Defections continue at Dewey & LeBoeuf. On Tuesday, the WSJ Law Blog and Thomson Reuters reported on the departure of four M&A lawyers for DLA Piper. As we mentioned on Monday, antitrust litigator Eamon O’Kelly just flew the Dewey henhouse for Arent Fox. The recent departures take the number of partners who have left Dewey in 2012 to at least 40 (a decrease of about 13 percent in partner headcount).
The four attorneys who just jumped to DLA are John J. Altorelli and Alexander G. Fraser, who were partners at Dewey, and Patrick Costello and Gerald Francese, who were counsel. All four will be partners at DLA, and Altorelli will serve as co-chair of DLA’s U.S. finance practice, as well as a member of the executive committee. Although DLA is not a paradise, presumably the Dewey defectors determined DLA Piper to be more stable than Dewey (unless they took an “any port in a storm” approach, which is certainly possible).
In other Dewey news, the American Lawyer is revising the 2010 and 2011 financial results for Dewey — downward. And we’re hearing rumblings about some of the firm’s international offices….
Let’s start with the financial news. Last night, Am Law Daily posted the following:
The American Lawyer is revising the 2010 and 2011 financial results reported for Dewey & LeBoeuf in our annual Am Law 100 ranking. The revision is based on a review prompted by a March 27 Bloomberg story. In that article, Dewey’s management reported earnings of $250 million for 2011, far less than the amount reported by The American Lawyer for its Am Law 100 database three weeks earlier.
On March 7, Dewey management told The American Lawyer that the firm collected $935 million last year, up from $909.9 million in 2010. According to the Bloomberg story, which was corroborated by a current and a former partner, however, the revenue figure for 2011 is actually $782 million, up 3 percent from the previous year. According to the new information, equity and non-equity partners shared a profit pool of $254 million. Equity partners, viewed apart from the non-equity tier, shared a net of $197.5 million, not the $340.5 million first reported by The American Lawyer.
According to the new information, profits per partner last year were $1.04 million, not the $1.8 million The American Lawyer initially reported. Additionally, our new reporting shows that the firm’s revenue per lawyer was $750,000 last year, not $900,000.
Going from $1.8 million to $1 million in PPP is a significant drop, altering Dewey’s place in the profits-per-partner rankings by probably dozens of spots (we’ll know how many when the full Am Law 100 rankings come out). Consider DLA Piper, the new home of the latest Dewey defectors. DLA had PPP of $1.225 million in 2011. Revising Dewey down by $800,000 takes it from being well ahead of DLA to somewhat behind.
(The size of the revision also makes me wonder about the overall accuracy of PPP figures, but that’s another kettle of fish. My general view on the law firm financial data reported by Am Law is not unlike some people’s view on God: we believe because it’s all we’ve got. If you have information about the accuracy of your firm’s financials as reported by Am Law in the past, please feel free to email us. If we get enough tips, maybe we’ll write about this subject.)
For its part, Dewey denied that its numbers need to be restated. The firm issued a statement on the subject (which we’ve reprinted in full on the next page).
Meanwhile, on the international front, we’ve heard reports that some of the firm’s overseas offices might be shuttered over the next few months. The reports are vague, however, and some sources deny that there are plans for the closing of any specific office. But if some foreign offices were to close, such as the more thinly staffed ones, it wouldn’t necessarily be a bad thing. Office closures could assist Dewey in refocusing on on its core clients and core locations.
Some of the reports concern Dewey’s offices in Italy. The firm’s two Italian offices, in Rome and Milan, are home to more than 100 lawyers, including about 30 partners. One tipster tells us that the Italian offices might break off to start their own independent firm or might wind up joining another large international law firm, such as White & Case.
“The recent events opened up a furious internal debate and fight,” says our Italian source. Some of the Italian partners have issues with the leadership of Bruno Gattai, head of D&L’s Italian practice. But Gattai, who has received numerous awards for his M&A and private equity work, is a major rainmaker. “Some consider him a despot, but he controls a lot of business,” according to our source.
Some of the rank-and-file Italian partners believe that having the Italian operations under the international umbrella of Dewey & LeBoeuf helps keep Gattai under control. They fear that he would be “out of control” as the head of a strictly Italy-based firm without any ties to a global mega-firm. “It is a typical Italian saga,” our tipster tells us.
Will Dewey say ciao to its Italian offices? Or will it all turn out molto bene? Stay tuned.
For Dewey’s statement on its financials and for links to recent news stories cited in this post, please flip to the next page.
P.S. In unrelated Dewey news, one former Dewey associate objected to this comment in a prior post by Elie: “We know from past experiences that when firms get into [financial trouble], the partners take care of themselves, but the associates are on their own.” This source pointed out that some Dewey partners have brought associates over to their new homes — and should be praised for not leaving their people in the lurch.