It’s time for your daily dose of Dewey & LeBoeuf news. There’s a lot to cover, including updates about incoming associates, overseas offices, and contingency planning.
Word on the street is that Dewey is deferring incoming associates to January 2013. We reached out to the firm for comment, and they haven’t gotten back to us yet. But it seems logical for the firm to defer associates to early 2013, given how the situation at D&L remains in flux. By next year, Dewey will have a better sense of its ultimate size and its long-term associate needs.
Of course, incoming associates at Dewey might want to make some backup plans. Which brings us to the other D&L news….
We’ve written a fair amount about Dewey’s foreign offices. Yesterday we mentioned that Moscow and the Middle East might get shuttered or spun off. We’re also hearing that Dewey might ditch its historically unprofitable Hong Kong office.
Dewey & LeBoeuf’s Italian partners are attempting to leave the firm’s US LLP as a way of strengthening their position if the troubled firm goes under.
Milan and Rome partners are currently negotiating an exit from the legal entity while remaining part of the firm, reducing their liabilities if the firm collapses following over 65 partner exits since the start of 2012.
It is understood that breaking away from the US LLP would effectively ringfence the Rome and Milan offices’ assets, meaning that the partners can continue operating without assets being seized in the case of the firm dissolving.
Yikes: they said the D-word. And they’re not the only ones who are discussing the possibility of Dewey dissolution. As law firm communications guru John Hellerman of Hellerman Baretz recently observed to us, “Dewey is yet one more example that firms have little institutional brand value. Instead, their brands are made up of the collective reputation of their partners achieved over time. And when the talent (assets) start to walk, the institution has two choices: incentivize them from leaving (better management, communication, etc.) or close the doors.”
Back to the Italian drama, as recounted by The Lawyer:
[T]he Italian teams are in talks with other firms about a mass defection, after similar discussions with DLA Piper fell through. A Dewey Rome partner commented: “Given the situation, everyone is worried.”
If Dewey does go under, it is thought that partners who have left the firm, and are owed capital that they had put into the business, are in a better position than current partners because they would have the status of creditors rather than shareholders and could recover their money.
“If Dewey does go under” is a frightening way to begin a sentence. On the bright side, though, one can think of few firms with a stronger bankruptcy bench….