Once mighty Andersen, caught between a rock and a hard place following a federal indictment on obstruction of justice charges, spurned as a merger partner by fellow Big Five accounting firms and unsuccessful in its gambit to pay off potential litigants, looks headed toward bankruptcy court.

It's a precipitous and painful fall from grace for one of the most respected names in the accounting business. But history does hold some lessons for Andersen, which may prove helpful as the firm ponders which road to take next.

Back in 1990, the seventh largest accounting firm, Laventhol & Horwath, was forced into bankruptcy following a crush of malpractice lawsuits that some say totaled nearly $1 billion.

A former Laventhol partner who spoke to a University of Pennsylvania business school journal said the fact that the firm was organized as a partnership meant that each partner was responsible for the firm's debts.

Ultimately, each partner was mandated by a court settlement to contribute nearly $100,000 to the debt pot. The silver lining was that after turning over the cash, the partners were free to pursue business with their former clients.

And since Andersen is organized as a limited liability partnership, partners who were not directly involved with the Enron audit may be further protected if the firm does file for bankruptcy.

So while it will be a bitter pill for Andersen to swallow, a bankruptcy will enable the firm's employees to head off in another direction with more than just the coats on their backs.

The trickle of companies firing Andersen as its auditor over the past few weeks will likely turn to a flood now, and most experts agree that once an accounting firm loses its reputation for integrity, its days are likely numbered.

If Andersen ceases to exist, partners and principals in the firm will probably not find it too difficult to find work elsewhere - in other Big Five firms, or in the private sector. While the public and the Justice Department may be clamoring for blood, those in the accounting industry - even those angered by Andersen's apparent misdeeds (and most probably the corporations who continue to rely on their accountants for advice and counsel) feel that the indictment against the entire firm was unwarranted. Once the dust has settled, they will no doubt welcome these experienced professionals with open arms.

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