Based on recent remarks by current and former leadership at Dewey & LeBoeuf, it seems that the firm is going to end with a whimper, not a bang. The current plan apparently involves no bankruptcy filing or dissolution vote, but just the defection of one partner after another, until nobody is left.
And the partner departures continue. As we mentioned in Morning Docket, for example, Greenberg Traurig just picked up about 50 Dewey lawyers over in Poland, to form Greenberg Traurig Grzesiak. Meanwhile, here in New York, Sutherland Asbill & Brennan has added insurance litigatrix Ellen Dunn, former co-head of D&L’s U.S. litigation practice, to its ranks.
While the partner stars realign themselves, back here on earth, last night brought bad news for former Dewey associates and staff….
It’s not a great time to be looking for a legal job. As noted in this New York Law Journal article, also linked in Morning Docket, the sudden outpouring of résumés from displaced Dewey people isn’t helping matters.
The latest issue concerns the cancellation of severance payments. We mentioned this looming possibility back in this post (see the final blockquote), but now it’s official. This news should not come as a surprise, given the recent mass layoffs — without severance — of associates and staff (presumably due to the firm’s inability to pay them).
Previously laid-off Dewey employees — some of them dismissed in the March layoffs, and some dismissed at other times (including some back in 2011) — learned last night that their severance payments will be coming to an end. We’ve reprinted the memo in full on the next page. Here’s an excerpt:
You are receiving this email because our records show that you have received severance payments. Unfortunately, given the firm’s current financial situation, at this time, it is not able to pay you any further amounts.
If you are receiving firm-paid COBRA, you will remain covered under the firm’s medical insurance with Empire BlueCross BlueShield until May 31, 2012. After that date, the firm will not make any further COBRA payments.
While the news of severance being terminated was expected by many of the Dewey sources we heard from, several expressed anger at the lack of advance notice. The firm has obviously known about its financial issues for weeks now, and many former lawyers and staffers wished they had been given more warning and time to prepare.
“An email announcement to those affected went out at [around 5:30 p.m.] yesterday, just a few hours short of when direct deposits would have been made for the 15th of the month pay day,” an angry ex-staffer informed us.
“I am a laid-off DL associate still looking for a job,” one tipster told us. “I just received this [email about severance]. I was supposed to receive my next severance payment tonight… yes, this was obviously anticipated, but still gotta love the few hours of advance notice. Thought I would at least get the one last payment.”
We asked this source for additional reaction, and he did not hold back: “No real reaction other than disgust at the way this was all handled. I received no communication at all since I was laid off in March about anything until this. I also love how partners complain about money they are owed by the firm they fleeced and then left for cushy new jobs, yet here I am looking for scraps.”
Another tipster told us: “I’m a former DL associate owed severance by the firm — no, I wasn’t fired. Today I received this email from the ‘office of the chairman.’ Once the s**t hit the fan I never expected to see the money anyway, but this still hurts.”
I asked this source how he came to depart from Dewey. It turns out that he and his colleagues had some foresight:
In early February the Steves gave their annual “everything’s great” speech, but our (satellite) office had been particularly slow for over a year. We had no idea how deep the financial issues facing the firm were at that point, but we knew our office was incredibly slow and thought the firm was considering shutting our office. I and a number of associates in my office approached the firm about severance, figuring it would be mutually beneficial for us to leave before the office was closed and not draw our full salaries until that date. I know that the firm agreed, on a case-by-case basis, to pay severance equal to a percentage of our salary over a 12-month period payable beginning the pay period immediately after the associate’s departure. In hindsight, that was probably a very easy deal for the firm to make, knowing it would never have to pay anyway!
In fairness to the firm leadership, I think this attributes to them far more foresight than they’ve exhibited at any point during this entire crisis. My sense is that top brass simply had a vague sense that “somehow everything will work out” — because how could it not? How could a firm as large, as profitable, and as prestigious as Dewey go down?
The answer: painfully. Good luck to everyone who has been affected by the implosion of this major law firm.
P.S. If you’re a former Dewey staffer in search of employment, feel free to check out the Dewey & LeBoeuf Job Share, on Facebook. The group now has more than 700 members.
P.P.S. If you’re interested, you can read the full email about cancellation of severance payments on the next page.)