Bankruptcy, Biglaw, Crime, Dewey & LeBoeuf, Dissolution, Partner Issues, Summer Associates

We Don’t Have Any Summer Associates, Dewey?
(And additional info about a possible criminal probe.)

Elie here. In news that should shock no one, Dewey & LeBoeuf has canceled its 2012 summer program. Honestly, if you were a 2L who was planning on going to Dewey this summer and you are just now figuring out that it’s not going to happen, you should probably spend more time reading Above the Law and less time sniffing glue. (Pro tip: sniffing glue + reading ATL = total awesomeness.)

We’ve also got some additional information about a possible criminal probe into the Dewey situation by Manhattan District Attorney Cyrus Vance. (We briefly considered the headlines “Dewey Have Any Lube for this Probe?” or “Dewey Know Any Good Criminal Defense Lawyers?”)

Let’s get into it. I’ll turn the floor over to Lat….

UPDATE (5:25 PM): Additional info, appended after the jump.

UPDATE (4/30/2012): We’ve added some material to the memo about the cancellation of the summer program that was initially missing when we first published this post.

Lat here. We don’t know a lot about the contours of any possible criminal inquiry (which was first reported last night by Law 360). Here’s an account from Bloomberg:

Dewey & Leboeuf LLP, the New York law firm fighting to stay alive after more than 70 partners left, is the subject of a criminal probe by state prosecutors into whether managers misled partners about payments due them, a person familiar with the matter said.

The investigation by Manhattan District Attorney Cyrus Vance Jr. is in a preliminary stage and has yet to determine whether a crime has been committed, said the person, who declined to be identified because the matter isn’t public.

Steven Davis

As the ABA Journal points out, the Law360 and Bloomberg accounts agree that the Manhattan DA’s office might delve into L’Affaire Dewey, but differ in the particulars:

Law360, relying on an unnamed source, says a group of discontented partners called the New York County District Attorney’s office seeking a criminal probe of [former chairman Steven H.] Davis. And Bloomberg, also relying on an unnamed source, is reporting the DA has begun a preliminary criminal probe involving the law firm. A probe at the preliminary stage means there has been no determination whether any crimes were committed.

According to the Law360 account, Dewey lawyers were surprised to learn at an October partner meeting that Davis signed more than 100 contract guarantees for some partners, including his friends, apparently without any management oversight. The source also alleged that Davis cashed out his personal capital in the firm in violation of contract agreements.

Bloomberg’s story says investigators are examining whether managers misled partners about payments due them.

In either case, someone at Dewey could be in deep dew-dew.

UPDATE (5:25 PM): Additional info, from the WSJ Law Blog:

According to [an internal Dewey] memorandum, the investigation is focusing largely on the firm’s former chairman, Steven H. Davis, who led the firm from 2003 until several weeks ago, when his responsibilities were diminished in a management shakeup. A call to Mr. Davis at his office was not immediately returned.

The firm has asked two of its lawyers, Harvey Kurzweil and Seth Faber, to conduct an internal investigation into the situation, the memorandum said.

“In addition, we have been in contact with the District Attorney’s Office and have told the District Attorney’s Office that the Firm intends to cooperate with that Office’s investigation,” according to the memorandum.

The news on Dewey’s summer associate program is more final and more sobering. This is from the memo that Dewey sent out to its former would-be summer associates:

Over the last few weeks, we have received calls from law students asking about Dewey & LeBoeuf’s plans for our 2012 summer associate program in light of the ongoing press coverage of the firm’s restructuring. We have, throughout this time, remained hopeful that we would be in a position to welcome our summer class to the firm. While each of our practice groups continues to achieve major accomplishments in the nation’s most exciting deals and cases, we have concluded after careful consideration that we should not proceed with our 2012 summer program.

It’s true that Dewey, to its credit, continues to serve its clients during this time of crisis. But query whether the “major accomplishments” spin will be appreciated by law students who just learned, right before finals, that they’re out of jobs (in an economy that’s still a bit rough).

Next week is a big one for Dewey, with Monday as the firm’s deadline for renegotiating its debt. If you have information to share with us about Dewey, please email us or text us (646-820-8477).

(The full memo cancelling the summer program appears on the next page, along with links to additional articles about the possible criminal investigation.)

(hidden for your protection)

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