NEW YORK, May 1 (DPI) — Dewey & LeBoeuf, the Manhattan law firm facing mass defections and about $200 million in debt, will be at the center of the largest bankruptcy filing by an American law firm, according to bankruptcy lawyers and commentators.
According to The Wall Street Journal, the 2,000+ employee and 300-partner firm has about $75 million outstanding on a $100 million bank line of credit, as well as a bond issue with a principal value exceeding $130 million, a portion of which is due next year. A partner in the firm’s restructuring practice issued a statement that the firm had “no plans” to file for bankruptcy. Most observers see some form of bankruptcy as inevitable.
Dozens of partners have already left the firm, and press coverage created a scene of “chaos” in the firm’s offices this week, according to report in The Wall Street Journal Tuesday.
Not surprisingly, online comment boards, particularly that attached to nytimes.com’s Dealbook blog, were rife with unsympathetic jabs about the firm’s implosion. Many were surprisingly personal in nature and apparently knowledgeable about the situation and the firm.
One on highest recommended comments: “It is well known in the legal community that Dewey did this to itself. They’re ruthless, hateful and abusive to employees. They didn’t pay their bills on time. They promised bonuses to their employees and didn’t give them. They are emblematic of all that is wrong with business. Companies can be profitable and honorable–but Dewey cannot. I say good riddance. ” (ck, New York)
“I think this unfortunate downfall was probably inevitable in a time of bigger is better without the better, smarter management that accompany it. Mr. Davis (the former managing partner) wanted it to be bigger, in his own words. His thoughts were probably in the right place but then he got carried away with all those outlandish partner hires and pay guarantees. And the 2008 debacles which he’s not responsible for went against him too. The cliches come true, timing is everything. But he should not have taken all those pay guarantee chances … Mr. Davis can join the ranks of other top executives who have dropped the corporate ball and destroyed jobs in a world where these people need those jobs. (Roberta, NY. 30 Recommendations)
“It would just not be possible to get greater amusement than seeing lawyers screaming about their personal problems with bankruptcy and having overwhelming legal bills. I mean it. Truly.” (lamorpa, Boston)
(WSJ.com comment) “Score one for the little guys.”
Dewey & LeBoeuf was created in 2007 following the merger of two old-line Manhattan firms, Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & MacRae LLP.
(NYtimes.com) “Pretty sad that it took 5 years for a handful of people to run two historic large law firms… into the ground. It says a lot about Davis’ and the partners on the executive committee’s leadership (or lack thereof).” (LALaw, 55 Recommendations)
Some readers expressed disgust with the many mean-spirited posts. Observed one: “Can we just break the comments into two streams going forward? Stream 1 can be for people who actually know something about Big Law. Stream 2 can be for people that think that progressivism = cheering when everyone from Stephen Davis to a second-year attorney with $150K in law school debt to a legal assistant with $80K in undergrad debt loses their job in a recession, because that somehow fixes what’s wrong with Goldman Sachs, or something.
Then I can read comments in Stream 1, and ignore Stream 2. (Mark Bishop, NY)
A former Dewey marketing executive, laid off by one of the predecessor firms in 2007, adds her two cents on Huffington Post:
http://www.huffingtonpost.com/deborah-gaines/dewey–leboeuf_b_1461675.html