Casey Sullivan

On our recent post about bonuses at Bingham McCutchen, some commenters complained about our coverage of the firm. Here’s what one said: “What this article fails to mention is that NO ONE made their hours, it’s THAT slow. Good job, ATL, for eating whatever it is Bingham pays you to NOT report [on bad goings-on at the firm].”

Actually, we’re perfectly willing to report on negative developments at Bingham (or any other major law firm). Just email us or text us (646-820-8477), and we’ll investigate.

There’s certainly a lot to cover over at Bingham: tumbling profits, partner departures, and unfortunately timed staff layoffs. We’ve collected some reporting from around the web, which we’ve combined with inside information from ATL tipsters at the firm. Let’s have a look, shall we?

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‘So it’s decided – we’ll be Cravath, Swaine, Moore, & Doritos.’

All those professional responsibility lectures, and bar prep, and boring CLEs that I attended after becoming a lawyer, and all the boring CLEs I dutifully watched on the Internet after I escaped the probationary period, consistently preached the evils of non-lawyer ownership of law firms.

It raises ethical concerns! It dilutes what it means to be a lawyer! This is a profession, not a business! All the usual complaints from a profession convinced that it’s made up of beautiful and unique snowflakes with unimpeachable judgment.

But with the rest of the world embracing new structures to permit non-lawyer ownership — and empirical evidence suggesting that those models raise fewer ethical concerns than the alternative — some argue that the U.S. firm model stifles innovation and cripples international competitiveness.

But the better question is, “Don’t non-lawyers own law firms already?” And to the extent the answer is “of course,” shouldn’t the profession be bending over backwards to approve ownership models that better serve the firms and their clients than the status quo?

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The Big Peach turns sour for one leading law firm.

It seems that “Hotlanta” was less than sizzling for one major law firm. A Biglaw shop has decided to beat a retreat from Atlanta, shuttering its money-losing operation down in the ATL.

What prompted this firm to hop on the midnight train from Georgia? And how many people will be affected by the office closing?

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Sorry, the Layoff Lady hasn’t gone away.

Sorry, folks — we couldn’t make it two full weeks without a story about law firm layoffs. We continue to hear reports about them, which we publish as we get sufficient corroboration for each one. If you have information to share, please email us or text us (646-820-8477; texts only, not a voice line).

Thus far, layoffs have hit support staff the hardest. Junior staffers often bear the brunt, since some of the layoffs are seniority-based.

But senior people, including law firm management, are not immune to the cuts. One law firm recently laid off two executives, along with about twenty staffers…

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Juan Monteverde

When Alexandra Marchuk filed her epic lawsuit against her former firm, Faruqi & Faruqi LLP, and one of its partners, Juan E. Monteverde, she aired a lot of dirty laundry. Here’s one allegation that got a lot of attention in the corporate-law community: “[In advance of a Delaware Chancery Court hearing,] Mr. Monteverde explained that Judge [Travis] Laster was partial to good-looking female lawyers, but F&F’s female local counsel was ugly; so Mr. Monteverde wanted Ms. Marchuk to appear with him because her good looks would influence the judge in favor of F&F. Mr. Monteverde told Ms. Marchuk to wear her hair down, wear a low-cut shirt, and to try to look as alluring as possible during the hearing.”

Some wondered: did members of the Delaware Chancery Court hear about this rather embarrassing allegation? The answer would appear to be yes, based on a letter that a Faruqi lawyer recently received after moving for Juan Monteverde to be admitted pro hac vice….

Please note the UPDATE added after the jump.

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Juan Monteverde and Alexandra Marchuk

For connoisseurs of salacious suits, Marchuk v. Faruqi & Faruqi is the gift that keeps on giving. First Alexandra Marchuk, a young lawyer and recent Vanderbilt Law graduate, sued the Faruqi firm, claiming that she was subjected to relentless sexual harassment during the short time that she worked there. Then the Faruqis and partner Juan Monteverde fired back, filing aggressive counterclaims against Marchuk.

Marchuk isn’t taking these claims lying down. She has amended her complaint to add new causes of action and to increase her multimillion-dollar demand….

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Star-crossed lawyers: Juan Monteverde and Alexandra Marchuk.

If you want to sue a defense-side Biglaw firm for employment-related claims, go for it. Unless your lawsuit is bats**t insane, chances are the firm will settle with you. See, e.g., Charney v. Sullivan & Cromwell; Schoenfeld v. Allen & Overy. Heck, you don’t even need to file an actual case; even threatened litigation can yield a six-figure payday.

Biglaw firms are busy — busy making money, of course — and very reputation-conscious. They don’t want to be distracted by litigation, and they don’t want their white shoes sullied by grime. They will pay good money to make headaches go away.

But suing a scrappy plaintiff-side firm is an entirely different story. They will hit back — and hard.

Last month, Alexandra Marchuk sued her former firm, Faruqi & Faruqi, making a host of salacious allegations. The most incendiary: that a partner of the firm, Juan Monteverde, forcibly had sex with her in his office after the firm holiday party.

Now the Faruqis and Monteverde are turning it around on Alexandra Marchuk. They’re suing her back, filing counterclaims and seeking an eight-figure sum….

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This morning I attended the confirmation hearing for the Chapter 11 bankruptcy plan of Dewey & LeBoeuf. As I mentioned on Twitter a few minutes after leaving the hearing, Judge Martin Glenn confirmed the plan.

Under the plan, secured creditors will recover between 47 to 77 cents on the dollar, while unsecured creditors will wind up with 5 to 14 cents on the dollar. Secured creditors hold about $262 million in claims; total creditor claims, secured and unsecured, amount to about $550 million.

So that’s the bottom line. But what was the hearing itself like? Here are my observations, including a few photos — because bankruptcy court coverage is totally WWOP….

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Dewey & LeBoeuf's sign at 1301 Avenue of the Americas. (Photo by David Lat. Feel free to use.)

Let’s take a step back from the hurly-burly of day-to-day, hour-by-hour coverage of Dewey & LeBoeuf, the once-powerful law firm that could soon find itself in bankruptcy or dissolution. We will return to bringing you the latest Dewey news in tomorrow’s Morning Docket. (Of course, as you may have noticed, we added many updates to Tuesday night’s story; refresh that post for the newest developments.)

Let’s take a step back, and ask ourselves: Who is to blame for this sad state of affairs? And what lessons can be learned from the Dewey debacle?

Multiple UPDATES, including a short bio of Stephen DiCarmine, after the jump.

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Over the weekend, when it looked like lenders to Dewey & LeBoeuf might be willing to give the troubled law firm more time to sort out its finances, I observed that “LeBoeuf is not yet cooked.” But it now looks like my fairly charitable assessment was unduly, or maybe even wildly, optimistic.

Can you say “warm red center”? As we reported yesterday, another slew of Dewey partners — about eleven in all, including former chairs of the tax practice and the corporate finance practice — started heading for the exits.

And perhaps they’re doing so with the blessing of firm management. Check out what D&L is now telling its partners….

UPDATE (10:10 AM): Now with text of memo appended.

UPDATE (10:30 AM): Now with discussion of London office added.

UPDATE (11:10 AM): Now with comments from Martin Bienenstock, a member of the firm’s four-person “Office of the Chairman.”

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