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A disaster merger, an ocean of debt, guarantees to dozens of (supposed) “superstar” lawyers, a seemingly disfunctional partnership…what could possibly go wrong? Dewey & LeBoeuf has last night filed for Chapter 11 bankruptcy in the US.
A run down of what went wrong from the New York Times.
All our Dewey stories are here.
John Gapper of the Financial Times on how the end of Dewey symbolises the changes coming for large law firms:
“Like Lehman, Dewey was a second-tier institution that over-borrowed and overextended itself in a push to become one of its industry’s global elite…
…In austere times, with greater cost pressures, law firms cannot borrow money and make rash promises to force their way into the top tier. Those beneath the UK’s “magic circle” and firms such as Cravath and Davis Polk in the US will have to be more like utilities. They will be lower-margin businesses doing higher volumes of ordinary work, perhaps owned by outsiders.”
For more Dewey, see here.
Even the New Y0rk Times seems to have difficulty understanding how he got to that figure.
More end of Dewey news here.
The New York Times reports that Dewey & LeBoeuf is now encouraging its partners to leave. The NYT report includes this vignette from 2011 as Dewey’s problems mounted:
“Cash was already running low; partners were already owed tens of millions of dollars in back pay. The firm had fallen so behind on collecting unpaid legal bills that management sent out an e-mail offering partners free iPads and iPhones if their clients paid them on time.”
More Dewey news here.
New York Prosecutors Examining Former Dewey Chairman - New York Times.
Manhattan DA Investigates Former Dewey & LeBoeuf Chairman – Wall Street Journal.
“Among potential partners for the merger-and-bankruptcy plan being floated, Dewey has made overtures to New York-based Shearman & Sterling LLP; Greenberg Traurig LLP, which has roots in Miami; and Pittsburgh-based Reed Smith LP, these people said.
A Greenberg Traurig spokeswoman said: “We have a great deal of respect for Dewey LeBoeuf and their quality lawyers. It would be inappropriate for us to comment on market rumors.” At Shearman & Sterling, a spokesman said the firm “isn’t in discussions with Dewey & LeBoeuf concerning a merger.”"
Wall Street Journal report. And followed by a similar report in the New York Times.
“An accelerating wave of partner defections from the New York law firm Dewey & LeBoeuf is now threatening to violate the firm’s loan agreements with its banks.” – New York Times
Some of the partners are only on $450,000 a year…and they have to do tedious things like drafting documents!
Today’s NYT DealBook special supplement on the legal profession can be read here. Highlights:
Even more about how amazing Cravaths is and how terrible Dewey was
See also: “There are now far more capable lawyers and law firms than there is work for them to do”
A vastly pessimistic interview with a historian of law firms in the New York Times.
