business it’s been has evolved to something else on all sides." With regard to his own decision to leave the firm he helped build, Trachtman explained that it's long been his desire to create a multidisciplinary practice aimed at assisting small and midmarket entrepreneurs that don't have in-house legal departments and aren't in a position to pay Big Law rates. "What happened is that I’ve had a dream and it would take the commitment of another larger law firm to make that dream come true," he said, adding that Wisler Pearlstine, which has about 35 lawyers, expressed such commitment. As for where the remaining Powell Trachtman lawyers will land when all is said and done, Trachtman said he believes "everybody’s pretty much getting subsumed in what we’re all doing," noting that the firm has always consisted of shareholders and associates who assist those shareholders, so those working relationships are likely to continue as the shareholders find new homes. "I don’t anticipate too many lawyers on the street, if any," he said. Trachtman said he anticipates the wind-down process will go smoothly as well. "There are no disputes among the shareholders, no conflicts over clients or files ... no sniff at all of any conflict between us," he said. Trachtman said the shareholders are "committed to an organized wind-down" that will serve the best interests of its clients and staff. "We’re also committed to taking care of all our employees in as generous a way as one could hope," he said, adding, "We have both the commitment and the resources."

Success Without Succession?

Indeed, there does not seem to be any dispute among the departing attorneys that Powell Trachtman was and is financially healthy. Regardless, however, there is still some disagreement over what the firm's prospects for the future would have been had Trachtman not made the decision to move on from the firm. Brehm said the firm was not well-equipped to outlast its founders and name shareholders—a key reason why he and his Brehm Nofer co-founders sought to ensure the new firm was well balanced between younger attorneys like Zettlemoyer and McCarter and more senior lawyers like Brehm and Nofer. "One of the problems we faced [at Powell Trachtman] was there never was a succession plan," Brehm said. "When everyone decided they were pretty much done with their careers, there really was no one to hand over what was otherwise a very viable firm. It’s a shame." But Trachtman took issue with that notion, saying there was always an option for younger attorneys at the firm to move into leadership vacancies left by senior lawyers. "You don’t need a succession plan, you need people who wish to assume a leadership role," he said, but added that his decision to leave effectively ended the entity known as Powell Trachtman anyway, so there was no choice in this scenario but to break up the firm. Still, Trachtman stressed that he decided to join Wisler Pearlstine because of the opportunity that firm presented him with and not because of any problems at Powell Trachtman. "There was nothing to run from, but a lot to run toward," he said.

New Ventures

Both Trachtman and the Brehm Nofer & McCarter group spoke with enthusiasm about now being able to take a fresh approach to their practices. Brehm said he and his group relished the opportunity to build the new firm's technological infrastructure from the ground up. "When you start from scratch, while it’s certainly a daunting task, you have an opportunity to set it up the way you want to set it up," Brehm said. "This is certainly a more streamlined operation. So much technology is now cloud-based, it gives you this ability to run your practice remotely. We're going to be able to work from wherever we’re at, whether it's at home or on the road, which will make each of us a sharper, better attorney." "It’s certainly true that one thing we discussed over and over here was: efficiency, efficiency, efficiency," Zettlemoyer added, noting that he and his partners recognize that clients are increasingly savvy consumers of legal services. The firm was also forward-thinking about its office space. Zettlemoyer said the firm's lease at Eight Tower Bridge in Conshohocken will allow it to expand its operations as needed. Brehm added that the firm intentionally chose a location near the Conshohocken train station so that its offices would be easily accessible to its attorneys, some of whom live in Center City and others who live in the suburbs, as well as its clients. He said he and his group are bringing every single one of their clients—about 150—with them to the new firm. Brehm said he anticipates the accessibility of the new office will also serve as a recruitment tool as the firm continues to grow. While the Brehm Nofer group builds a brand new firm, Trachtman will leverage the resources of 75-year-old Wisler Pearlstine to establish what he describes as "a law firm within a law firm." Trachtman envisions the Wisler Business and Entrepreneurship Center, set to launch in June, as "the go-to place in Montgomery County" for midmarket and small companies. Trachtman said most of those companies don't have in-house counsel, which he likened to "a medical patient left to diagnose themselves." The Wisler Business and Entrepreneurship Center, he said, will seek to remedy that problem by providing each client with a multidisciplinary practice that covers all of the client's business needs ("sort of like a primary care doctor"), a point of contact at the firm with deep knowledge of the client's business, a centralized documentation system that contains all of the historical data on the client for easy reference ("like a patient's medical records") and a resource center where companies can keep abreast of developments in the law and business climate that might affect them. "I've wanted to put it together for a long time," he said, noting that while he feels he's done a "fairly decent job" of making Powell Trachtman an attractive firm for midsize and small businesses, Wisler Pearlstine possesses "greater scope and scale and real institutional will to make it happen." So far, Trachtman said his clients have reacted positively to the concept. "They essentially say, 'Where have you been all my life?'"