The current CEO of Greenberg Traurig, Richard Rosenbaum, recently gave an interview to the Daily Business Review in which he discussed the firm’s recent capital call (among other subjects). We mentioned the interview in Morning Docket, but because it contains a lot of grist for the mill, it merits a second look.
The subtext of the interview — and, at one point, the explicit text of the interview — could be summarized as, “Look, we are not like Dewey!” The bad news is that such statements should even be necessary. The good news is that they seem to be true (at least based on the information currently available).
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….
Law firm consultants have endless advice about how best to compensate partners at firms. The consultants analyze the extremes: Lockstep compensation avoids quibbles about pay, but it may reward less productive older partners at the expense of the young turks. Eat-what-you-kill compensation rewards people who bring in business, but may cause bitter fights over client origination credit or cause partners to hoard their clients.
Various permutations on those extremes have their own advantages and disadvantages. But riddle me this: Why don’t we see consultants debating the pros and cons of pure black-box compensation? Under this system, the managing partner (or a small committee) sets compensation for each partner in the firm. There is no specific formula for allocating the spoils, and partners are forbidden from discussing their compensation with each other. Each partner is told what he’ll make in the coming year (either as an absolute number or as a projected draw assuming the firm hits 100 percent of budget), and the process is over.
At least a few large firms use black-box compensation systems, so this subject surely deserves a moment’s thought. What do you think of a black-box compensation system — good, bad, or indifferent?
So it seems that there will be two David B’s in the building. Boies Schiller was founded, of course, by the legendary David Boies, one of the greatest litigators of our time — known for his work on such marquee cases as Microsoft, Bush v. Gore, the Perry / Prop 8 case (which could end up in the Supreme Court), and too many others to mention.
Let’s take a closer look at David Bernick’s résumé, and analyze what his arrival means for BSF….
As businesses go, the business of law isn’t extremely capital intensive. Most of the capital in Biglaw is really human capital. As one bankruptcy lawyer put it, “It’s incredible how fragile law firms are. Unlike a company, the principal assets walk out the door every night.”
But law firms do need some capital. Those fabulous offices — and fabulous associates, at $160,000 and up — don’t come cheap.
Firms can obtain the capital they need to operate through borrowing; but credit needs to be used judiciously, lest a firm go the way of Dewey & LeBoeuf. And partners make capital contributions to the firm, most notably when they buy into the partnership.
But sometimes that capital isn’t enough. So firms issue capital calls to their partners, which brings us to today’s topic….
Ed. note: This is the second column by Anonymous Partner based on his interview of a more-senior partner, “Old School Partner” (“OSP”). You can read the first column in the series here.
“It was a nice profession,” Old School Partner told me, especially for a senior partner at a white-shoe firm. Collegiality, interesting work, and a good living were his. Despite occasional internal dust-ups about compensation within the partnership, partners were generally content with what they were making.
But things were about to change, and what had been a guarded and close-knit segment of the legal profession was soon thrust into an unwanted spotlight. It was a “watershed” moment for partners.
The “watershed” that mucked things up? The launch of American Lawyer magazine….
Earlier this week, we wrote about the lavish payments that Dewey & LeBoeuf made to its former executive director, Stephen DiCarmine, and its former chief financial officer, Joel Sanders, in the year leading up to the firm’s bankruptcy filing. Each man received almost $3 million in salary, bonuses, and expense reimbursement. (There’s additional detail and number crunching over at The Lawyer.)
Today we bring you additional interesting information from — and speculation about — the Dewey bankruptcy filings. For starters, who are the two Dewey partners who received more than $6 million each in the year leading up to the Chapter 11 petition?
As we reported over the weekend, it’s looking like Dewey & LeBoeuf will soon find itself in bankruptcy (perhaps voluntarily, perhaps not). The specter of bankruptcy raises a question for the many former partners of Dewey: dude, where’s my car capital contribution?
Let’s find out — and get the latest dispatches on the Dewey death spiral, including news of a new home for former vice chair Ralph Ferrara….
As we mentioned last week, the American Lawyer recently released its highly influential, closely watched Am Law 100 law firm rankings. And despite all the doom and gloom permeating the legal profession, as well as the stagnant bonuses for associates lucky enough to make it into Biglaw, partners at large law firms are living just as large as ever.
In a way, the recovery in Biglaw is not unlike the recovery in America in general. If you were already well-off, you’re doing great now. It’s just not trickling down to anybody else. See, e.g., anemic spring bonuses.
Interestingly enough, the division of the world into “haves and have-nots” continues even into the world of major law firms. Partners at super-top-tier firms are putting even more distance between themselves and partners at less high-powered or less profitable firms.
The four attorneys who just jumped to DLA are John J. Altorelli and Alexander G. Fraser, who were partners at Dewey, and Patrick Costello and Gerald Francese, who were counsel. All four will be partners at DLA, and Altorelli will serve as co-chair of DLA’s U.S. finance practice, as well as a member of the executive committee. Although DLA is not a paradise, presumably the Dewey defectors determined DLA Piper to be more stable than Dewey (unless they took an “any port in a storm” approach, which is certainly possible).
In other Dewey news, the American Lawyer is revising the 2010 and 2011 financial results for Dewey — downward. And we’re hearing rumblings about some of the firm’s international offices….
OmniVere’s delivery of end-to-end technology & data consulting to position the company as a true differentiator in the global legal technology and compliance space.
CHICAGO, IL, September 29, 2014 – OmniVere today announced the creation of the company’s technology & data consulting arm and the addition of several industry-renown experts, including the former co-chairs of Berkeley Research Group’s (BRG’s) Technology Services practice, Liam Ferguson, Rich Finkelman and Courtney Fletcher.
This new consulting practice will provide and expand existing OmniVere eDiscovery consulting services to corporations, law firms and government agencies with a special focus on compliance, information governance and eDiscovery. This addition of this top talent now positions OmniVere as a true industry leader in the technology and data consulting space offering best-in-class end-to-end services.
Ferguson, Finkelman & Fletcher are nationally recognized experts and seasoned veterans in the areas of overall technology, electronic discovery, and structured data. At OmniVere, the team will be focused on all global consulting activities with respect to legal compliance, complex data analytics, business intelligence design and analysis, and electronic discovery service offerings.
The Trust Women conference is an influential gathering that brings together global corporations, lawyers and pioneers in the field of women’s rights. Unlike many other events, Trust Women delegates take action and forge tangible commitments to empower women to know and defend their rights.
This year, the Trust Women conference will take place 18-19 November in London. From women’s economic empowerment to slavery in the supply chain and child labour, this year’s agenda is strong and powerful. Speakers include Professor Muhammad Yunus, Nobel Laureate and founder of the Grameen Bank; Phumzile Mlambo-Ngcuka, Executive Director of UN Women; Mary Ellen Iskenderian, President and CEO of Women’s World Banking and many other influential leaders. Find out more about Trust Women here.