* Steven Davis, D&L’s former chairman, really wants to make sure he’ll be able to use the firm’s insurance policy to defend himself, or else he’ll “suffer undue hardship.” Sorry, but after all the undue hardship you caused, nobody feels bad for you. [Am Law Daily]
* As it turns out, the Mitt “47 Percent” Romney recording may have been illegally taped, but Florida authorities aren’t investigating — a victim hasn’t come forward to complain. What, no “off the cuff” remarks this time, Mitt? [Washington Wire / Wall Street Journal]
* Even if you get disbarred, you can still go on to work for a Biglaw firm. In other news, apparently you can last about a month at Lewis Brisbois while using a stolen identity before you get fired. [Las Vegas Review-Journal]
* Arizona’s governor was really excited that the injunction against SB 1070′s “show me your papers” provision was lifted by Judge Susan Bolton. She won’t be as excited when all of the lawsuits start rolling in. [Bloomberg]
* It’s probably bad if your dean resigns before the school opens. J. Michael Johnson, the ex-dean of Louisiana College School of Law, left to take a “great job offer” (i.e., not a law school deanship). [Shreveport Times]
* Good news, ladies! A serial subway “grinder” in NYC avoided jail time after ejaculating on three women in separate incidents, and now city pols are trying to make it harder for perverts to get off. [New York Daily News]
The Dewey & LeBoeuf drama continues to unfold. As we mentioned in Morning Docket, there have been a few notable recent developments. Citibank just filed a vigorous response to allegations by Steven Otillar, a former Dewey partner, that Citi colluded with Dewey to take advantage of individual partners. Meanwhile, three former leaders of the firm — former chairman Steven Davis, former executive director Stephen DiCarmine, and former CFO Joel Sanders — have filed objections to the global settlement with former partners.
It’s not a pretty picture. And here’s what we’re wondering: Could it happen to another major law firm, sometime in the next twelve months?
* Come on, people, Dewey really think that it’s fair that these proposed partnership clawback settlements blame only us for the firm’s implosion? The Steves and ex-CFO Joel Sanders don’t think so. [Bloomberg]
* “[E]ven if partners’ capital contributions were used to repay Dewey’s indebtedness—so what?” Well, that’s certainly one way to defend a suit alleging Citibank’s participation in a Ponzi-like scheme. [Am Law Daily]
* A $280K bonus sure seems nice, but do all Supreme Court clerks choose life in Biglaw once they’ve completed their stints at the high court? As it turns out, the answer is no — some view the money as “golden handcuffs.” [Wall Street Journal]
* Because nobody can ogle these crown jewels except Prince William: the royals’ potential suit against Closer magazine over topless pics of Kate Middleton has turned into full-blown privacy proceeding. [New York Times]
* If you’re struggling in law school, it may be wise to take some advice from those who’ve been there before you, like SullCrom’s Rodge Cohen, or the Ninth Circuit’s Chief Judge Alex Kozinski. [National Law Journal]
Many of the lawyers from the bankrupt law firm of Dewey & LeBoeuf have found new professional homes. But what about the managers? Since the firm filed for bankruptcy, we haven’t heard much about the fates of D&L’s leadership troika: former chairman Steven Davis, former executive director Stephen DiCarmine, and former chief financial officer Joel Sanders. What’s going on with them? Have they found new jobs?
Of course, they can afford to take some time off before returning to the workforce. As we previously reported, DiCarmine and Sanders each received more than $2.9 million — in salary, bonuses, and expense reimbursement — in the year leading up to the firm’s bankruptcy filing.
So, assuming he has reasonable living expenses, former CFO Joel Sanders can afford to coast for a while. But that’s not what he’s doing. He’s already back in the workforce.
What if we were to tell you that the chief financial officer of Dewey has found a new position? At a law firm — a pretty sizable one, in fact?
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….
* Presidential campaigns for Election 2012 are focusing in on the Supreme Court and future appointments to the high court, and Vice President Joe Biden is really not a fan of Justice Scalia. [POLITICO]
* Dewey know what the ramifications of D&L’s $50M insurance policy will mean for the resolution of the failed firm’s bankruptcy proceedings? Well, Steve Davis is probably happy. [Thomson Reuters News & Insight]
* Howrey going to pay off all of our creditors? Probably by dipping into the coffers of the 70 other law firms that took on our defectors. Have fun with all of those subpoenas. [Capital Business / Washington Post]
* The percentage of women in Biglaw partnership positions is up 2.8% since 2003, but the equity gender gap remains. At least some progress is being made. [National Law Journal]
* “I thought your papers were terrific, I just disagreed with them.” Kleiner Perkins isn’t a fan of backhanded compliments, so the firm is appealing a judge’s decision to keep Ellen Pao’s case out of arbitration. [Reuters]
* James Holmes, the alleged shooter in the Aurora movie-theater massacre, is scheduled to make his first court appearance today for an initial advisement. Thus far, he’s facing at least 71 charges. [Denver Post]
* The class action suit filed against Cooley Law over its allegedly deceptive employment statistics has been dismissed, much like the NYLS lawsuit before it. More on the dismissal to come later today. [WSJ Law Blog]
* “Sex isn’t going to buy me dinner.” Michael Winner, the attorney accused of offering “pro boner” assistance to female inmates, claims in an interview that the allegations against him are “just plain false.” [WSB-TV Atlanta]
Clean-up efforts are underway at Dewey & LeBoeuf — and we’re not talking about the work of the janitors (at least not the ones who were allegedly stiffed on $300,000). Rather, we’re talking about the work being done by Dewey as debtor, aided by its high-priced advisory team, to put its affairs in order and to maximize the recovery for its creditors.
One of the biggest messes: how to deal with the firm’s hundreds of former partners. Dewey’s lead lawyer, Albert Togut of Togut Segal & Segal, has already made clear his plans to seek some funds from them.
In a conference call yesterday afternoon, Dewey’s bankruptcy advisers informed ex-partners about the contours of a possible global settlement….
If asked to name people who might be worried about owing money to the Dewey estate, some observers might cite “the Steves”: former chairman Steven H. Davis, and former executive director Stephen DiCarmine. Some have accused the Steves of mismanaging D&L’s affairs (or worse), contributing to the collapse of a firm that was once in the top 30 U.S. law firms by total revenue.
But if you’re thinking that Steve DiCarmine wants to pay the Dewey estate some money and get on with his tanning life, think again. As it turns out, Steve DiCarmine is claiming that Dewey owes him money….
The law firm of Dewey & LeBoeuf now finds itself in Chapter 11, but the story of Dewey has not yet reached its end. We’ll now turn the pages in the Bankruptcy Reporter.
Yesterday Judge Martin Glenn of the U.S. Bankruptcy Court allowed Dewey to use cash collateral to fund its wind-down operations, even though this collateral should really be seen as belonging to the firm’s secured creditors. Judge Glenn initially denied this request, at least when it was coupled with giving the secured creditors a lien on recoveries from future litigation. In deciding to let Dewey tap into the cash, Judge Glenn did not decide what the lenders might get in exchange for letting the firm use their money. That will be decided later, at a June 13 hearing.
With things quieting down on the Dewey news front, let’s turn to analysis. Here are some insights into what brought Dewey down and what other firms can learn from its fall, from a former managing partner who now works as a consultant to the legal industry….
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: firstname.lastname@example.org.
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