Ed. note: This is the latest installment in a series of posts on lateral partner moves from Lateral Link’s team of expert contributors. Today’s post is written by Michael Allen, the Managing Principal of Lateral Link, who focuses exclusively on partner placements with Am Law 200 clients.
Near the entrance of the Calyon Building, the previous headquarters of Dewey & LeBoeuf, lies Jim Dine’s “Looking Toward the Avenue,” a triumvirate of headless statues inspired by the Venus De Milo. Where lie the visages of this homage to the prototypical form of Venus and furthermore, in the aftermath of Dewey, where have the pieces of this former empire landed?
Since May of 2012, there have been numerous articles inciting gossip and foretelling the troubles of Biglaw, but few have offered a retrospective of the overall trends in lateral moves from Dewey since the closure of the firm. The “largest winner” of the Dewey sweepstakes was Winston & Strawn, which added 23 partners (about 11% of those who moved in the final month), including Jeffrey Kessler, a titan of antitrust law who has represented every players’ union in the “big four” sports in the United States. Approximately seventy lawyers followed Kessler’s group.
Which other firms fared well in picking up Dewey lawyers?
Ed. note: This is a new series from Bruce MacEwen and Janet Stanton of Adam Smith Esq. and JDMatch. “Across the Desk” will take a thoughtful look at recruiting, career paths, professional development, human capital, and related issues. Some of these pieces have previously appeared, in slightly different form, on AdamSmithEsq.com.
At the time I wrote, I treated it more or less as a thought experiment, but we now see that shirking that obligation can come back to bite firms with sharp and large teeth right here in the real world, as seen in Henry Bunsow’s high-profile suit against Dewey’s former leadership (accusing them of running a “Ponzi scheme,” and alleging he’s out $1.8-million in lost capital, among other damages). The gist of Bunsow’s action is that Dewey’s leadership painted a misleadingly rosy picture of Dewey’s financial health, and failed to disclose its obligations in deferred compensation. Bunsow further alleges that former chairman Stephen Davis withdrew his own capital investment after he was forced out of his leadership role and “took those funds personally to the disadvantage of the firm and his fellow partners.”
My three-year-old proposal was that firms be obliged to prepare the equivalent of a Private Placement Memorandum for laterals — equally available to incumbent partners as well, of course.
I also noted that the reaction of most readers would probably fall into polar camps: That my proposal was “fascinating” or else “preposterous”….
As we mentioned in the Labor Day edition of Morning Docket, there’s some interesting news on the Dewey & LeBoeuf front. The one former Dewey partner being sued by Citibank for allegedly defaulting on a capital loan — energy lawyer Steven Otillar, now a partner in the Houston office of Akin Gump — is opposing Citi’s attempt to collect on the debt, by arguing that he was “fraudulently induced” to borrow the money in question.
How much are we talking about? How does the debt compare to Otillar’s compensation while at Dewey? And what are Otillar’s specific allegations about “fraudulent inducement”?
Today at 5 p.m. is the deadline for former partners of the bankrupt Dewey & LeBoeuf law firm to sign up for the “Partner Contribution Plan.” Under the terms of the Plan, which in its latest iteration seeks $90.4 million in “clawbacks” from ex-partners, participating partners would contribute specified amounts to the Dewey bankruptcy estate in exchange for releases from future liability (to the Dewey estate, to other participating partners, and to Dewey lenders, thanks to recent revisions to the PCP).
When talk of the Plan first surfaced, I opined that “[s]uch a deal sounds reasonable in principle.” I later observed that even if the PCP might not be perfect, “[i]f you’re a productive partner, happily ensconced at a new and stable firm, and just want to forget the D&L debacle and return to serving your clients, this deal may Dewey the trick.”
But now, after numerous revisions to the Plan, seemingly endless extensions of the deadline to join, and a still-insufficient amount of participation, I’m beginning to think that maybe it just won’t fly — and Dewey should just be allowed to die, i.e., slip into a straight-up liquidation. Perhaps Dewey’s bankruptcy advisers should stop trying to flog a product that nobody seems interested in buying.
UPDATE (4:35 PM): It looks like the Dewey estate’s perseverance has paid off. The $50 million participation threshold has been reached.
Here’s one good thing about the Partner Contribution Plan: thanks to the PCP, we now have detailed information about how much each of Dewey’s partners received from the firm in 2011 and 2012. And yes, we’re willing to share the data for the top earners with you, in spreadsheet form.
Some people are big believers in the virtues of black-box compensation. But here at Above the Law, we’re all about transparency….
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?
On Thursday morning, while talking to my therapist — no, not the People’s Therapist — I mentioned that I’ve been quite busy at work these days, covering the fast-moving story of a law firm implosion. I started to explain, but he interrupted.
“You mean Dewey?” he asked. “I know all about it. An old friend of mine is a partner there. He just asked me for a referral.”
Sign #1 that a law firm story has gone mainstream: your shrink knows about it. Sign #2: it’s getting covered by esteemed general-interest outlets like Slate and the Economist. (In Slate, Reynolds Holding argues that the experience of Ruden McClosky, the Florida firm that pulled off the bankruptcy-cum-merger maneuver last year, could provide helpful lessons for Dewey.)
Aside from a report that some partners want criminal charges brought against chairman Steven H. Davis, as noted in Morning Docket, things have been relatively quiet on the Dewey front over the past day or two. Perhaps too quiet, for some people….
On Friday, we broke the news of lawyer and staff layoffs at Dewey & LeBoeuf. There have been reports of the firm experiencing financial issues, and these cost-cutting measures appear to be part of a larger plan of attack. According to the memo sent out by chairman Steven H. Davis, Dewey plans to “reduc[e] the number of lawyers and administrative staff globally by approximately 5% and 6% respectively.”
But associates and support staff aren’t the only ones who will be feeling the pain. It appears that Dewey is seeking sacrifices from certain partners as well….
Over the past few weeks, we’ve been receiving interesting reports about Dewey & LeBoeuf. They were nothing but vague rumblings for a while, but they’ve now reached the point where we have enough to write about.
So let’s check in and ask: How do things stand at this major, top-tier law firm? In other words, “Where’s LeBoeuf?”
Partners at the differently abled challenged Howrey law firm continue to leave the reservation in droves. Last night, Am Law Daily reported on the departure of antitrust litigatrix Roxann Henry. She’s joining Dewey & LeBoeuf, which has picked up a number of Howrey refugees (including Henry Bunsow, former vice-chairman of the firm).
What’s next for Howrey? According to Legal Week, the remaining partners plan to vote next week on whether to wind down the firm. (For a discussion of possible Howrey endgames, see Am Law Daily, which interviewed partnership law expert Robert Hillman, a professor at UC Davis.)
After the dissolution vote, Howrey can focus on talking to Winston & Strawn about which associates and staff Winston might want (as well as other assets, like the Howrey name). As previously discussed, a few weeks ago Winston made offers to about 75 percent of Howrey’s partners. It looks like about 35 percent of Howrey’s remaining partners have agreed to join Winston, and Legal Week reports that confirmation letters went out to them last weekend.
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past six years. You can reach them by email: [email protected].
Since late last year, things have been booming in Hong Kong / China in cap markets, especially Hong Kong IPOs. M&A deal flow has recently been getting a bit stronger as well. Although one can’t predict such things with any certainty, all signs are pointing to a banner entire 2014 for the top end US corporate and cap markets practices in Hong Kong / China. This is not really new news, as its been the feeling most in the market have had for a few months now and things continue to look good.
The head of our Asia practice, Evan Jowers, has been in Hong Kong for about 10 days a month (with trips every other month to both Shanghai and Bejing) for the past 7 months (Robert Kinney and Evan Jowers will be in Hong Kong again March 15 to 23), and spending most of his time there meeting with senior US hiring partners at just about all the major US and UK firms there, as well as prospective candidates at all associate levels and partner levels, and when in the US, Evan works Asia hours and is regularly on the phone with such persons, as our the other members of our Asia team. Our Yuliya Vinokurova is in Hong Kong every other month and Robert is there about 5 times a year as well. While we have a solid Asia team of recruiters, Evan Jowers will spend at least some time with all of our candidates for Asia position. We have had long standing relationships, and good friendships in some cases, with hiring partners and other senior US partners in Asia for 8 years now.
Are you challenged by the costs and logistics of maintaining your office, distracting you from the practice of law?
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Everyone is talking about the importance of Social Media in Corporate America. But it is relatively safe to say that most law firms and lawyers are slightly behind the social curve. Most lawyers, at minimum, use LinkedIn, for networking. Some even use Twitter for pushing out short, pithy content, while many have Blogs, where they write their little hearts out. The adage “it is better to give than to receive” is not always true though in the world of Social. In the Social World – it is best to listen, give back and engage.
Social Media is a communications tool that can deeply educate you about the needs and wants of your clients and prospects when used in conjunction social media monitoring and sharing tools.
Take this quick quiz and see if you know how to use Social to help you engage more with your clients or to better service the ones you have.