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.”
The law firm of Dewey & LeBoeuf, which is currently fighting for its life, might have good news to report — and we’re happy to share it with you. It seems that LeBoeuf is not yet cooked.
As we’ve previously mentioned, tomorrow, April 30, was supposed to be the deadline for Dewey to reach a new deal with its syndicate of bank lenders. The firm owes its banks a reported $75 million pursuant to a $100 million revolving line of credit.
So what’s the latest — and relatively upbeat — news about Dewey?
UPDATE (4:30 PM): Additional, less cheerful Dewey updates — about the talks with Greenberg Traurig, and about embattled ex-chairman Steven H. Davis — have been added after the jump.
UPDATE (6:00 PM): More Dewey debt news — good news, happily — has been added below.
Here in New York, the theater community is gearing up for the Tony Award season. Which shows will snag coveted nominations for best musical and best play?
In the world of Biglaw, though, there’s no competing with the drama now unfolding at Dewey & LeBoeuf, the once elite and now rapidly imploding law firm. Thus far, the story of Dewey has been dynamic but depressing, more tragedy than comedy.
But might that change? Could the tale of D&L end happily, like a Shakespearean comedy — with a wedding?
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….
The economy seems to be on the mend. Corporate profits are strong, and the Dow is north of 12,000. In the legal world, layoffs are down, bonuses are up, and hiring is way up.
But governments — federal, state, and local — are staggering under mountains of debt. State and local governments have borrowed $2.4 trillion as of mid-2010, and they’ve promised another $3 trillion in retirement benefits.
There is tons of talk out there about a possible wave of municipal bankruptcies. And even if the talk might be overblown, the possibility of default by multiple local governments or even state governments — which might someday get the ability to declare bankruptcy — can’t be ruled out.
If municipal bankruptcies start popping up all over the place, Dewey & LeBoeuf will be ready. The firm just picked up a leading expert in the area….
So should Weil Gotshal associates be rooting against a government bailout of GM and the other big automakers?
GM bankruptcy –> more fees for Weil –> bigger bonuses (which WGM has not yet announced)?
UPDATE (1:00 AM): As of now, it looks like the auto industry bailout talks have failed. This makes a GM bankruptcy even more likely.
But even if GM does file for Chapter 11 (or even Chapter 7), thereby generating thousands of billable hours for Weil associates, it’s unlikely that Weil will pay out Skadden-sized bonuses (although the speculation sure is fun). As noted in the comments, Weil generally follows the market, and the market has settled around Cravath.
Paying above market could create problems for Weil. As one reader previously noted, “Weil will never be a bonus leader because there is concern at the firm that it would seem unsightly by the firm’s bankruptcy clients to lead the market with bonuses.”
That concern seems warranted. As GM director George Fisher told Bloomberg last week, “We are fearful, very fearful, of a prolonged [bankruptcy] proceeding that would just destroy our brand in the marketplace and therefore that is not considered a viable option…. These Wall Street geniuses and law firms are coming up with all these solutions that make them a lot of money.”
This morning brings some big news in the world of bankruptcy law. From the WSJ Law Blog:
You can go home again, especially if you’re Harvey Miller (at right). The legendary bankruptcy lawyer is expected to rejoin to Weil Gotshal, whose partners are scheduled to vote on his return tomorrow.
“I would be delighted to have Harvey back, but it’s premature at this stage to comment on his rejoining the firm until the partnership votes on the issue,” says Stephen Dannhauser, firm chair.
Before decamping to investment bank Greenhill & Co. in 2002, Miller had spent the previous 33 years at Weil, building its bankruptcy department into one of the most prominent debtor-side practices in the country.
And from a little bird (so consider this to be nothing more than rumor at this point):
It appears four bankruptcy partners are leaving Weil and moving to Cadwalader (apparently to swim in Bob Link’s shark tank and make the big $$$). Partners include Deryck Palmer, John Rapisardi, and George A. Davis.
Could the return of Harvey Miller to Weil be related to the (rumored) departures of these younger partners?
We are following up on this rumor and will let you know what we find out.
UPDATE: Harvey Miller’s return to Weil is official. The WGM press release is available here. A longer version of the release, which was circulated by email at Weil, appears after the jump.
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 seven years. You can reach them by email: firstname.lastname@example.org.
It’s that time of year again when JDs are starting to apply for 2L summer jobs and 2L summers are deciding which practice area to focus on.
For those JDs with an interest in potentially lateraling to or transferring to Asia in the future, please feel free to reach out to Kinney for advice on firm choices, interviewing and practice choices, relating to future marketability in Asia, or for a general discussion on your particular Asia markets of interest. This is of course a free of cost service for those who some years in the future may be our future industry contacts or perhaps even clients.
For some years now Kinney’s Asia head, Evan Jowers, has been formally advising Harvard Law students with such questions, as the Asia expert in Harvard Law’s “Ask The Experts Market Program” each summer and fall, with podcasts and scheduled phone calls. This has been an enjoyable and productive experience for all involved.
If you are considering a virtual law practice, you know that many of today’s solo firms started that way. But why are established, multi-attorney law firms going virtual?
Many small firms are successfully moving part—or even all—of their practice to a virtual setting. This even includes multi-jurisdictional practice spanning several states and practice areas, although solo and small partnerships are still the largest adopters of virtual law.
Can you do the same? The new article Mobile in Practice, Virtual by Design from author Jared Correia, Esq., explores how mobile technology bring real-life benefits to a small law firm. Read this new article—the next in Thomson Reuters’ Independent Thinking series for small firms—to explore how a mobile practice:
Reduces malpractice risk
Enables you to gather the best attorneys to fit the firm, regardless of each person’s geographic location
Leverages mobile devices and cloud technology to enable on-the-spot client and prospect communication
Transitioning in-house is something many (if not most) firm lawyers find themselves considering at some point. For many, it’s the first step in their career that isn’t simply a function of picking the best option available based on a ranking system.
Unknown territory feels high-risk, and can have the effect of steering many of us towards the well-greased channels into large, established companies.
For those who may be open to something more entrepreneurial, there is far less information available. No recruiter is calling every week with offers and details.
In sponsorship with Betterment, ATL and David Lat will moderate a panel about life in-house and we’ll hear from GCs at Birchbox, Gawker Media, Squarespace, Bonobos, and Betterment. Drinks, snacks, networking, and a great time guaranteed. Invite your colleagues, but RSVP fast, as space is limited.